Waystar (NASDAQ:WAY) reported fourth-quarter and full-year fiscal 2025 results that management said marked a “defining year” for the healthcare revenue cycle management company, highlighted by topping $1 billion in annual revenue, exceeding revenue and EBITDA guidance, and completing the acquisition of Iodine Software.
Fourth-quarter growth, retention, and bookings
CEO Matt Hawkins said fourth-quarter revenue reached $304 million, up 24% year-over-year, including 12% organic growth. He said strength was driven by both subscription and volume-based revenue, elevated patient utilization, and successful onboarding of new clients.
On customer metrics, Hawkins reported 112% net revenue retention, 97% gross revenue retention, and a Net Promoter Score above 70, citing cross-sell and upsell momentum. He said Waystar posted a record bookings quarter and ended the year with a robust sales pipeline and the largest implementation backlog in its history.
Profitability and cash flow
CFO Steve Oreskovich said the quarter included a full contribution from Iodine. Adjusted EBITDA in the fourth quarter was $129 million, up 29% year-over-year, with an adjusted EBITDA margin of about 43%. For the full year, adjusted EBITDA was $462 million, up 21%, with a 42% margin.
Oreskovich said the fourth-quarter adjusted EBITDA margin benefited from about $2 million of realized acquisition cost synergies, representing roughly 1% of margin improvement in the quarter.
Waystar ended the quarter with $86 million in cash equivalents and short-term investments and $1.5 billion in gross debt. Unlevered free cash flow was $80 million in the fourth quarter and $365 million for the full year, representing 79% conversion of adjusted EBITDA to unlevered free cash flow. Oreskovich said net leverage was 3x as of December 31, down almost a half turn since the beginning of the quarter when the Iodine acquisition closed, and the company expects to operate at or below a 3x leverage ratio while deleveraging at about one turn annually.
Iodine acquisition and integration progress
Management positioned Iodine as a strategic expansion into “mid-cycle” revenue cycle workflows. Hawkins said Iodine adds more than 1,000 hospitals and health systems and brings clinical intelligence that, combined with Waystar’s financial data, creates what he described as encounter visibility and financial outcome intelligence “at scale.” He said customer overlap is only 35%, expanding addressable market and cross-sell opportunity.
Oreskovich said Iodine contributed $31 million of revenue in the fourth quarter, slightly ahead of the company’s previously communicated expectation. Hawkins said integration is ahead of plan, with commercial teams fully integrated and generating cross-sell traction. The company now expects to realize over 90% of committed cost synergies in fiscal 2026, and Oreskovich quantified expected 2026 savings at about $14 million, ahead of the prior timeline.
AI strategy and customer demand
Hawkins emphasized Waystar’s AI positioning throughout the call, describing demand for “mission-critical, AI-powered revenue cycle software.” He said Waystar Altitude AI prevented more than $15 billion in denials for clients in 2025, reduced appeal time by 90%, and drove “double-digit” increases in denial overturn rates. He also cited new agentic capabilities that cut documentation analysis by 40%, supported by data from 1 in 3 U.S. hospital discharges and more than 7 billion annual transactions.
Management said AI is embedded across the platform rather than offered as a point solution overlay. Hawkins said approximately 50% of Waystar’s solutions leverage AI, nearly 40% of revenue is driven by AI embedded in reimbursement workflows, and roughly 30% of 2025 new bookings came from AI-powered capabilities. In response to investor questions about whether providers would build AI internally, Hawkins said most customers prefer to consume AI from a trusted partner integrated into systems of record and action, noting many providers lack the engineering resources to develop and deploy AI themselves.
Hawkins also outlined multiple AI monetization paths, including improved retention, annual price increases aligned to delivered value, and new SKUs for new agentic capabilities. He said Waystar expects to launch several new AI agents “this year,” with some representing new revenue opportunities and others enhancing existing modules.
2026 outlook and operating assumptions
For fiscal 2026, Oreskovich guided to revenue of $1.274 billion to $1.294 billion (midpoint $1.284 billion), representing 17% year-over-year growth. He said the midpoint assumes normalized organic growth of about 10%, with a similar implied growth rate for Iodine.
Waystar also guided to adjusted EBITDA of $530 million to $540 million (midpoint $535 million), representing 16% growth and an adjusted EBITDA margin of about 42%. The company expects gross margins of approximately 68%, consistent with 2025, and said the 2026 margin outlook includes about a 1% uplift from acquisition cost savings.
On seasonality and utilization, Oreskovich said Waystar expects revenue to grow 1% to 3% sequentially throughout 2026, with the third quarter at the low end due to patient payment seasonality. He said management assumes patient utilization remains healthy and, when asked for more color, indicated utilization expectations are on the higher side of the company’s historical 1% to 2% baseline. He also noted that patient payment solutions have historically been about 30% of revenue, but with Iodine in the mix, they are expected to be closer to 25% going forward, which he said should make first-half/second-half dynamics less pronounced than in prior years.
In closing remarks, Hawkins said Waystar is entering 2026 with momentum, emphasizing durable growth, strong margins, meaningful cash generation, and what he described as “embedded, monetized” AI delivering measurable outcomes in revenue cycle workflows.
About Waystar (NASDAQ:WAY)
Waystar (NASDAQ:WAY) is a leading provider of cloud-based revenue cycle management and payment solutions for healthcare organizations. The company’s unified platform streamlines the entire financial continuum of patient care, from eligibility verification and claim submission to payment reconciliation and patient billing. By automating key processes and improving claim accuracy, Waystar helps providers reduce administrative overhead, accelerate cash flow and enhance overall revenue performance.
At the core of Waystar’s offering is a SaaS-based architecture that integrates seamlessly with existing electronic health record (EHR) systems and payer networks.
