Q2 2025 Waystar Holding Corp Earnings Call

Isn't an answer session. Please be advised today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Greg Mcdowell Investor Relations. Please go ahead.

Thank you operator.

Afternoon, everyone and thank you for joining <unk> second quarter 2025 earnings call.

Joining me today are Matt Hawkins waste, our Chief Executive Officer, and Steve arrest of ish based.

<unk> Chief Financial Officer after their remarks, we will open the call up for questions.

This afternoon, we issued a press release announcing our financial results and published a presentation slide deck to accompany our prepared remarks, you can find these materials in the Investor Relations section of our website.

Speaker #1: Good day and thank you for standing by. Welcome to the Waystar second quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode.

Operator: Good day and thank you for standing by. Welcome to the Waystar second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Greg McDowell, investor relations. Please go ahead.

Investors not waste our dot com.

Before we begin I would like to remind you that this call contains forward looking statements, which are predictions about future events. Examples of these statements include expectations of future financial results growth and margins. These statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed in these statements.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. Please be advised, today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Greg McDowell, Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Thank you, operator. Good afternoon, everyone, and thank you for joining Waystar's second quarter 2025 earnings call. Joining me today are Matt Hawkins, Waystar's Chief Executive Officer, and Steven Oreskovich.

Greg McDowell: Thank you, operator. Good afternoon, everyone, and thank you for joining Waystar's second quarter 2025 earnings call. Joining me today are Matt Hawkins, Waystar's Chief Executive Officer, and Steven Oreskovich, Waystar's Chief Financial Officer. After their remarks, we will open the call up for questions. This afternoon, we issued a press release announcing our financial results and published a presentation slide deck to accompany our prepared remarks. You can find these materials in the investor relations section of our website at investors.waystar.com. Before we begin, I would like to remind you that this call contains forward-looking statements, which are predictions about future events. Examples of these statements include expectations of future financial results, growth, and margins. These statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed in these statements.

For a full discussion of the risks and other factors that may impact. These forward looking statements. Please refer to this afternoon's press release and the reports we file with the SEC.

Speaker #2: Waystar's Chief Financial Officer. After their remarks, we will open the call up for questions. This afternoon, we issued a press release announcing our financial results and published a presentation slide deck to accompany our prepared remarks.

All of which are available on the Investor Relations page of our website.

Any forward looking statements provided during this call are made only as of the date of this call.

Speaker #2: You can find these materials in the Investor Relations section of our website at investors.waystar.com. Before we begin, I would like to remind you that this call contains forward-looking statements, which are predictions about future events.

During today's call. We will also discuss certain non-GAAP financial measures. We have provided reconciliations of the non-GAAP financial measures included in our remarks to the most directly comparable GAAP measures together with explanations of these measures in the appendix of the presentation slide deck and our earnings release.

Speaker #2: Examples of these statements include expectations of future financial results, growth, and margins. These statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed in these statements.

With that I will turn it over to Matt.

Thank you Greg and good afternoon, everyone. Thank you for joining our second quarter 2025 earnings call I will begin today by highlighting <unk> recently announced agreement to acquire <unk> software a proven leader in AI powered clinical intelligence iodine is a highly complementary strategic fit in this transaction.

Speaker #2: For a full discussion of the risks and other factors that may impact these forward-looking statements, please refer to this afternoon's press release and the reports we file with the SEC.

Greg McDowell: For a full discussion of the risks and other factors that may impact these forward-looking statements, please refer to this afternoon's press release and the reports we file with the SEC, all of which are available on the investor relations page of our website. Any forward-looking statements provided during this call are made only as of the date of this call. During today's call, we will also discuss certain non-GAAP financial measures. We have provided reconciliations of the non-GAAP financial measures included in our remarks to the most directly comparable GAAP measures, together with explanations of these measures in the appendix of the presentation slide deck and our earnings release. With that, I will turn it over to Matt.

Speaker #2: All of which are available on the Investor Relations page of our site. Any forward-looking statements provided during this call are made only as of the date of this call.

<unk> is a major step forward in accelerating waste ours mission that simplify health care payments, we look forward to extending <unk> leadership.

