Waystar (WAY, Financial) reported a notable performance in the first quarter of 2025, achieving revenue of $256.4 million, outpacing the anticipated $248.47 million. The company maintained strong net income margins above 10% and adjusted EBITDA margins greater than 40%. This marks their fourth consecutive quarter of double-digit revenue growth since going public.
In line with their growth strategy, Waystar introduced a new product, Waystar AltitudeAI, designed to enhance client operations by providing advanced AI capabilities to streamline processes and improve financial results. The company is optimistic about its strategic direction, leading to an upward revision of its full-year revenue and adjusted EBITDA forecasts. CEO Matt Hawkins highlighted the company's solid groundwork and sustainable growth model as key drivers for this positive outlook.
WAY Key Business Developments
Release Date: February 18, 2025
- Q4 Revenue: $244 million, an 18% year-over-year increase.
- Full Year Revenue 2024: $944 million, a 19% year-over-year growth.
- Net Revenue Retention: 110% in Q4.
- Clients Generating >$100,000 Revenue: 1,203 clients, a 15% year-over-year increase.
- Adjusted EBITDA Q4: $100 million, a 16% year-over-year increase.
- Adjusted EBITDA Margin 2024: 40.6%.
- Unlevered Free Cash Flow Q4: $80 million.
- Unlevered Free Cash Flow 2024: $265 million.
- Net Leverage Ratio: Reduced to 2.8 times.
- GAAP Net Income Q4: $19 million.
- GAAP Net Loss 2024: $19 million.
- 2025 Revenue Guidance: $1.0 billion to $1.016 billion.
- 2025 Adjusted EBITDA Guidance: $399 million to $407 million.
- 2025 Non-GAAP Net Income Guidance: $237 million to $243 million.
- 2025 Non-GAAP EPS Guidance: $1.29 to $1.32.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Waystar Holding Corp (WAY, Financial) achieved significant growth in 2024, with a revenue increase of 18% year over year in Q4, reaching $244 million.
- The company completed its IPO in June 2024, raising approximately $1 billion, which strengthened its financial position for continued growth and innovation.
- Waystar's software platform is designed to reduce administrative waste in healthcare, enhancing operational efficiencies and improving payment accuracy and timeliness.
- The company reported strong adjusted EBITDA performance, reaching $100 million in Q4, up 16% year over year, with a full-year margin of 40.6%.
- Waystar launched Waystar Altitude AI, a generative AI capability that accelerates denial recovery, improving efficiency and reimbursement speed for clients.
Negative Points
- Despite strong growth, Waystar's GAAP net income for the full year 2024 was a loss of $19 million, though improved from a loss of $51 million in 2023.
- The company expects a normalized revenue growth rate of 10% in 2025, which is lower than the 19% growth reported in 2024 due to timing benefits recognized in 2024.
- Waystar's guidance for 2025 includes a lower adjusted EBITDA margin of 40%, indicating potential challenges in maintaining profitability while investing in growth.
- The company faces ongoing challenges in expanding direct connectivity with payers, which is crucial for enhancing its network and service offerings.
- Waystar's growth strategy heavily relies on cross-selling and upselling to existing clients, which may face limitations if market conditions change or client needs shift.
