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    WAY
    Earnings call· Mar 2026(Q1 FY26)

    Waystar Holding Q1 FY26 earnings call WAY

    Apr 29, 2026 Source

    Executive summary

    Waystar Q1 FY26 — Strong AI-Driven Growth Amidst Patient Payment Headwinds

    Waystar delivered a solid Q1 FY26, driven by strong execution, AI-powered solutions, and expanding client relationships, with 40% of new bookings from AI capabilities. While the company reaffirmed its full-year guidance, it noted near-term headwinds in patient payment volumes due to accelerated digital conversion and macro factors, leading to adjusted sequential growth expectations for Q2 and Q3. The company remains focused on its innovation roadmap and leveraging AI to expand its total addressable market.

    Highlights

    5

    • Revenue of $314 million, representing 22% year-over-year growth.

    • Net revenue retention of approximately 111%.

    • Adjusted EBITDA of $135 million, representing an adjusted EBITDA margin of 43%.

    • AI-powered capabilities drove roughly 40% of new bookings in Q1.

    • Added 42 new clients with more than $100,000 in trailing 12-month revenue.

    Concerns

    3

    • Patient payment volumes pressured by macro and weather-related dynamics, impacting volume-based revenue growth to 7% YoY.

    • Accelerated conversion from print to digital patient statements impacted top-line revenue on a unit economic basis.

    • Q2 sequential growth anticipated to be flat to 1%, lower than typical.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year revenue
    $1.274 billion to $1.294 billion
    high materiality
    High
    Full-year adjusted EBITDA
    $530 million to $540 million
    high materiality
    High
    Full-year normalized organic revenue growth
    approximately 10%
    medium materiality
    High
    Q2 sequential revenue growth
    flat to 1%
    medium materiality
    High
    Q3 sequential revenue growth
    1% to 3%
    medium materiality
    High
    Net leverage ratio
    at or below 3x
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Provider Solutions
    Provider solutions, which have higher margins and comprised approximately 75% of revenue organically grew year-over-year at double the rate of lower-margin patient payment solutions. Over the past 6 quarters, that's continued to grow nicely on an organic basis, which we also called out on the slide, anywhere between, on average, 13% to 14% year-over-year.
    Comprised approximately 75% of revenue
    		—double the rate of lower-margin patient payment solutions—higher margins
    Patient Payment Solutions
    Volume-based revenue of $139 million for the first quarter increased 7% year-over-year and 4% sequentially. These headwinds were primarily concentrated in patient payment solutions, which represent approximately 25% of revenue and include a combination of external and client-driven dynamics.
    Comprised approximately 25% of revenue
    		$139 million7%4%lower-margin

    Operational metrics

    25
    Solutions leveraging AI
    50%
    Q1 FY26

    Approximately 50% of our solutions leverage AI.

    Revenue from AI embedded workflows
    40%
    Q1 FY26

    Nearly 40% of revenue is generated by AI embedded workflows.

    New bookings from AI-powered capabilities
    40%
    Q1 FY26

    AI-powered capabilities drove roughly 40% of new bookings in Q1.

    Prebill anomaly detection net revenue per patient discharge
    $3 million
    Estimated

    Our new prebill anomaly detection solution delivers an estimated $3 million in net revenue per 10,000 patient discharges.

    Prebill anomaly detection return on recovered revenue
    5x
    3 years

    and a 5x return in recovered revenue over 3 years.

    Patient financial experience collections increase
    50%
    Expected

    New Waystar Altitude AI-powered capabilities within our patient financial experience are expected to drive a 50% increase in collections.

    Patient out-of-pocket spending
    $556 billion
    Annual

    meaningful in a market where patients account for more than $556 billion in out-of-pocket spending.

    Estimated annual payer recoupments
    $40 billion
    Annual

    Based on our industry remittance data analysis, we estimate payers take back over $40 billion from providers each year through these offsets.