Speaker #2: During today's call, we will also discuss certain non-GAAP financial measures. We have provided reconciliations of the non-GAAP financial measures included in our remarks to the most directly comparable GAAP measures.

And the critical stage of their revenue cycle between care delivery and claim submission where providers lose billions each year to administrative inefficiencies and expanding wastewater total addressable market by more than 15%.

Speaker #2: Together with explanations of these measures, in the appendix of the presentation slide deck and our earnings release. With that, I will turn it over to Matt.

Purchase price of $1. Two 5 billion represents a high teens enterprise value to adjusted EBITDA multiple based on <unk> estimated 2025 EBITDA adjusted for synergies.

Speaker #3: Thank you, Greg, and good afternoon, everyone. Thank you for joining our second quarter 2025 earnings call. I will begin today by highlighting Waystar's recently announced agreement to acquire Iodine Software, a proven leader in AI-powered clinical intelligence.

Matt Hawkins: Thank you, Greg, and good afternoon, everyone. Thank you for joining our second quarter 2025 earnings call. I will begin today by highlighting Waystar's recently announced agreement to acquire Iodine Software, a proven leader in AI-powered clinical intelligence. Iodine is a highly complementary strategic fit, and this transaction is a major step forward in accelerating Waystar's mission to simplify healthcare payments. We look forward to extending Waystar's leadership in the critical stage of the revenue cycle between care delivery and claim submission, where providers lose billions each year to administrative inefficiencies and expanding Waystar's total addressable market by more than 15%. The purchase price of $1.25 billion represents a high Tinian's enterprise value to adjusted EBITDA multiple based on Iodine's estimated 2025 EBITDA adjusted for synergies.

As a clear vote of confidence in waste, our advent international <unk> largest shareholder is expected to receive a 100% of its consideration in the form of waste our common stock subject to an 18 month lockup agreement.

Speaker #3: Iodine is a highly complementary strategic fit, and this transaction is a major step forward in accelerating Waystar's mission to simplify healthcare payments. We look forward to extending Waystar's leadership in the critical stage of the revenue cycle between care delivery and claim submission, where providers lose billions each year to administrative inefficiencies.

<unk> brings a highly recurring subscription based business model with a financial profile that is aligned with waste stars. We expect the transaction to be immediately accretive to gross margin and adjusted EBITDA margin following closing and accretive to revenue growth and non-GAAP net income per diluted.

Speaker #3: And expanding Waystar's total addressable market by more than 15%. The purchase price of $1.25 billion represents a high teens enterprise value to adjusted EBITDA multiple based on Iodine's estimated 2025 EBITDA adjusted for synergies.

Share in 2027.

The acquisition of iodine also accelerates waste <unk> product roadmap by nearly two years unlocking a new level of automation accuracy and performance for providers.

Speaker #3: As a clear vote of confidence in Waystar, Advent International, Iodine's largest shareholder, is expected to receive 100% of its consideration in the form of Waystar common stock, subject to an 18-month lockup agreement.

Matt Hawkins: As a clear vote of confidence in Waystar, Advent International, Iodine's largest shareholder, is expected to receive 100% of its consideration in the form of Waystar Common Stock, subject to an 18-month lockup agreement. Iodine brings a highly recurring subscription-based business model with a financial profile that is aligned with Waystar's. We expect the transaction to be immediately accretive to gross margin and adjusted EBITDA margin following closing and accretive to revenue growth and non-GAAP net income per diluted share in 2027. The acquisition of Iodine also accelerates Waystar's product roadmap by nearly two years, unlocking a new level of automation, accuracy, and performance for providers. It advances Waystar's strategic position to eradicate unnecessary denials, maximize reimbursement, and deliver meaningful ROI across the revenue cycle. Following the anticipated close by year-end, we will activate Waystar's proven M&A playbook.

Advances waste, our strategic position to eradicate unnecessary denials maximize reimbursement and deliver meaningful ROI across their revenue cycle.

Following the anticipated close by year end, we will activate wasters proven M&A playbook.

Speaker #3: Iodine brings a highly recurring subscription-based business model with a financial profile that is aligned with Waystar's. We expect the transaction to be immediately accretive to gross margin and adjusted EBITDA margin following closing, and accretive to revenue growth and non-GAAP net income per diluted share in 2027.

