Why does the accelerated shift from print to digital billing impact volume-based revenue, and can the impact of weather be isolated? How should this affect expectations for patient payments and Q2 guidance?

Matt Hawkins stated the digital transformation is good for providers, patients, and Waystar, reducing paper and costs while improving patient experience. Steve Oreskovich clarified that while digital conversion impacts top-line revenue on a unit economic basis, it's margin-neutral or accretive. Weather had a Q1 impact but isn't expected to continue. The digital shift and utilization changes are causing Q2 sequential growth to be flat to 1%. “Transparently, that does impact the top line revenue number on a unit economic basis. But when you look at it from a margin dollars or a cash flow, that conversion is neutral.”

Beyond the 40% AI-driven bookings, what areas are driving the remaining 60%? Is increased urgency from providers leading to faster conversion given payer-provider tensions?

Matt Hawkins noted strong momentum across new prospects, cross-sell, and upsell, with high-quality opportunities. The company is seeing more large bookings (multi-solution/platform sales), validating their platform approach. While these larger deals typically take 6-18 months to convert to revenue, internal teams are focused on compressing this time. The largest qualified pipeline in history indicates continued momentum. “But given the larger nature, whether it's new or existing, if these bookings are larger in size, they're still taking 6 to 18 months to show up in our revenue model.”

How long does it take for new AI solutions like the recoupment solution to go broadly across the client base, and are there any changes to the go-to-market strategy for these new, high-value, AI-enabled offerings?

Matt Hawkins explained that new AI-powered solutions like the recoupment SKU are priced to value. The company conducts extensive training for sales and operational teams, runs robust early adopter programs, and uses outbound product marketing to educate clients. The platform approach conditions users to consume AI, and the focus is on ensuring providers can absorb and benefit from the new capabilities. “We go through an extensive amount of training for our teams. So certainly, the product and technology teams are stoked to build these kind of capabilities and to launch them. We do have a robust early adopter program.”

WAY

Waystar (WAY) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Health Care· Apr 29, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Full-year revenue	$1.274 billion to $1.294 billion high materiality	FY26	High
Full-year adjusted EBITDA	$530 million to $540 million high materiality	FY26	High
Full-year normalized organic revenue growth	approximately 10% medium materiality	FY26	High
Q2 sequential revenue growth	flat to 1% medium materiality	Q2 · FY26	High
Q3 sequential revenue growth	1% to 3% medium materiality	Q3 · FY26	High
Net leverage ratio	at or below 3x medium materiality	Ongoing	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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 million	7%	4%	lower-margin

Product announcements

Product	Type	Timeline
AI-powered recruitment solution	launch	—
New recoupment solution	launch	—
Prebill anomaly detection solution	launch	—
Waystar Altitude AI-powered capabilities (Patient Financial Experience)	update	—

Deals & partnerships

Iodine Extends 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

Patient payment volumes pressured Q1 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 statements Q1 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 utilization Q1 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

Patient payment volume trends

Q2 FY26

Current Volume-based revenue up 7% YoY in Q1, impacted by digital conversion and macro factors.

Target Stabilization 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.

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Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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 impacts. 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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.