Executive Summary

Waystar delivered double‑digit growth with revenue of $268.7M (+12% YoY) and adjusted EBITDA margin of 42%; Q3 beat S&P Global consensus on revenue and GAAP EPS but missed on SPGI EBITDA definition due to non‑GAAP adjustments emphasized by management . Consensus: revenue $256.8M, EPS $0.35 vs actual $0.37; SPGI EBITDA estimate $102.0M vs actual $90.0M* [GetEstimates].
Management raised FY25 guidance: revenue to $1.085–$1.093B and adjusted EBITDA to $451–$455M, with non‑GAAP diluted EPS to $1.46–$1.47 .
Iodine Software integration closed Oct 1; ~70% of $15M annualized cost synergies already actioned; Q4 contribution expected: ~$30M revenue and ~$12M adj. EBITDA; pro forma leverage ~3.4x vs 1.9x standalone at 9/30 .
Key narrative shifts: patient utilization beginning to revert to historical levels (seasonality headwind in patient payments), mix shift to higher‑margin solutions supporting margin outperformance, and acceleration of AI‑driven product roadmap (AltitudeAI) .
Potential stock catalysts: raised FY25 guidance, synergy execution/on‑track integration, accelerating AI monetization, and recent S&P SmallCap 600 inclusion (broader investor base/liquidity) .

What Went Well and What Went Wrong

What Went Well

Outperformed guidance with double‑digit growth and strong margins; “outpacing our guidance on both measures,” with Q3 adjusted EBITDA margin of 42% and NRR of 113% .
Raised FY25 outlook across revenue and adjusted EBITDA on back of durable demand and mix shift to higher‑margin solutions; adj. EBITDA outperformance aided by operational initiatives .
Strategic progress: closed Iodine acquisition; cross‑sell platform story reinforced, with roadmap accelerated by ~2 years; appointment of Iodine founder as Chief AI & Product Officer .

What Went Wrong

SPGI EBITDA miss versus consensus (actual ~$90.0M vs $102.0M estimate), reflecting definitional differences vs company’s reported adjusted EBITDA of $112.7M [GetEstimates].
Volume‑based revenue declined 4% sequentially due to seasonality and earlier deductible timing; management highlighted utilization reverting toward historical rates (a moderation versus earlier tailwinds) .
Continued reliance on non‑GAAP adjustments (notably intangible amortization and stock‑based comp) to frame profitability; non‑GAAP net income $67.8M vs GAAP $30.6M in Q3 .

Financial Results

Core P&L and Margins

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$256.4	$270.7	$268.7
GAAP Diluted EPS ($)	$0.16	$0.18	$0.17
Non‑GAAP Diluted EPS ($)	$0.32	$0.36	$0.37
Adjusted EBITDA ($M)	$107.7	$112.6	$112.7
Adjusted EBITDA Margin (%)	42.0%	41.6%	42.0%
Net Income Margin (%)	11%	12%	11.4%

Notes: Q3 2025 revenue grew 12% YoY; adjusted EBITDA margin 42% .

Revenue Disaggregation

Revenue Type ($M)	Q1 2025	Q2 2025	Q3 2025	Q3 YoY Growth
Subscription	$125.0	$131.1	$134.5	+14%
Volume‑based	$129.9	$138.3	$132.3	+10%

KPIs and Cash Flow

KPI	Q1 2025	Q2 2025	Q3 2025
Clients >$100k LTM	1,244	1,268	1,306
Net Revenue Retention (LTM)	114%	115%	113%
Cash from Operations ($M)	$64	$97	$82
Unlevered Free Cash Flow ($M)	$79	$111	$96
Net Debt ($M)	—	$896.9 (6/30)	$813.7 (9/30)
Adj. Net Leverage (x)	—	2.2x (6/30)	1.9x (9/30)

Q3 2025 Actuals vs S&P Global Consensus

Metric	Actual	Consensus	Surprise
Revenue ($M)	268.651	256.753*	+$11.9M / +4.6% (beat)
Primary EPS ($)	0.37	0.35003*	+$0.02 / +5.7% (beat)
EBITDA ($M, SPGI def.)	90.032*	102.012*	−$12.0M / −11.8% (miss)

Consensus source: Values retrieved from S&P Global Market Intelligence.*
Note: Company’s adjusted EBITDA was $112.7M (non‑GAAP) .

Guidance Changes

Metric	Period	Previous Guidance (7/30/25)	Current Guidance (10/29/25)	Change
Total Revenue	FY 2025	$1.030–$1.042B	$1.085–$1.093B	Raised
Adjusted EBITDA	FY 2025	$418–$426M	$451–$455M	Raised
Non‑GAAP Net Income	FY 2025	$251–$257M	$271–$274M	Raised
Diluted Non‑GAAP EPS	FY 2025	$1.36–$1.40	$1.46–$1.47	Raised
Iodine Contribution (rev/adj. EBITDA)	Q4 2025	—	~$30M rev / ~$12M adj. EBITDA (40% margin)	New disclosure