    Recoupment growth rate vs. overall claim volume
    2x
    Current

    recoupments are growing at more than 2x the rate of overall claim volume.

    Recoupment reconciliation time reduction
    80%
    Early results

    Providers are reducing recruitment reconciliation time by over 80%.

    Recoupment solution revenue risk identified
    $32 million
    Early adopter

    1 early adopter health system matched $32 million in revenue risk, work equivalent to approximately 13 full-time employees.

    Organic revenue growth
    11%YoY
    Q1 FY26

    Organic revenue grew 11% year-over-year.

    Subscription revenue
    $172 million
    Q1 FY26

    Subscription revenue of $172 million for the first quarter.

    Subscription revenue growth
    38%YoY
    Q1 FY26

    increased 38% year-over-year, 3% sequentially.

    Subscription revenue as % of total revenue
    55%
    Q1 FY26

    and was 55% of total revenue.

    Organic subscription revenue growth
    14%YoY
    Q1 FY26

    On an organic basis, subscription revenue grew 14% year-over-year.

    Volume-based revenue
    $139 million
    Q1 FY26

    Volume-based revenue of $139 million for the first quarter.

    Volume-based revenue growth
    7%YoY
    Q1 FY26

    increased 7% year-over-year and 4% sequentially.

    Cash, equivalents and short-term investments
    $159 million
    Q1 FY26

    ended the quarter with $159 million in cash, equivalents and short-term investments.

    Gross debt
    $1.5 billion
    Q1 FY26

    and $1.5 billion in gross debt.

    Adjusted EBITDA to unlevered free cash flow conversion
    67%
    Q1 FY26

    and we converted 67% of adjusted EBITDA to unlevered free cash flow.

    Net leverage ratio
    2.7xvs 3x at end of 2025
    Q1 FY26

    As of March 31, net leverage was 2.7x compared to 3x at the end of 2025.

    Hospitals and health systems worked with
    16
    Current

    we work with 16 of the top 20 hospitals and health systems in the United States.

    Total hospitals worked with
    nearly 2,000
    Current

    We work with nearly 2,000 hospitals in some form or another.

    Revenue from hospital and health system segment
    40%
    Current

    about 40% of our revenue today is hospital and health system or acute related.

    Industry KPIs

    7
    MetricValueDetails
    Free cash flow$90 millionUSD
    Adjusted EBITDA$135 millionUSD
    Net revenue retention111%%
    Healthcare client count1,433
    Bookings billings growthdouble-digit count
    Revenue adjusted EBITDA guidanceRevenue: $1.274B-$1.294B; Adjusted EBITDA: $530M-$540MUSD
    Subscription recurring revenue growth$172 millionUSD

    Product announcements

    4
    ProductTypeDetails
    AI-powered recruitment solutionlaunch
    New recoupment solutionlaunch
    Prebill anomaly detection solutionlaunch
    Waystar Altitude AI-powered capabilities (Patient Financial Experience)update

    Deals & partnerships

    1
    IodineExtends Waystar into the mid-cycle where clinical intelligence plays a critical role in preventing denials and ensuring compliant reimbursement. Iodine's AI talent is now fully integrated into Waystar.

    Integration is running ahead of plan and continues to validate the strategic rationale of the acquisition. Iodine extends Waystar into the mid-cycle where clinical intelligence plays a critical role in preventing denials and ensuring compliant reimbursement.

    Risks & headwinds

    3
    Patient payment volumes pressuredQ1 FY26

    Impacted volume-based revenue growth to 7% YoY.

    Mitigation: Maintaining financial discipline while continuing to invest in innovation; digital conversion is margin-neutral/accretive long-term.

    Accelerated conversion from print to digital patient statementsQ1 FY26 and remainder of FY26

    Impacts top-line revenue on a unit economic basis.

    Mitigation: Viewed as an opportunity for digital transformation, leading to long-term margin accretion; Waystar's digital integrated solutions improve transparency and payment adherence.

