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    Waystar Holding (WAY)

    WAY Q4 2024: Volume growth to normalize at 1-2% in 2025, NRR at 110%

    Reported on Jul 24, 2025 (Before Market Open)
    Pre-Earnings Price$45.83Open (Feb 18, 2025)
    Post-Earnings Price$45.83Open (Feb 18, 2025)
    Price Change
    $0.00(0.00%)
    • Robust Cross-Selling & Upselling Momentum: Approximately 30% of clients impacted by a competitor incident are already exploring additional software modules—highlighting strong cross-sell potential that reinforces the company’s 110% net revenue retention and indicates a sustainable expansion of wallet share.
    • Resilient Volume Dynamics Despite Seasonality: The Q&A emphasized that, even with expected seasonal drops, actual utilization of volume-based revenue was higher than anticipated due to strong patient activity. This suggests that underlying demand remains robust and may support organic growth moving forward.
    • Expansive and High-Quality Pipeline: Management highlighted a solid, year-beginning pipeline—with around 98% of the year’s revenue already under contract in typical years—and a natural land-and-expand strategy, especially in ambulatory markets. This stable pipeline fuels confidence in sustained long-term revenue growth and operational efficiency.
    • Normalization of Growth: In 2024, abnormal revenue growth was aided by rapid onboarding of clients after a competitor’s cyber attack. However, Q&A discussions highlighted that in 2025, the company expects volume-based revenue to revert to its traditional 1% to 2% growth, suggesting that future revenue increases might be tepid compared to the previous abnormal year.
    • Reliance on Cross-Sell and Integration Risks: The bear case can point to dependency on expanding the wallet share from existing clients, as only about 30% of newly impacted providers are already exploring additional software modules. This reliance on successful cross-selling—coupled with ongoing integration of acquisitions—raises execution risks if incremental sales or effective integration falter.
    • Uncertainty in Patient Credit Quality and Utilization: The company avoided commenting on patient credit quality during the Q&A, creating ambiguity around future revenue recognition from the patient payments segment. Any decline or delay in patient utilization could negatively impact volume-based revenue, posing a risk to the overall growth forecast.
    1. Direct Connectivity
      Q: Direct connectivity and M&A contribution?
      A: Management is expanding direct payer connections using modern protocols, while noting that the M&A contribution remains modest as integrations continue, promising future margin benefits.

    2. Revenue Growth
      Q: What drives revenue growth: new, wallet or core?
      A: They attribute growth to higher patient visit volumes, modest price increases, and steady cross-sell, maintaining a 110% NRR that underscores their overall revenue strength.

    3. Cross-Sell Impact
      Q: How is cross-sell reflected in 2025 guidance?
      A: The firm embeds cross-sell within its guidance as seen in a robust existing contract base and 30% of new clients already exploring additional modules, reinforcing growth expectations.

    4. Pipeline and NRR
      Q: What is the cross-sell pipeline and expected NRR?
      A: They report a strong land-and-expand pipeline bolstered by ongoing customer engagement, with NRR remaining consistent around 110%, though detailed attributions remain undisclosed.

    5. Volume Dynamics
      Q: What about volume-based revenue utilization trends?
      A: Management observed a softer-than-anticipated seasonal dip in patient payment volumes and expects a normalized annual growth rate of 1%-2% in 2025.

    6. Policy Impact
      Q: Will Medicaid/ACA changes adversely affect revenue?
      A: They believe their platform transcends political shifts, expecting no negative impact from policy changes and seeing potential opportunities in smart IT spending.

    7. Product Demand
      Q: Which modules are resonating with hospital clients?
      A: Software solutions that reduce denied claims—especially AI-powered eligibility and prior authorization modules—are gaining traction, reflecting strong demand among hospitals.

    8. Large System Pipeline
      Q: Is the large system pipeline growing compared to before?
      A: The pipeline remains robust, with notable momentum among hospitals and health systems supported by compelling case studies and client satisfaction.

    9. Ambulatory vs. Hospital
      Q: How is the Change benefit split: ambulatory vs. hospitals?
      A: The bulk of the Change benefit is coming from the ambulatory segment, while health systems, with a typically longer sales cycle, show emerging but less immediate impact.

    Research analysts covering Waystar Holding.