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/Automation (AltitudeAI)	Launched AltitudeAI; focus on streamlining workflows and ROI . Continued innovation; Q2 deck highlighted AI‑powered growth .	Expanded denial prevention/recovery and patient engagement capabilities; 93% client confidence at True North; ROI case studies .	Strengthening
Iodine Software (M&A)	Agreement to acquire Iodine; expected to expand TAM, be accretive to growth/margins .	Closed 10/1; ~70% cost synergies actioned; roadmap accelerated ~2 years; cross‑sell beginning; William Chan named Chief AI & Product Officer .	Integration momentum improving
Utilization/Seasonality	Elevated utilization benefited results since early 2024 .	Patient utilization beginning to revert to historical levels; volume‑based revenue −4% q/q (seasonality in patient payments) .	Normalizing
Go‑to‑Market/Competition	Platform story and high win rates since IPO .	Emphasis on platform vs point solutions/EHR agents; pricing to value for AI; new SKUs; strong RFP activity .	Platform edge maintained
Digitization of Patient Payments	Growing patient financial care suite .	Shift from paper to mobile statements; better margin profile and NPS; long‑tail adoption .	Gradual adoption
Margin Philosophy	Maintained ~40% long‑term adjusted EBITDA margin target while investing .	42% in Q3; will reinvest AI‑driven efficiencies to sustain innovation/go‑to‑market; internal “Kaizen AI” initiatives .	Stable at ~40%+

Management Commentary

“Waystar delivered another quarter of double‑digit revenue growth and strong margins, outpacing our guidance on both measures.” — Matt Hawkins, CEO .
“Adjusted EBITDA margin was 42%, above our long‑term target…driven by a revenue shift to higher margin solutions and operational cost initiatives.” — Steve Oreskovich, CFO .
“Iodine…expands our total addressable market by more than 15%…accelerates innovation, and strengthens our ability to drive durable, profitable growth.” — CEO .
“We have already notified and acted on approximately 70% of annualized cost synergies.” — CFO .
“We estimate that Iodine accelerates portions of our product roadmap by nearly two years…William Chan now serving as Chief AI and Product Officer.” — CEO .

Q&A Highlights

Integration and cross‑sell: Client feedback at True North was “100% positive”; cross‑trained sales; only ~35–40% client overlap today, implying runway for cross‑sell .
Utilization/seasonality: Earlier deductible attainment timing led to −4% q/q volume‑based revenue; guide frames mid‑to‑high range outcomes depending on utilization trend into Q4 .
Patient payment digitization: Migration from paper to digital statements offers better margins and higher patient NPS; adoption expected to be gradual (multi‑quarter) .
Competitive landscape/EHR: Waystar positions as end‑to‑end cloud platform with data/AI advantages; interoperates with Epic/Cerner; strong win rates and ROI‑based sales motion .
AI monetization and internal leverage: Monetization via retention, price‑to‑value, and new SKUs; internal “Kaizen AI” driving productivity (Copilot licenses for all employees) with reinvestment of efficiencies .

Estimates Context

Revenue: $268.651M actual vs $256.753M consensus — beat (~+4.6%)* [GetEstimates].
Primary EPS: $0.37 actual vs $0.350 mean — beat (~+5.7%)* [GetEstimates].
EBITDA (SPGI definition): $90.0M actual vs $102.0M consensus — miss; company highlights adjusted EBITDA of $112.7M (42% margin), which is not directly comparable to SPGI EBITDA [GetEstimates].

Consensus values marked with an asterisk are retrieved from S&P Global Market Intelligence.*

Where estimates may adjust: Street likely lifts FY25 revenue and adjusted EBITDA to management’s new ranges; model mix shift favoring higher‑margin solutions; some may temper volume‑based assumptions given utilization normalization commentary .

Key Takeaways for Investors

Execution remains solid: revenue/EPS beats and 42% adjusted EBITDA margin underscore operational discipline; FY25 guide raised across revenue, adjusted EBITDA, and non‑GAAP EPS .
Integration track: Iodine closed with ~70% cost synergies already actioned; Q4 contribution quantified; pro forma leverage manageable with plan to delever ~1 turn annually .
AI differentiation: AltitudeAI capabilities and unified clinical + administrative data should support cross‑sell, pricing power, and ROI‑based sales wins versus point solutions/EHR modules .
Watch mix and seasonality: Patient payment seasonality and normalization of utilization can weigh on volume‑based revenue sequentially; offset by subscription mix enrichment .
Non‑GAAP framing: Adjusted EBITDA and non‑GAAP EPS drive the narrative; SPGI EBITDA consensus comparison may understate performance vs management’s preferred metrics [GetEstimates].
Liquidity/visibility: S&P SmallCap 600 inclusion may broaden ownership and improve liquidity; continued guide‑raising is a positive signal .
Near‑term setup: Q4 includes Iodine’s initial rev/EBITDA contribution; synergy realization and AI monetization updates are key stock drivers next quarter .

Citations:

Q3 press release and 8‑K: . Duplicate press version: .
Earnings call transcript: .
Prior quarters (trend): Q1 2025 ; Q2 2025 .
Iodine close release: .
S&P 600 inclusion: .
Consensus (S&P Global Market Intelligence): GetEstimates (see asterisked values).*

Waystar Holding Corp. (WAY)·Q3 2025 Earnings Summary