    Broader macro and weather-related dynamics affecting patient utilizationQ1 FY26

    Contributed to modest offsets in volume trends, primarily in patient payment solutions.

    Mitigation: Weather impact not expected to continue; company maintains strong bookings and sales pipeline.

    What to watch in Q2 FY26

    5

    Patient payment volume trends

    Q2 FY26
    CurrentVolume-based revenue up 7% YoY in Q1, impacted by digital conversion and macro factors.
    TargetStabilization or re-acceleration of volume-based revenue, particularly patient payments.

    Why it matters

    Patient payment solutions represent 25% of revenue and experienced headwinds in Q1, impacting sequential growth expectations for Q2.

    As we moved through the quarter, we saw some modest offsets within our volume trends that were most evident in patient interactions with health care providers and taken together, affected volume-based revenues.

    Q&A highlights

    5

    How does AI, which drives 40% of new bookings, translate into accelerating revenue growth and TAM expansion beyond the current organic growth rate?

    Matt Hawkins explained that AI expands the TAM from a $20 billion software market to potentially automating a significant portion of the $100 billion annual revenue cycle labor services. New AI-powered capabilities like the recoupment SKU and prebill anomaly detection replace manual work, positioning Waystar to pursue this larger opportunity.

    “I believe we've provided a slide or 2 this quarter and in the past is a much larger total addressable market that we're able to go after by deploying AI capabilities that replace manual services.”

    asked by Adam Hotchkiss · answered by Matthew Hawkins

    2 min read6 chapters

    Detailed Narrative

    01

    AI-Powered Market Expansion

    Waystar believes its Agentic AI capabilities are expanding its total addressable market from a $20 billion software market to potentially automating a significant portion of the $100 billion annual revenue cycle labor services. This shift is driven by embedding AI directly into mission-critical workflows like denials, prior authorization, and recoupment, leveraging billions of proprietary data points and deep domain expertise.

    02

    Strong Q1 Performance & Demand Signals

    The company reported strong Q1 results with 22% YoY revenue growth and 111% net revenue retention. Bookings exceeded internal expectations, including a double-digit count of $1 million+ annual value contracts. The sales pipeline is the largest in company history, reflecting multi-year platform commitments and providing visibility into 2027.

    03

    Iodine Acquisition Integration & Cross-Sell

    The integration of Iodine is ahead of schedule, validating the strategic rationale by extending Waystar into mid-cycle clinical intelligence. New research highlights the need for a single AI-powered platform to bridge financial and clinical data, reinforcing Iodine's value. Early cross-sell traction and go-to-market demand are exceeding expectations.

    04

    New AI-Powered Solutions & ROI

    Waystar introduced several new AI-embedded capabilities, including prebill anomaly detection and a new recoupment solution. Early deployments show significant ROI, with prebill anomaly detection delivering an estimated $3 million in net revenue per 10,000 patient discharges and the recoupment solution reducing reconciliation time by over 80% and identifying $32 million in revenue risk for one early adopter.

    05

    Patient Payment Headwinds & Digital Shift

    The company experienced modest offsets in volume-based revenue, primarily in patient payment solutions (25% of total revenue), due to accelerated conversion from print to digital statements, changes in healthcare coverage, and weather impact🌐s. While this impacts top-line revenue on a unit economic basis, the digital shift is viewed as positive for long-term margin accretion and efficiency.

    06

    Platform Strategy & Client Consolidation

    Waystar's platform approach is gaining traction, with clients increasingly seeking unified, regulatory-compliant, and cyber-secure solutions over fragmented point solutions. The company works with 16 of the top 20 hospitals and nearly 2,000 hospitals, with approximately 40% of revenue from the hospital and health system segment, indicating strong momentum in consolidating vendors onto a single platform.

    AI-generated summary of the company’s earnings call. Not investment advice.