Waystar Holding Corp.

1. Business

Waystar Holding Corp. (“Waystar”, “we”, “us” or “our”) is a provider of mission-critical cloud technology to healthcare organizations. Our enterprise-grade platform transforms the complex and disparate processes comprising healthcare payments received by healthcare providers from payers and patients, from pre-service engagement through post-service remittance and reconciliation. Our platform enhances data integrity, eliminates manual tasks, and improves claim and billing accuracy, which results in better transparency, reduced labor costs, and faster, more accurate reimbursement and cash flow. The market for our solutions extends throughout the United States and includes Puerto Rico and other U.S. Territories.

Risks and Uncertainties— We are subject to risks common to companies in similar industries, including, but not limited to, our operation in a highly competitive industry, our ability to retain our existing clients and attract new clients, our ability to establish and maintain strategic relationships, the growth and success of our clients and overall healthcare transaction volumes, consolidation in the healthcare industry, our selling cycle of variable length to secure new client agreements, our implementation cycle that is dependent on our clients’ timing and resources, our ability to develop and market new solutions, or enhance our existing solutions, to respond to technological changes or evolving industry standards, the interoperability, connectivity, and integration of our solutions with our clients’ and their vendors’ networks and infrastructures, the performance and reliability of internet, mobile, and other infrastructure, the consequences if we cannot obtain, process, use, disclose, or distribute the highly regulated data we require to provide our solutions, impact of government regulations on our market, and our reliance on certain third-party vendors and providers.

On occasion, we enter into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, we indemnify, hold harmless, and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent, or other intellectual property infringement claim by any third-party with respect to its technology. The terms of these indemnification agreements are generally perpetual any time after the execution of the agreement. The maximum potential future payments we could be required to make under these agreements is not determinable because it involves claims that may be made against us in the future but have not yet been made. Historically, we have not incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

We have entered into agreements with our directors or officers that may require us to indemnify them against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from their willful misconduct.

No liability associated with such indemnifications was recorded as of September 30, 2025 and December 31, 2024.

2. Summary of Significant Accounting Policies

Basis of Financial Statement Presentation

The financial statements include the consolidated balance sheets, statements of operations, statements of comprehensive income (loss), statements of changes in stockholders’ equity, and statements of cash flows of Waystar and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s financial position, results of operations, changes in stockholders’ equity and cash flows. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results for the full year or the results for any future periods. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2024 in the 2024 Annual Report of Form 10-K filed with the SEC on February 18, 2025 (the “2024 Annual Report”).

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but are not limited to: (1) revenue recognition, including estimated expected customer life; (2) recoverability of accounts receivable and taxes receivable; (3) impairment assessment of goodwill and long-lived intangible assets; (4) fair value of intangibles acquired in business combinations; (5) litigation reserves; (6) depreciation and amortization; (7) fair value of stock options issued to employees and assumed as part of business combinations; (8) fair value of interest rate swaps; and (9) leases, including incremental borrowing rate. Future events and their effects cannot be predicted with certainty, and accordingly, accounting estimates require the exercise of judgment. We evaluate and update assumptions and estimates on an ongoing basis and may employ outside experts to assist in evaluations. Actual results could differ from the estimates used.

Revenue Recognition

We derive revenue primarily from providing access to our solutions for use in the healthcare industry and in doing so generate two types of revenue: (i) subscription revenue and (ii) volume-based revenue, which account for 99% of total revenue for all periods presented. We also derive revenue from implementation fees for our software, as well as hardware sales to facilitate patient payments.

We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), through the following five steps:

•identification of the contract, or contracts, with a client;

•identification of the performance obligations in the contract;

•determination of the transaction price;

•allocation of the transaction price to the performance obligations in the contract; and

•recognition of revenue when, or as, we satisfy a performance obligation

Our customers, referred to as clients elsewhere in this report, represent healthcare providers across all types of care settings, including physician practices, clinics, surgical centers, and laboratories, as well as large hospitals and health systems.

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The length of our contracts vary but are typicallytwo tothree years and generally renew automatically for successiveone-year terms. Our revenue is reported net of applicable sales and use tax and is recognized as, or when, control of these services or products are transferred to clients, in an amount that reflects the consideration we expect to be entitled to in exchange for the contract’s performance obligations.

Revenue from our subscription services as well as from our volume-based services represents a single promise to provide continuous access (i.e., a stand-ready obligation) to our software solutions in the form of a service. Our software products are made available to our clients via a cloud-based, hosted platform where our clients do not have the right or practical ability to take possession of the software. As each day of providing access to the software solutions is substantially the same and the client simultaneously receives and consumes the benefits as services are provided, these services are viewed as a single performance obligation composed of a series of distinct daily services.

