WAY

Waystar Holding Corp. Q2 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026. Waystar Holding Corp. provides mission-critical, AI-powered cloud technology to healthcare organizations, streamlining payment workflows for providers and patients. 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

Note: Debt includes $1.37 billion in First Lien Term Loan and $100 million in Receivables Facility. Cash balance excludes $32.8 million in restricted cash held in lockbox accounts for client disbursements.

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 18.1% quarter-over-quarter and 20.2% year-over-year (YTD). Growth was driven primarily by a 34.5% increase in subscription revenue and a 2.8% increase in volume-based revenue.
• Profitability: Net income rose 27.0% in Q2 and 36.9% YTD. Operating margin remained stable at 23.8% for Q2.
• Expense Increases:
  • R&D: Increased 40.4% QoQ and 52.3% YTD, primarily due to higher personnel costs.
  • G&A: Increased 24.6% QoQ, driven by stock-based compensation and a $2.0 million impairment charge for an office exit.
  • Depreciation & Amortization: Increased 24.1% due to new intangible assets from the Iodine acquisition.
• Balance Sheet: Investment securities grew significantly to $179.0 million (from $24.9 million at year-end 2025). Goodwill decreased slightly by $2.0 million due to a measurement period adjustment related to the Iodine acquisition.

Guidance, Outlook, and Risks

• Management Commentary: Management highlighted a Net Revenue Retention Rate of 108.3% for the trailing 12 months. The company continues to leverage its "AltitudeAI" engine to automate workflows. No specific forward-looking financial guidance was provided in this text.
• Cybersecurity Incident: In early June 2026, Waystar identified an unauthorized acquisition of point-in-time copies of source code (used for testing) and inactive data files from a third-party cloud repository. The incident involved data associated with fewer than 1% of clients and did not impact active production systems. Costs related to this incident are included in "Other" adjustments for non-GAAP measures.
• Capital Allocation: The Board authorized a $200 million stock repurchase plan in May 2026. As of June 30, 2026, the company repurchased 659,061 shares for approximately $12.7 million, leaving approximately $187.3 million remaining under the plan.
• Executive Changes: Alpana Wegner was appointed Chief Financial Officer, effective August 1, 2026, replacing Steven M. Oreskovich, who will transition to a strategic advisor role.
• Risks: Key risks include the evolving healthcare regulatory landscape, dependence on third-party vendors, cybersecurity threats, and the ability to integrate acquired businesses successfully.

Investor Verification Checklist

• Cybersecurity Impact: Verify the extent of the June 2026 data incident, specifically regarding the "inactive data" and potential regulatory notifications or client churn.
• Debt Covenants: Confirm compliance with debt covenants given the $1.47 billion debt load and the recent refinancing of the Receivables Facility.
• Restricted Cash: Analyze the $32.8 million in restricted cash to ensure it is correctly excluded from liquidity calculations for operational needs.
• Non-GAAP Adjustments: Review the specific costs included in the "Other" line item of the Adjusted EBITDA reconciliation related to the cybersecurity incident.
• Stock Repurchase Execution: Monitor the pace of the $200 million buyback program relative to share price and cash flow generation.