Our combined go to market team will capitalize on bidirectional cross sell opportunities expanding wasters reach into <unk> client base, introducing <unk> platform to waste, our clients and unlocking greater value, where we already intersect.

Speaker #3: The acquisition of Iodine also accelerates Waystar's product roadmap by nearly two years, unlocking a new level of automation, accuracy, and performance for providers. It advances Waystar's strategic position to eradicate unnecessary denials, maximize reimbursement, and deliver meaningful ROI across the revenue cycle.

Across the nine acquisitions waste Star has completed we have demonstrated our ability to ensure seamless integration and capture identified synergies to drive growth operational excellence and financial performance.

For more on this important milestone we encourage you to review the materials published last week available on our Investor Relations website.

Speaker #3: Following the anticipated close by year-end, we will activate Waystar's proven M&A playbook. Our combined go-to-market team will capitalize on bidirectional cross-sell opportunities, expanding Waystar's reach into Iodine's client base, introducing Iodine's platform to Waystar clients, and unlocking greater value where we already intersect.

We'll dedicate the remainder of today's call to reviewing waste our Q2 results.

Matt Hawkins: Our combined go-to-market team will capitalize on bidirectional cross-sell opportunities, expanding Waystar's reach into Iodine's client base, introducing Iodine's platform to Waystar clients, and unlocking greater value where we already intersect. Across the nine acquisitions Waystar has completed, we have demonstrated our ability to ensure seamless integration and capture identified synergies to drive growth, operational excellence, and financial performance. For more on this important milestone, we encourage you to review the materials published last week, available on our investor relations website. We will dedicate the remainder of today's call to reviewing Waystar's Q2 results. Waystar delivered its fifth consecutive quarter as a public company of double-digit revenue growth and strong margins in Q2. Revenue reached $271 million, representing 15% year-over-year growth, with an adjusted EBITDA margin of 42%.

Waste are delivered its fifth consecutive quarter as a public company of double digit revenue growth and strong margins in Q2 revenue reached $271 million, representing 15% year over year growth with an adjusted EBITDA margin of 42%.

Speaker #3: Across the nine acquisitions Waystar has completed, we have demonstrated our ability to ensure seamless integration and capture identified synergies to drive growth, operational excellence, and financial performance.

Our momentum in the first half of 2025 has enabled waste or to raise full year guidance for both revenue and adjusted EBITDA, which Steve will cover in more detail shortly.

Speaker #3: For more on this important milestone, we encourage you to review the materials published last week, available on our Investor Relations website. We will dedicate the remainder of today's call to reviewing Waystar's Q2 results.

As providers navigate margin pressure workforce shortages and legislative changes waste ours AI powered software platform is in strong demand decision makers prioritize our mission critical platform, because we help their organizations get paid fully and accurately.

Speaker #3: Waystar delivered its fifth consecutive quarter as a public company of double-digit revenue growth and strong margins in Q2. Revenue reached $271 million, representing 15% year-over-year growth, with an adjusted EBITDA margin of 42%.

While reducing complexity and administrative burden.

<unk> is uniquely positioned to address evolving industry needs deliver meaningful ROI and create long term value for shareholders.

In a dynamic market and evolving policy landscape. Two recent developments are worth noting first the one big Beautiful Bill Act and second the prior authorization pledge led by Americas Health insurance plans.

Speaker #3: Our momentum in the first half of 2025 has enabled Waystar to raise full-year guidance for both revenue and adjusted EBITDA, which Steve will cover in more detail shortly.

Matt Hawkins: Our momentum in the first half of 2025 has enabled Waystar to raise full-year guidance for both revenue and adjusted EBITDA, which Steve will cover in more detail shortly. As providers navigate margin pressure, workforce shortages, and legislative changes, Waystar's AI-powered software platform is in strong demand. Decision makers prioritize our mission-critical platform because we help their organizations get paid fully and accurately while reducing complexity and administrative burden. Waystar is uniquely positioned to address evolving industry needs, deliver meaningful ROI, and create long-term value for shareholders. In a dynamic market and evolving policy landscape, two recent developments are worth noting. First, the One Big Beautiful Bill Act, and second, the Prior Authorization Pledge led by America's health insurance plans. The One Big Beautiful Bill Act introduces changes to Medicaid funding over the next decade and imposes stricter eligibility criteria for both Medicaid and Affordable Care Act exchange coverage.