Revenue from our subscription services is recognized over time on a ratable basis over the contract term beginning on the date that the service is made available to the client. Volume-based services are priced based on transaction, dollar volume or provider count in a given period. Given the nature of the promise is based on unknown quantities or outcomes of services to be performed over the contract term, the volume-based fee is determined to be variable consideration. The volume-based transaction fees are recognized each day using a time- elapsed output method based on the volume or transaction count at the time the clients’ transactions are processed.

Our other services are generally related to implementation activities across all solutions and hardware sales to facilitate patient payments. Implementation services are not considered performance obligations as they do not provide a distinct service to clients without the use of our software solutions. As such, implementation fees related to our solutions are billed upfront and recognized ratably over the customer's life. Implementation fees and hardware sales represent less than 1% of total revenue for all periods presented.

Our contracts with clients typically include various combinations of our software solutions. Determining whether such software solutions are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment. Specifically, judgment is required to determine whether access to the Company’s SaaS solutions is distinct from other services and solutions included in an arrangement.

We follow the requirements of ASC 606-10-55-36 through -40, Revenue from Contracts with Customers, Principal Agent Considerations, in determining the gross versus net revenue presentations for our performance obligations in the contract with a client. Revenue recorded where we act in the capacity of a principal is reported on a gross basis equal to the full amount of consideration to which we expect in exchange for the good or service transferred. Revenue recorded where we act in the capacity of an agent is reported on a net basis, exclusive of any consideration provided to the principal party in the transaction.

The principal versus agent evaluation is a matter of judgment that depends on the facts and circumstances of the arrangement and is dependent on whether we control the good or service before it is transferred to the client or whether we are acting as an agent of a third party. This evaluation is performed separately for each performance obligation identified. For the majority of our contracts, we are considered the principal in the transaction with the client and recognize revenue gross of any related channel partner fees or costs. We have certain agency arrangements where third parties control the goods or services provided to a client and we recognize revenue net of any fees owed to these third parties.

Payment terms and conditions vary by contract type, although our standard payment terms generally require payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of payment, we have determined our contracts do not generally include a significant financing component. The primary purpose of our invoicing terms is to provide clients with simplified and predictable ways of purchasing our products and services, not to receive financing from our clients or to provide clients with financing.

Contract Costs

Incremental Costs of Obtaining a Contract

Incremental costs of obtaining a contract primarily include commissions paid to our internal sales personnel. We consider all such commissions to be both incremental and recoverable since they are only paid when a contract is secured. These capitalized costs are amortized on a straight-line basis over the expected period of benefit, which is determined based on the average customer life, which includes anticipated renewals of contracts. As of September 30, 2025 and December 31, 2024, the total unamortized costs reported as deferred costs on our balance sheet amounted to $30.8 million and $29.0 million, respectively, for internal sales commissions. For the three months ended September 30, 2025 and 2024, amortization related to the sales commission asset was $3.3 million and $2.8 million, respectively. For the nine months ended September 30, 2025 and 2024, amortization related to the sales commission asset was $9.6 million and $7.8 million, respectively. The aforementioned amortization amounts are included in sales and marketing in our consolidated statements of operations.

Costs to Fulfill a Contract

We capitalize costs incurred to fulfill contracts that i) relate directly to the contract, ii) are expected to generate resources that will be used to satisfy performance obligations under the contract, and iii) are expected to be recovered through revenue generated under the contract. Costs incurred to implement clients on our solutions (e.g., direct labor) are capitalized and amortized on a straight-line basis over the estimated customer life if we expect to recover those costs. As of September 30, 2025 and December 31, 2024, the total unamortized costs reported as deferred costs on our balance sheet amounted to $59.3 million and $53.8 million, respectively, for fulfillment costs. For the three months ended September 30, 2025 and 2024, amortization related to the fulfillment cost asset was $4.2 million and $3.2 million, respectively. For the nine months ended September 30, 2025 and 2024, amortization related to the fulfillment cost asset was $11.8 million and

$8.9 million, respectively. The aforementioned amortization amounts are included in the costs of revenue in our consolidated statements of operations.

There wereno impairment losses relating to deferred costs during the periods presented.

Channel Partners

We account for fees paid to channel partners within sales and marketing expenses in the accompanying statements of operations. For the three months ended September 30, 2025 and 2024, we recorded fees to all channel partners of $19.8 million and $17.0 million, respectively. For the nine months ended September 30, 2025 and 2024, we recorded fees to all channel partners of $57.1 million and $47.6 million, respectively. As we are primarily responsible for contracting with and fulfilling contracts for the end user, we record revenue gross of related channel partner fees.

