Waystar Holding Corp. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. Waystar Holding Corp. provides mission-critical, AI-powered cloud technology to healthcare organizations, streamlining payment workflows for providers, patients, and payers. The company operates as a single reportable segment and serves over 30,000 clients, including 16 of the top 20 U.S. News Best Hospitals. The reporting period includes the full impact of the Iodine Software Holdings, Inc. acquisition, which closed on October 1, 2025.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $313.9 million | $256.4 million |
| Net Income | $43.3 million | $29.3 million |
| Diluted EPS | $0.22 | $0.16 |
| Adjusted EBITDA | $135.4 million | $107.7 million |
| Operating Cash Flow | $84.9 million | $64.2 million |
| Total Debt (Outstanding) | $1.48 billion | $1.48 billion |
| Cash & Equivalents | $34.3 million | $224.0 million |
| Investment Securities | $124.6 million | $24.9 million |
Margins: Net income margin improved to 13.8% from 11.4%. Adjusted EBITDA margin increased to 43.1% from 42.0%.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 22.4% year-over-year, driven by a 37.7% increase in subscription revenue and a 7.3% increase in volume-based revenue.
- Profitability: Net income rose 47.9% to $43.3 million, supported by operating leverage and higher transaction volumes.
- Expense Increases:
- R&D: Increased 65.8% to $18.4 million, primarily due to personnel costs and stock-based compensation.
- G&A: Increased 31.9% to $30.7 million, driven by a $4.6 million increase in stock-based compensation.
- Depreciation & Amortization: Increased 24.2% to $41.5 million, largely due to new intangible assets from the Iodine acquisition.
- Balance Sheet: Cash and cash equivalents decreased by approximately $189.7 million compared to the prior year quarter, while investment securities increased by $99.7 million as the company deployed excess cash into short-term debt securities.
Outlook, Commentary, and Risks
Management Commentary: Management highlighted a Net Revenue Retention Rate of 110.5% for the trailing twelve months ended March 31, 2026. The company continues to leverage its "Waystar AltitudeAI" engine to automate workflows. The Iodine acquisition is expected to bolster AI leadership and improve financial performance for providers.
Debt & Liquidity: On February 13, 2026, the company amended its Receivables Facility, increasing the limit to $100 million and extending the maturity to 2029. Proceeds were used to repay $20 million of the First Lien Credit Facility. The company maintains interest rate swaps and caps to mitigate variable rate risk on its First Lien Credit Facility.
Risks & Contingencies:
- Regulatory & Cybersecurity: Risks include evolving healthcare regulations, data privacy laws, and potential cybersecurity breaches.
- Integration: Risks associated with successfully integrating the Iodine acquisition.
- Debt Covenants: The company is subject to restrictive covenants in its Credit Facilities, including collection thresholds for accounts receivable.
Investor Verification Checklist
- Debt Structure: Verify the terms of the amended Receivables Facility and the effective interest rates on the First Lien Credit Facility (5.84% as of March 31, 2026).
- Acquisition Integration: Monitor the financial contribution of the Iodine acquisition and any measurement period adjustments to goodwill.
- Stock-Based Compensation: Review the trajectory of stock-based compensation expenses, which increased significantly in G&A and R&D.
- Liquidity Position: Assess the composition of cash and investment securities, noting the shift from cash equivalents to investment securities.
- Net Revenue Retention: Track the Net Revenue Retention Rate (110.5%) to validate the recurring revenue model's stability.