Speaker #3: As providers navigate margin pressure, workforce shortages, and legislative changes, Waystar's AI-powered software platform is in strong demand. Decision-makers prioritize our mission-critical platform because we help their organizations get paid fully and accurately while reducing complexity and administrative burden.

The one big Beautiful Bill Act introduces changes to Medicaid funding over the next decade, and imposes stricter eligibility criteria for both Medicaid and Affordable Care Act exchange coverage importantly, we believe <unk> is well insulated from downside risk.

Speaker #3: Waystar is uniquely positioned to address evolving industry needs, deliver meaningful ROI, and create long-term value for shareholders. In a dynamic market and evolving policy landscape, two recent developments are worth noting.

Across a range of scenarios in a hypothetical analysis in which 15% of Medicaid funding were to be affected.

<unk> trailing 12 month revenue would be impacted by less than 1% more.

More importantly, these conditions highlight the advantage of wastewater is purpose built platform, which is already equipped to support providers across all payer types.

Speaker #3: First, the One Big Beautiful Bill Act. And second, the Prior Authorization Pledge led by America's Health Insurance Plans. The One Big Beautiful Bill Act introduces changes to Medicaid's funding over the next decade and imposes stricter eligibility criteria.

Whether volumes shift across Medicaid Medicare commercial or self pay waster enables providers to maximize reimbursement reduced denials and operate efficiently.

Speaker #3: For both Medicaid and Affordable Care Act exchange coverage, we believe Waystar is well insulated from downside risk across a range of scenarios. In a hypothetical analysis in which 15% of Medicaid funding were to be affected, Waystar's trailing 12-month revenue would be impacted by less than 1%.

As I will describe in a moment capabilities such as insurance coverage detection charity screening patient payments and unified payment processing are essential for helping providers navigate this evolving funding landscape.

Matt Hawkins: Importantly, we believe Waystar is well insulated from downside risk across a range of scenarios. In a hypothetical analysis in which 15% of Medicaid funding were to be affected, Waystar's trailing 12-month revenue would be impacted by less than 1%. More importantly, these conditions highlight the advantage of Waystar's purpose-built platform, which is already equipped to support providers across all payer types. Whether volumes shift across Medicaid, Medicare, commercial, or self-pay, Waystar enables providers to maximize reimbursement, reduce denials, and operate efficiently. As I will describe in a moment, capabilities such as insurance coverage detection, charity screening, patient payments, and unified payment processing are essential for helping providers navigate this evolving funding landscape. Now, let's turn to the Prior Authorization Pledge led by America's health insurance plans.

Now, let's turn to the prior authorization pledge led by Americas Health insurance plans.

More than 60 health insurers recently signed a non binding commitment with the U S Department of health and human services outlining a multiyear path to reduce unnecessary prior authorization requirements by 2026 and implement standardized electronic workflows by 2027.

Speaker #3: More importantly, these conditions highlight the advantage of Waystar's purpose-built platform, which is already equipped to support providers across all payer types. Whether volumes shift across Medicaid, Medicare, commercial, or self-pay, Waystar enables providers to maximize reimbursement, reduce denials, and operate efficiently.

We note that way star has long been a market leader in prior authorization automation well ahead of this anticipated industry pledge.

Speaker #3: As I will describe in a moment, capabilities such as insurance coverage detection, charity screening, patient payments, and unified payment processing are essential for helping providers navigate this evolving funding landscape.

Our software authorization manager.

Health care providers to a broad range of payers, while off accelerate launched earlier this year automates every step of the prior authorization process and enables auto approval.

Speaker #3: Now, let's turn to the prior authorization pledge led by America's health insurance plans. More than 60 health insurers recently signed a non-binding commitment with the US Department of Health and Human Services outlining a multi-year path to reduce unnecessary prior authorization requirements by 2026 and implement standardized electronic workflows by 2027.

With more than 2 billion prior authorization submissions occurring annually. This remains one of health Care's, most burdensome and resource intensive manual processes.