Cash and cash equivalents

We consider highly liquid investments with an original maturity of three months or less to be cash equivalents. We maintain our cash in bank deposit accounts, which, at times, may exceed federally insured limits. We have not experienced any credit losses in such accounts.

Investment securities

Our short-term investments, which consist of debt securities, are stated at fair value. These debt securities have been categorized as available-for-sale and classified as current assets given their maturity date is twelve months or less. Unrealized holding gains and losses for debt securities, net of applicable deferred taxes, are included in other comprehensive income or loss as a component of stockholders’ equity until realized from a sale or an expected credit loss is recognized. For the purpose of determining realized gross gains and losses for debt securities sold, that are included as a component of interest income/(expense) in the consolidated statements of income, the cost of investment securities sold is based upon specific identification. We recorded $1.4 million and $2.0 million of interest income on investment securities for the three and nine months ended September 30, 2025, within “Other expense” of our statements of operations. For the period ended September 30, 2025 we had purchases of short-term investments of $206.4 million that were liquidated in the same period to help fund the acquisition of Iodine Software Holdings, Inc. (“Iodine”). No material gain or loss was recognized in the sale of these short-term investments.

Under the current expected credit losses model expected losses on available for sale debt securities are recognized through an allowance for credit losses rather than as reductions in the amortized cost of securities. For debt securities whose fair value is less than their amortized cost which we do not intend to sell or are not required to sell, we evaluate the expected cash flows to be received as compared to amortized cost and determine if an expected credit loss has occurred. In the event of any expected credit loss, only the amount of impairment associated with the expected credit loss is recognized in income with the remainder, if any, of the loss recognized in other comprehensive income. To the extent we have the intent to sell the debt security, or it is more likely than not we will be required to sell the debt security before recovery of our amortized cost basis, we recognize an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value.

There were no impairment losses relating to our investment securities during the periods presented.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Improvements to Income Tax Disclosures”, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. For public business entities, the ASU will be effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. We are currently evaluating the effect of the adoption of this amendment on our consolidated and condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-13, “Expense Disaggregation Disclosures.” The standard is intended to benefit investors by providing more detailed information about expenses that is critically important in understanding an entity’s performance, assessing an entity’s prospects for future cash flows, and comparing an entity’s performance over time and with that of other entities. For public business entities, this ASU will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this Update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the effect of the adoption of this amendment on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Targeted Improvements to the Accounting for Internal-Use Software” to modernize the accounting guidance for the costs to develop software for internal use. The new guidance amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. The new guidance will be effective for all entities for annual periods beginning after December 15, 2027. The guidance can be applied on a fully prospective basis, a modified basis for in-process projects, or a full retrospective basis. We are currently evaluating the effect of the adoption of this amendment on our consolidated financial statements.

3. Revenue Recognition

Disaggregation of Revenue

The following table presents revenues disaggregated by revenue type and the timing of revenue recognition (in thousands):

Contract Liabilities

We derive our revenue from contracts with clients primarily through subscription fees and volume-based fees. Our payment terms with the client generally comprise an initial payment for implementation services, which includes client enrollment and the setup of contracted solutions on our platform. These implementation fees are due upon contract execution. Additionally, subscription fees are earned on an ongoing basis, which are invoiced monthly.

Client payments received in advance of fulfilling the corresponding performance obligations are recorded as contract liabilities. Implementation fees are recognized over the customer life, with any unrecognized amounts deferred as contract liabilities. These amounts are reported as deferred revenue on our consolidated balance sheet.

Revenue recognized from amounts included in deferred revenue as of the beginning of the period was $0.8 million and $0.7 million for the three months ended September 30, 2025 and 2024, respectively. Revenue recognized from the amounts included in deferred revenue as of the beginning of the period was $9.1 million and $10.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Transaction Price Allocated to Remaining Performance Obligations

At September 30, 2025, the transaction price related to unsatisfied performance obligations that are expected to be recognized for the next 12 months and greater than 12 months was $60.4 million and $15.0 million, respectively.

The transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts does not include revenue related to performance obligations that are part of a contract with an original expected duration of one year or less.

Additionally, the balance does not include variable consideration that is allocated entirely to wholly unsatisfied promises that form part of a single performance obligation composed of a series of distinct daily services.

Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations and changes in the timing and scope of contracts, arising from contract modifications.

