Waystar Holding Corp

Waystar is a leading cloud-based revenue cycle management platform that supports over 30,000 health care organizations, including 16 of the top 20 US hospitals. However, slower-than-expected demand for certain volume-based solutions reduced our confidence in the company’s profit cycle. We identified more compelling software investment opportunities that had moved back into our preferred market capitalization range, leading us to end our investment in Waystar.

Waystar, viewed as a software stock, was a detractor in the quarter due to stock-specific issues. The company provides mission-critical software for the hospitality industry, but its performance has been impacted by competitive worries and manufacturing challenges. This has led us to exit our position as we believe our original investment thesis is no longer valid.

Waystar has recently seen strong business momentum due to a struggling competitor which we believe will lead to accelerating revenue growth in the future. This positive outlook is supported by the company's ability to capitalize on market opportunities, positioning it well for growth despite industry challenges. We are optimistic about its potential to improve market share and drive profitable growth in the coming years.

Waystar is a health care information service company that connects payors and providers, primarily by processing bills and insurance claims for hospitals and doctors. The business is historically largely insulated from reimbursement changes or Washington policy noise. This resilience positions Waystar favorably in the current environment, making it an attractive addition to our portfolio as we focus on premier growth compounders.