Matt Hawkins: More than 60 health insurers recently signed a non-binding commitment with the US Department of Health and Human Services, outlining a multi-year path to reduce unnecessary prior authorization requirements by 2026 and implement standardized electronic workflows by 2027. We note that Waystar has long been a market leader in prior authorization automation, well ahead of this anticipated industry pledge. Our software Authorization Manager connects healthcare providers to a broad range of payers, while Auth Accelerate, launched earlier this year, automates every step of the prior authorization process and enables auto-approval. With more than 2 billion prior authorization submissions occurring annually, this remains one of healthcare's most burdensome and resource-intensive manual processes. Today, Waystar delivers more than 90% touchless authorizations. For a mid-sized health system, this level of advanced automation can unlock capacity equivalent to over a dozen full-time employees, freeing staff to focus on higher-value work.

Today, we start delivers more than 90% touchless authorizations or a mid sized health system. This level of advanced automation can unlock capacity equivalent to over a dozen full time employees green staff to focus on higher value work.

Speaker #3: We note that Waystar has long been a market leader in prior authorization automation, well ahead of this anticipated industry pledge. Our software, authorization manager, connects healthcare providers to a broad range of payers.

<unk> is encouraged to see the broader industry coalescing around initiatives that benefit providers and patients.

Speaker #3: While Off-Accelerate, launched earlier this year, automates every step of the prior authorization process and enables auto-approval. With more than $2 billion in prior authorization submissions occurring annually, this remains one of healthcare's most burdensome and resource-intensive manual processes.

<unk> will continue to lead from the front anticipating change and tackling health Care's, most complex challenges with AI powered software.

As a result waste our clients are well equipped to navigate regulatory demands unlock meaningful ROI and drive strong financial performance.

Speaker #3: Today, Waystar delivers more than 90% touchless authorizations. For a mid-size health system, this level of advanced automation can unlock capacity equivalent to over a dozen full-time employees.

We started as established deep trust with over $1 million providers reinforcing our conviction that our growth strategy is making a tangible impact. This trust is reflected in our 115% net revenue retention rate and the growing number of clients.

Speaker #3: Freeing staff to focus on higher-value work. Waystar's encouraged to see the broader industry coalescing around initiatives that benefit providers and patients. And Waystar will continue to lead from the front, anticipating change and tackling healthcare's most complex challenges with AI-powered software.

Matt Hawkins: Waystar is encouraged to see the broader industry coalescing around initiatives that benefit providers and patients. Waystar will continue to lead from the front, anticipating change and tackling healthcare's most complex challenges with AI-powered software. As a result, Waystar clients are well equipped to navigate regulatory demands, unlock meaningful ROI, and drive strong financial performance. Waystar has established deep trust with over 1 million providers, reinforcing our conviction that our growth strategy is making a tangible impact. This trust is reflected in our 115% net revenue retention rate and the growing number of clients generating more than $100,000 in trailing 12-month revenue, now at $1,268, which is a 14% increase year over year. Our compounding growth algorithm begins with the enduring relationships we create with our clients. Waystar is a proven innovator, delivering software that empowers providers to get paid fully and faster with unprecedented automation and greater accuracy.

<unk> generating more than $100000 in trailing 12 month revenue now at 1268, which is a 14% increase year over year.

Our compounding growth algorithm begins with the enduring relationships, we create with our clients.

Speaker #3: As a result, Waystar clients are well-equipped to navigate regulatory demands, unlock meaningful ROI, and drive strong financial performance. Waystar has established deep trust with over 1 million providers, reinforcing our conviction that our growth strategy is making a tangible impact.

<unk> is a proven innovator delivering software that empowers providers to get paid fully in faster with unprecedented automation and greater accuracy.

Each innovation is purpose built to address healthcare's most complex challenges, let me highlight a few now.

Speaker #3: This trust is reflected in our 115% net revenue retention rate, and the growing number of clients generating more than $100,000 in trailing 12-month revenue.

First insurance coverage and eligibility.

As shifting coverage policies introduced more complexity and increased gaps and insurance eligibility provider space, a rising risk of denied or delayed payments.

Speaker #3: Now, at $1,268, which is a 14% increase year over year. Our compounding growth algorithm begins with the enduring relationships we create with our clients.