4. Segments

Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. We haveone business activity and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the consolidated unit level. The geographical location of our customers has no impact on strategy or products offered. The “chief operating decision maker,” or CODM, assesses performance and allocates resources using a consolidated profitability metric as discussed below. Accordingly, we have determined that we operate in a single reportable operating segment.

Our CODM is our Chief Executive Officer. On a monthly basis, our CODM reviews the following financial information presented on a consolidated basis. The key profitability metric used for purposes of making key personnel staffing decisions, approving operating budgets and forecasts, and making strategy decisions is Net Income as detailed below. See Note 3 for our disaggregated revenue by type.

5. Fair Value Measurements and Disclosures

The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis (in thousands):

The fair values of our interest rate swaps are based on the sum of all future net present value cash flows. The future cash flows are derived based on the terms of our interest rate swaps, as well as considering published discount factors, and projected SOFR curve. The fair value of long-term debt was determined using the present value of future cash flows based on the borrowing rates currently available for debt with similar terms and maturities. The carrying value of our first lien term loan facility was $1,154.8 million and $1,163.5 million compared to a fair value of $1,151.9 million and $1,169.4 million at September 30, 2025 and December 31, 2024, respectively. There wereno transfers in or out of Level 3 during the periods presented.

As of September 30, 2025 and December 31, 2024, the carrying value of cash equivalents, accounts receivable, accounts payable, accrued liabilities, and other current assets and liabilities approximates fair value due to the short maturities of these instruments. Interest rate swaps are Level 2 instruments whose fair value is derived from discounted cash flows adjusted for nonperformance risk. Investment securities are Level 2 instruments whose fair value is observed through market data of similar securities. Money market funds are Level 1 instruments whose fair value is observed through daily quoted prices of similar assets. Money market funds are considered cash equivalents because they have a maturity of less than three months and are highly liquid.

6. Property and Equipment, Net

The balances of the major classes of property and equipment are as follows (in thousands):

Depreciation of fixed assets, including the amortization of capitalized software, for the three months ended September 30, 2025 and 2024 was $5.4 million and $21.1 million, respectively. Depreciation of fixed assets, including the amortization of capitalized software, for the nine months ended September 30, 2025 and 2024 was $16.0 million and $31.4 million, respectively.

We capitalized $4.6 million and $13.5 million in software development costs for the three and nine months ended September 30, 2025, respectively. We capitalized $4.3 million and $12.1 million in software developments costs for the three and nine months ended September 30, 2024, respectively. Amortization of capitalized software was $3.6 million and $2.7 million for the three months ended September 30, 2025 and 2024, respectively, and was $10.3 million and $7.4 million for the nine months ended September 30, 2025 and 2024, respectively. The net book value of capitalized software development costs was $32.8 million and $29.6 million as of September 30, 2025 and December 31, 2024, respectively.

There wereno impairments of property and equipment for the three and nine months ended September 30, 2025 and 2024, respectively.

7. Goodwill and Other Intangible Assets

Goodwill has a balance of $3,020.0 million as of both September 30, 2025 and December 31, 2024. There wereno additions, disposals or impairments to goodwill during the three and nine months ended September 30, 2025 and 2024.

Amortization for definite-lived intangible assets is as follows (in thousands, except useful life):

Amortization expense was $27.9 million and $39.1 million for the three months ended September 30, 2025 and 2024, respectively and was $84.1 million and $117.2 million for the nine months ended September 30, 2025 and 2024, respectively. During the three and nine months ended September 30, 2025, gross carrying amount of definite-lived intangible assets decreased by $38.1 million due to disposals of fully amortized assets.

8. Leases

The following table presents components of lease expense for the three and nine months ended September 30, 2025 and 2024, respectively (in thousands):

Maturities of lease liabilities as of September 30, 2025 are as follows (in thousands):

Supplemental cash flow information related to leases for the three and nine months ended September 30, 2025 and 2024 are as follows (in thousands):

Supplemental balance sheet information related to leases as of September 30, 2025 and December 31, 2024 are as follows:

9. Income Taxes

We recognized income tax expense of $12.1 million and income tax benefit of $3.3 million for the three months ended September 30, 2025 and 2024, respectively, based on the quarter-to-date pre-tax income. We recognized income tax expense of $43.5 million and income tax benefit of $17.4 million for the nine months ended September 30, 2025 and 2024, respectively, based on the year-to-date pre-tax income. The Company’s effective income tax rate was 28.3% and 37.7% for the three months ended September 30, 2025 and 2024, respectively. The Company’s effective income tax rate was 32.1% and 31.3% for the nine months ended September 30, 2025 and 2024, respectively. Differences in the effective tax rate and statutory federal income tax rate of 21% are primarily driven by the impact of certain limitations on the deductibility of stock-based compensation recognized for financial reporting purposes as well as state income taxes and research and development credits claimed.

