Waystar Holding Corp. 10-Q Summary: Q3 2025
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. Waystar Holding Corp. is a provider of mission-critical cloud technology for healthcare payments, serving over 30,000 clients. The company operates as a single reporting segment and is classified as an emerging growth company and non-accelerated filer. As of October 20, 2025, there were 191,316,583 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | YTD 9M 2025 | YTD 9M 2024 |
|---|---|---|---|---|
| Revenue | $268.7M | $240.1M | $795.7M | $699.4M |
| Net Income | $30.6M | $5.4M | $92.1M | ($38.2M) |
| Operating Income | $60.2M | $27.1M | $190.3M | $70.6M |
| Adjusted EBITDA | $112.7M | $96.7M | $333.0M | $283.3M |
| Operating Cash Flow (YTD) | $243.0M (2025) vs $105.0M (2024) | |||
| Cash & Equivalents | $421.1M (as of Sept 30, 2025) | |||
| Total Debt (Outstanding) | $1.23B (as of Sept 30, 2025) |
Margins: Operating margin improved to 22.4% in Q3 2025 from 11.3% in Q3 2024. Adjusted EBITDA margin was 42.0% for Q3 2025.
Material Changes vs. Prior Period
- Profitability Surge: The company transitioned from a net loss of $38.2M in the first nine months of 2024 to a net income of $92.1M in the same period of 2025. This is primarily driven by a $71.5M reduction in interest expense due to the $1.0B debt paydown executed in 2024 and a $48.5M decrease in depreciation and amortization as intangible assets became fully amortized.
- Revenue Growth: Revenue increased 13.8% year-over-year for the nine months ended September 30, 2025, driven by both subscription revenue (up 16.1%) and volume-based revenue (up 11.7%).
- Expense Management: General and administrative expenses decreased 4.4% year-over-year for the nine-month period, largely due to a reduction in non-recurring stock-based compensation related to performance condition options that vested upon the 2024 IPO.
Outlook, Risks, and Unusual Items
- Acquisition of Iodine: On October 1, 2025 (subsequent to the reporting period), Waystar completed the acquisition of Iodine Software Holdings, Inc., for a total consideration of approximately $1.25 billion ($458.6M cash and stock). This is expected to bolster AI capabilities and automate clinical documentation.
- Debt Facility Amendment: On October 1, 2025, the company amended its First Lien Credit Agreement to increase the facility by $250M and the revolving credit facility capacity to $500M. The company drew $30M on the revolver to fund the Iodine acquisition.
- Secondary Offerings: Institutional investors completed three secondary offerings in 2025 (February, May, September). The company did not receive proceeds from these sales but incurred $4.6M in expenses on behalf of selling stockholders for the nine months ended September 30, 2025.
- Key Risks: Risks include the ability to integrate the Iodine acquisition, dependence on healthcare transaction volumes, regulatory changes in healthcare and data privacy, and interest rate fluctuations affecting variable-rate debt.
Investor Verification Checklist
- Debt Covenants: Verify compliance with debt covenants following the October 2025 facility amendment and the $30M revolver draw.
- Acquisition Accounting: Monitor the final accounting treatment and integration costs for the Iodine acquisition, which was completed post-period.
- Interest Rate Exposure: Assess the impact of the remaining variable-rate debt (SOFR + 2.00%) on future interest expense, noting the company's use of interest rate swaps to hedge portions of this exposure.
- Stock-Based Compensation: Review future stock-based compensation obligations, estimated at $41.0M for unvested time-based options and $110.8M for unvested RSUs as of September 30, 2025.
- Lease Settlement: Confirm the accounting impact of the $15.0M office lease settlement reached on October 28, 2025.