Waystar (WAY 3.76%), a leading provider of cloud-based healthcare payment software, reported second quarter 2025 earnings results on July 30, 2025. The main news: GAAP revenue climbed to $270.7 million in Q2 2025, exceeding consensus estimates by $11.17 million, and non-GAAP earnings per share (EPS) reached $0.36, above the $0.34 non-GAAP analysts expected. The company announced robust growth across its platform, especially in AI-powered provider solutions. Management raised guidance for full-year 2025, highlighting continued demand and the rapid onboarding of large clients, while also noting the business’s recurring revenue model and strong free cash flow. Overall, the period saw outperformance versus expectations, sustained high adjusted EBITDA margins (42%), and progress toward strategic goals.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.36 | $0.34 | $0.26 | 38.5% |
| Revenue | $270.7 million | $259.53 million | $234.5 million | 15.4% |
| Adjusted EBITDA | $112.6 million | $93.9 million | 19.9% | |
| Adjusted EBITDA Margin | 41.6% | 40.0% | 1.6 pp | |
| Unlevered Free Cash Flow | $110.8 million | $50.3 million | 120.1% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
Waystar is a cloud-based healthcare payment technology company. It delivers software that automates and streamlines the complex billing and payment cycle for medical providers. Its platform processes over six billion healthcare payment transactions annually as of 2025, and helps providers maximize revenue by reducing claim denials and speeding up payments.
The company’s main goals include expanding its use of artificial intelligence (AI) to optimize revenue cycle management for healthcare clients, deepening relationships with top hospital systems, and scaling its network through a flexible, secure, and compliant software platform. Recent efforts also focus on integrating new clients quickly and using partnerships and acquisitions to add capabilities.
Quarter Highlights: Financial and Operational Results
Revenue for the second quarter climbed to $270.7 million, up 15% year over year. This beat analysts’ expectations by 4.3%, and was driven by strong demand for provider solutions and the benefits of AI-powered features embedded in the company’s offerings.
Non-GAAP EPS rose to $0.36, with the adjusted EBITDA margin improved to 41.6%. These results were supported by brisk growth in subscription revenue, which reached $131.1 million, and continued expansion of higher-margin provider solutions that now account for about 70% of total revenue.
Fueled by rapid adoption among new and existing clients, three large clients were onboarded faster than expected, bringing both immediate volume-based revenue and anticipated recurring future subscription streams. Volume-based revenue also expanded, partly due to these competitive client wins, and is expected to transition more to subscriptions as rollouts mature.
AI integration remains central to Waystar’s competitive advantage. The company’s AltitudeAI software has led to a 70% boost in appeal productivity and helped providers prevent nearly $6 billion in denied claims in the first half of 2025. More than 90% of prior authorizations are now handled through “touchless” automation, reducing manual work and driving efficiency for healthcare organizations. The net revenue retention rate (NRR) rose to 115%.
These results were aided by both margin expansion and revenue mix improvements. The company’s cash and equivalents at quarter end stood at $290.3 million, with low revenue concentration among its top clients.
The company took further steps toward industry consolidation with the planned acquisition of Iodine Software, a move expected to expand the total addressable market by 15% and add significant subscription revenue after closing. Management also highlighted the company’s proven ability to integrate acquisitions successfully, with nine deals completed since 2018.
Product Families and Progress
Provider solutions, the main product family, consist of automated software to help organizations submit claims, detect insurance coverage, and optimize payment flows. AI functionality in these tools continues to improve outcomes, reduce administrative burden, and shorten the time it takes for providers to get paid. Patient payment solutions represent the other major segment, supporting patient-facing payment and billing functions. Both segments contributed to sales and margin improvement, but provider solutions, being higher margin, lifted the profit profile for the quarter.
AltitudeAI, the latest addition to the technology suite, uses advanced artificial intelligence to automate appeals, boost overturn rates on denied claims, and free up staff for higher-value tasks. For example, providers using AltitudeAI experienced capacity savings equivalent to nearly ten full-time employees, as reported by Waystar management, and saw double-digit increases in claim overturn rates. The strong adoption of these AI-driven features underpins Waystar’s position as a trusted vendor with over one million healthcare provider users and relationships with 16 of the top 20 U.S. hospital systems.
Outlook and Investor Considerations
Waystar raised its full-year 2025 revenue guidance to a range of $1.03 billion to $1.04 billion, with adjusted EBITDA guidance increased to between $418 million and $426 million. The new ranges mark an upward adjustment of $22 million and $12 million, respectively, at their midpoints for FY2025 revenue and adjusted EBITDA guidance. Non-GAAP net income is now projected at $251 million to $257 million, and the company expects diluted non-GAAP EPS of $1.36 to $1.40. Guidance excludes any impact from the pending Iodine acquisition, which is expected to close at year-end 2025.
Management cautioned that, due to revenue seasonality and patient payment trends, revenue in the second half will be sequentially lower than in the first half. Q3 and Q4 are expected to be similar to one another in terms of dollar amounts. Revenue mix shifts and integration execution will play key roles for the rest of the year and into next, especially as more volume-based revenue transitions into recurring subscriptions and the integration of Iodine unfolds.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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