On July 4, 2025, H.R.1, the budget reconciliation bill known as the “One Big Beautiful Bill Act”, was signed into law in the U.S. This legislation includes significant changes to U.S. tax law impacting corporate tax rates, bonus depreciation, interest limitations under Internal Revenue Code Section 163(j), and the treatment of domestic research and development expenditures. Following the enactment of the OBBBA, the Company recognized the tax effects of the legislation in the interim period that included the enactment date, as required under ASC 740. The Company has evaluated the impact of the OBBBA on deferred tax assets and liabilities, including adjustments to valuation allowances, and has reflected these effects in the consolidated financial statements for the three and nine months ended September 30, 2025. The impacts of adopting the tax law change did not materially impact the net income tax expense or deferred tax balances.

10. Accounts Receivable Securitization

As of September 30, 2025 and December 31, 2024, we had $80.0 million and $80.0 million, respectively, outstanding under a receivables financing agreement with a counterparty as the lender, which provides for athree-year receivables facility with a limit of $80.0 million (the “Receivables Facility”). Pursuant to the Receivables Facility, we sell and/or contribute current and future receivables to Waystar RC, LLC as the Special Purpose Entity (“SPE”). The SPE, in turn, pledges its interests in the receivables to the counterparty, which either makes loans or issues letters of credit on behalf of the SPE. All receivables remain on our balance sheet as they continue to be the property of our consolidated entities under the securitization.

The interest rate under the Receivables Facility is 1.61% per annum above the SOFR rate with a minimum base of 0%. The SOFR is adjusted each thirty-day period to the thirty-day SOFR rate. Interest under the Receivables Facility is paid monthly in arrears. At September 30, 2025, the effective interest rate for the Receivables Facility is 5.74%.

All principal under the Receivables Facility is due on October 31, 2026.

The Receivables Facility contains certain covenants which, among other things, require we maintain certain collection thresholds with respect to our accounts receivable. We were in compliance with all such debt covenants during the periods presented.

11. Debt

Debt instruments consist primarily of term notes, revolving lines of credit, and a Receivables Facility as follows (in thousands):

The maturity of long-term principal payments (excluding debt discount) at September 30, 2025 is as follows (in thousands):

As of September 30, 2025 and December 31, 2024, there isno outstanding balance on our revolving credit facility. The interest rate under the revolving credit facility is 1.75% per annum above the SOFR rate with a minimum base of 0.00%. The SOFR is adjusted each thirty-day period to the thirty-day SOFR rate. At September 30, 2025, the effective interest rate for the revolving credit facility is 5.88%.

On August 12, 2025, we executed the eleventh amendment on the First Lien Credit Agreement whereby the outstanding balance was repriced being an interest rate of 2.00% per annum above the SOFR rate with a minimum base of 0.00% ("August 2025 First Lien Repricing"). There was no change in the outstanding loan balance before repricing and after repricing and the maturity date was not impacted by the amendment. As part of the August 2025 First Lien Repricing, we recorded $0.7 million in third-party fees that were expensed immediately, which were recorded in general and administrative expenses in our consolidated statements of operations. We recorded a loss on extinguishment of $0.7 million for the three and nine months ended September 30, 2025 related to the August 2025 First Lien Repricing. The SOFR is adjusted each thirty-day period to the thirty-day SOFR rate. Interest under the First Lien Credit Facility is paid monthly in arrears. At September 30, 2025, the effective interest rate for First Lien Credit Facility is 6.34%.

Principal on the First Lien Credit Facility is payable in 20 equal quarterly installments with the remaining balance to be paid on October 22, 2029. As of September 30, 2025, there are 16 payments remaining. The First Lien Credit Agreement contains certain covenants which, among other things, restrict our ability to incur additional indebtedness. We were in compliance with such debt covenants as of September 30, 2025.

We had unamortized debt issuance costs of $8.9 million and $11.3 million as of September 30, 2025 and December 31, 2024, respectively.

In connection with the Revolving Credit Facility, unamortized debt issuance costs were $1.6 million and $2.1 million as of September 30, 2025 and December 31, 2024, respectively.

12. Derivative Financial Instruments

To mitigate the risk of a rise in interest rates on the First Lien Credit Facility, we entered into interest rate swaps on January 13, 2023, April 1, 2025 and April 9, 2025. We attempt to minimize our interest risk exposure by fixing our rate through the utilization of interest rate swaps, which are derivative instruments. The interest rate swaps mitigate the exposure on the variable component of interest on our First Lien Credit Facility. The interest rate swaps result in the fixed interest rate shown in the table below on the swapped portion of the First Lien Credit Facility. Our swaps are entered into with financial institutions that participate in the First Lien Credit Facility. By using a derivative instrument to hedge exposures to changes in interest rates, we expose ourselves to credit risk due to the possible failure of the counterparty to perform under the terms of the derivative contract.

As of September 30, 2025 and December 31, 2024, we have the following interest rate swap agreements designated as a hedging instruments:

The gain or loss on the swaps is recognized in accumulated other comprehensive income/(loss) and reclassified into earnings as adjustments to interest expense in the same period or periods during which the swaps affect earnings. Gains or losses on the swaps representing hedge components excluded from the assessment of effectiveness are recognized in current earnings.

The effect of derivative instruments designated as hedging instruments on the accompanying consolidated financial statements is as follows (in thousands):

The net amount of accumulated other comprehensive income expected to be reclassified to interest income in the next twelve months is $0.1 million.

13. Related Party Transactions

At September 30, 2025 and December 31, 2024, we had $56.4 million and $35.6 million, respectively, of outstanding debt as part of the First Lien Credit Facility from Bain Affiliated Funds and CPPIB Credit Investments III Inc., affiliates of Bain Capital LP and Canada Pension Plan Investment Board (“Affiliated Debtholders”). Interest expense associated with and paid to Affiliated Debtholders was $0.9 million and $0.7 million for the three months ended September 30, 2025 and 2024, respectively and $2.5 million and $3.4 million for the nine months ended September 30, 2025 and 2024, respectively.

CPPIB has an ownership interest in us and a significant interest in the landlord that leases us office space under an operating lease agreement in Houston, Texas. For the three months ended September 30, 2025 and 2024, we expensed zero and $0.1 million, respectively, and for the nine months ended September 30, 2025 and 2024, we expensed zero and $0.2 million, respectively, for this office space lease in general and administrative expense.

Bain Capital LP has an ownership interest in us and a significant interest in some clients for whom we provide software solutions. For the three months ended September 30, 2025 and 2024, we earned revenue of $0.8 million from five clients and $0.4 million from four clients, respectively. For the nine months ended September 30, 2025 and 2024, we earned revenue of $1.9 million from five clients and $1.2 million from four clients, respectively. They also have an ownership interest in us and a significant interest intwo vendors that provide us with software solutions. For the three months ended September 30, 2025 and 2024, we expensed $0.6 million and $0.1 million, respectively, and for the nine months ended September 30, 2025 and 2024, we expensed $1.8 million and $0.3 million for software services from these vendors in cost of revenue expense.

14. Common and Preferred Stock

In connection with our initial public offering ("IPO"), the Company’s amended and restated certificate of incorporation became effective on June 10, 2024, which authorizes the issuance of 2,500,000,000 shares of common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share. The shares of preferred stock have rights and preferences, including voting rights, designated from time to time by the Board of Directors. In connection with the amendment and restatement of the Company’s certificate of incorporation effective on the IPO date, the Class A common stock shares were automatically reclassified as, and became, one share of common stock. There were 174,667,840 and 172,108,240 common stock shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively.

15. Retirement Plans

We maintain qualified 401(k) plans which cover substantially all employees meeting certain eligibility requirements. Participants may contribute a portion of their compensation to the plans, up to the maximum amount permitted under Section 401(k) of the Internal Revenue Code. Under these plans, we contribute various percentages of employees’ salaries to the plans. Total expenses included in operating expenses in the accompanying consolidated statement of operations related to the plans were $1.3 million and $1.1 million for the three months ended September 30, 2025 and 2024 and $3.9 million and $3.6 million for the nine months ended September 30, 2025 and 2024, respectively.

16. Stock-based Compensation

Equity incentive plans

On October 22, 2019, the Board of Directors approved the Waystar Holding Corp. 2019 Stock Incentive Plan (“2019 Waystar Holding Plan”). Under this plan, we can issue up to 9.9 million options or other equity awards. The granted awards contain service criteria, performance criteria, market conditions, or a combination thereof for vesting and have a 10-year contractual term. Options with a service condition generally vest over 5 years with 20% vesting in equal vesting installments. Options with a performance condition and a market condition vest based upon a change in control, initial public offering, or a sponsor distribution or deemed return if the investors have achieved specified levels of return on investment. In addition, as part of a change in control in 2019,2.2 million fully vested rollover options remain outstanding.

The Board of Directors approved the Waystar Holding Corp. 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”), effective as of June 6, 2024, the date of pricing of our IPO. Under this plan, we can issue non-qualified stock options, incentive stock options, stock appreciation rights, restricted shares of the Company’s Common Stock, restricted stock units, performance based stock units, and other equity-based awards tied to the value of the Company’s shares. Under this plan, we can issue up to 10 million options and other equity awards, subject to annual increases as outlined under the plan. The number of shares available to be issued automatically increases on the first day of each fiscal year beginning in 2025 by a number of shares equal to the lesser of the positive difference, if any, between 5% of the outstanding common stock on the last day of the immediately preceding fiscal year, minus the plan share reserve on the last day of the immediately preceding fiscal year or such lesser number of shares as may be determined by the Board of Directors. Options with a service condition generally vest over 5 years with 20% vesting in equal vesting installments. The restricted stock units (“RSUs”) under the 2024 Equity Incentive Plan generally vest over 4 or 5 years with 25% or 20% vesting, respectively, in equal vesting installments. The performance-based stock units (“PSUs”) under the 2024 Equity Incentive Plan vest between 0% and 200% based on the company's total shareholder return (“TSR”) relative to a designated peer group as defined in the respective agreement over afour-year performance period. As of September 30, 2025,5.4 million shares were available for future grants under this plan.

The Board of Directors approved the Waystar Holding Corp. 2024 Employee Stock Purchase Plan (the “ESPP”), effective as of June 6, 2024, the date of pricing of our IPO. A total of 3,250,000 shares of common stock are initially reserved for the ESPP. The number of shares available to be issued for the ESPP will automatically increase each fiscal year beginning in 2025 by a number of shares equal to the lesser of the positive difference, if any, between 1% of the outstanding common stock on the last day of the immediately preceding fiscal year and the number of shares of common stock available for the issuance of shares pursuant to the plan on the last day of the immediately preceding fiscal year or such lesser number of shares as may be determined by the Board of Directors. The number of shares available to be issued for the ESPP will not exceed 27,000,000 as outlined in the plan agreement. Our employees contribute funds via payroll deductions during the offering periods, which are used to buy Waystar common shares at a discount of up to 15% of the purchase price at the purchase date. Offerings to purchase shares are granted twice annually on or about June 30 and December 31. During the three and nine months ended September 30, 2025,37,323 of common shares have been issued as part of the ESPP. For the three and nine months ended September 30, 2025, expense of $0.1 million and $0.4 million, respectively, has been recorded which represents the 15% discount given to the employees under the ESPP. During the three and nine months ended September 30, 2024, zero expense was recorded related to the 15% discount given to the employees under the ESPP.

Stock Options

We utilize the Black-Scholes option pricing model to estimate the fair value of the service condition options under all plans and the Monte Carlo pricing model to estimate the fair value of the performance condition options under the 2019 Waystar Holding Corp. Plan. We value both types of options at the grant date using the following assumptions:

•Risk-free interest rate—reflects the average rate on the United States Treasury bond with maturity equal to the expected term of the option;

•Expected dividend yield—as we do not currently pay dividends or expect to pay dividends in the near future, the expected dividend yield iszero;

•Expected term of stock award – under the 2024 Equity Incentive Plan, we utilized the simplified method due to the lack of historical experience activity for Waystar. The simplified method calculates the expected term as the mid-point between the vesting date and the contractual expiration date of the award. Under the 2019 Waystar Holding Corp. Plan, it is based on historical experience that is modified based on expected future changes;

•Expected volatility in stock price—reflects the historical volatility of comparable public companies over the expected term of the stock option.

The weighted average grant date fair value of options granted during the nine months ended September 30, 2025 was $18.69 per share. No options were granted during the three months ended September 30, 2025. The weighted average grant date fair value of options granted during the nine months ended September 30, 2024 was $12.89 per share. No options were granted during the three months ended September 30, 2024. As of September 30, 2025, we had 6.8 million fully vested options with a weighted average exercise price of $15.03 per share, an aggregate intrinsic value of $156.3 million and an average remaining contractual term of 4.2 years. The total fair value of options vested for the three months ended September 30, 2025 and 2024 were $2.9 million and $2.9 million, respectively and $16.5 million and $4.8 million for the nine months ended September 30, 2025 and 2024, respectively.

Information pertaining to option activity under all plans (including rollover options) during the nine months ended September 30, 2025 and 2024 is as follows:

The following is a summary of the significant assumptions used in estimating the fair value of options granted the three and nine months ended September 30, 2025 and 2024:

The aggregate intrinsic value of options exercised (the difference between the fair market value of our stock on the date of exercise and the exercise price) was approximately $12.8 million and $6.7 million for the three months ended September 30, 2025 and 2024, respectively and $61.7 million and $6.7 million for the nine months ended September 30, 2025 and 2024, respectively.

We expect to incur compensation expense of approximately $41.0 million over a weighted average of 3.4 years for all unvested time-based awards outstanding on September 30, 2025.

RSUs

The RSUs granted on June 10, 2024 in conjunction with the IPO were valued at the IPO price. Subsequent RSU grants have been valued using our common stock price as of the grant date based on the publicly traded value per NASDAQ, and are expensed on a straight-line basis over the applicable vesting period. All vesting is contingent on continued service.

The following table summarizes RSU activity during the nine months ended September 30, 2025 and 2024.

We expect to incur compensation expense of $110.8 million over a weighted average of 4.5 years for all unvested RSUs outstanding on September 30, 2025.

PSUs

We utilize the Monte Carlo pricing model to estimate the fair value of the market-based condition PSUs at the grant date under the 2024 Equity Incentive Plan. The Monte Carlo model incorporates assumptions regarding expected volatility, correlation between performance of our stock price and that of publicly traded peer companies, expected dividend yields and the risk-free interest rate. The Monte Carlo pricing model simulates potential future stock price paths yielding a grant date fair value that reflects the likelihood of varying outcomes. These awards are expensed on a straight-line basis over the applicable vesting period utilizing the fair value at the grant date.

The following is a summary of the significant assumptions used in estimating the fair value of PSUs granted during the nine months ended September 30, 2025. There wereno PSUs granted during the three months ended September 30, 2025 or during the three and nine months ended September 30, 2024.

The following table summarizes PSU activity during the nine months ended September 30, 2025.

We expect to incur compensation expense of $21.4 million over a weighted average of 3.5 years for all unvested PSUs outstanding on September 30, 2025.

Stock-based Compensation

We recorded $11.6 million and $7.9 million of stock-based compensation expense for the three months ended September 30, 2025 and 2024, respectively and $29.9 million and $47.4 million for the nine months ended September 30, 2025 and 2024, respectively.

Stock-based compensation expense was recorded in the following cost and expense categories in the consolidated statements of operations:

17. Other Accrued Expenses

Other accrued expenses consist of the following (in thousands):

18. Income/(Loss) Per Share

A reconciliation of the numerators and the denominators of the basic and diluted per share computations are as follows (in thousands, except for share and per share data):

Because of their anti-dilutive effect,1,652,397 and 5,247,024 common share equivalents comprised of stock options and RSUs have been excluded from the diluted earnings per share calculation for the three months ended September 30, 2025 and 2024, respectively. Additionally because of their anti-dilutive effect,1,305,855 and 12,148,217 common share equivalents comprised of stock options and RSUs have been excluded from diluted earnings per share calculation for the nine months ended September 30, 2025 and 2024, respectively.

19. Commitments and Contingencies

We may be subject to legal proceedings, claims, asserted or unasserted, and litigation arising in the ordinary course of business. We do not, however, currently expect that the ultimate costs to resolve any pending matter will have a material effect on our consolidated financial position, results of operations, or cash flows.

20. Subsequent Events

We have evaluated subsequent events through the date of issuance.

On October 1, 2025, the Company completed the acquisition of Iodine pursuant to the Agreement and Plan of Merger (the "Merger Agreement") entered into on July 23, 2025 for total cash consideration of approximately $458.6 million and 16,639,920 shares of common stock having a value of $37.31 per share as outlined in the Merger Agreement. Due to the timing of the acquisition, the accounting conclusions related to the transaction have not yet been finalized.

On October 1, 2025, we entered into the Twelfth Amendment to the First Lien Credit Agreement to increase our First Lien Credit Facility by $250.0 million, increase the maximum borrowing capacity under the revolving credit facility from $400.0 million to $500.0 million, and decrease the interest rate under the revolving credit facility from 1.75% per annum above SOFR to 1.50% per annum above SOFR. We drew $30.0 million on the revolving credit facility to help fund the Iodine acquisition.

On October 28, 2025, we reached a settlement agreement to terminate the prior lease onone of our office locations that was relocated in the third quarter of 2024. The total settlement was $15.0 million. Due to the timing of the settlement, the accounting conclusions related to the transaction have not yet been finalized.