Wasters AI powered software platform delivers unmatched performance and resolving inaccurate or unknown coverage automatically identifying the correct insurance and as many as 55% of cases that would otherwise result in a write offs. The result revenue is recovered in seconds.

Speaker #3: Waystar is a proven innovator, delivering software that empowers providers to get paid fully and faster, with unprecedented automation and greater accuracy. Each innovation is purpose-built to address healthcare's most complex challenges.

With no manual effort required from the provider.

We're a mid size health system. This can drive upwards of $20 million in incremental annual reimbursement.

Matt Hawkins: Each innovation is purpose-built to address healthcare's most complex challenges. Let me highlight a few now. First, insurance coverage and eligibility. As shifting coverage policies introduce more complexity and increase gaps in insurance eligibility, providers face a rising risk of denied or delayed payments. Waystar's AI-powered software platform delivers unmatched performance in resolving inaccurate or unknown coverage, automatically identifying the correct insurance in as many as 55% of cases that would otherwise result in write-offs. The result? Revenue is recovered in seconds, with no manual effort required from the provider. For a mid-sized health system, this can drive upwards of $20 million in incremental annual reimbursement. Second, patient payment optimization. As more financial responsibility shifts to patients, providers face growing pressure to improve affordability, streamline collections, and deliver a positive patient experience.

Speaker #3: Let me highlight a few points now. First, insurance coverage and eligibility. As shifting coverage policies introduce more complexity and increased gaps in insurance eligibility, providers face a rising risk of denied or delayed payments.

Second patient payment optimization as more financial responsibility shifts to patients providers.

Provider states growing pressure to improve affordability.

Remind collections and deliver a positive patient experience.

Speaker #3: Waystar's AI-powered software platform delivers unmatched performance in resolving inaccurate or unknown coverage, automatically identifying the correct insurance in as many as 55% of cases that would otherwise result in write-offs.

<unk> AI powered software platform automatically identify its financial assistance eligibility and pairs it with intuitive digital first billing and integrated patient payment options.

This approach drives up to 80% patient self service adoption and more than a 20% lift in patient collections translating to nearly $8 million in annual impact for a midsize health system, while significantly reducing the effort required to collect.

Speaker #3: The result? Revenue is recovered in seconds, with no manual effort required from the provider. For a mid-size health system, this can drive upwards of $20 million in incremental annual reimbursement.

Speaker #3: Second, patient payment optimization. As more financial responsibility shifts to patients, providers face growing pressure to improve affordability, streamline collections, and deliver a positive patient experience.

Importantly, a strong patient payment experience builds trust between the provider and patient at a critical point in the patient journey, reflecting in patient net promoter scores above 64 health care providers using waste our software platform.

Speaker #3: Waystar's AI-powered software platform automatically identifies financial assistance eligibility and pairs it with intuitive, digital-first billing and integrated patient payment options. This approach drives up to 80% patient self-service adoption and more than a 20% lift in patient collections, translating to nearly $8 million in annual impact for a mid-size health system.

Matt Hawkins: Waystar's AI-powered software platform automatically identifies financial assistance eligibility and pairs it with intuitive digital-first billing and integrated patient payment options. This approach drives up to 80% patient self-service adoption and more than a 20% lift in patient collections, translating to nearly $8 million in annual impact for a mid-sized health system, while significantly reducing the effort required to collect. Importantly, a strong patient payment experience builds trust between the provider and patient at a critical point in the patient journey, reflecting in patient net promoter scores above 60 for healthcare providers using Waystar's software platform. Third, reimbursement and cash flow. In the first half of 2025, Waystar's AI-powered software platform prevented nearly $6 billion in denied claims. When denials do occur, our appeal capabilities accelerate recovery and increase overturn rates, unlocking millions in reimbursement.

Third reimbursement and cash flow in the first half of 2025 wasters AI powered software platform prevented nearly $6 billion and denied claims when denials do occur our appeal capabilities accelerate recovery and increase overturn rates unlocking.

Millions and reimbursement clients also reduced days to pay by up to 15% strengthening cash flow and operational resilience.

Speaker #3: While significantly reducing the effort required to collect, a strong patient payment experience builds trust between the provider and patient at a critical point in the patient journey. This is reflected in patient Net Promoter Scores above 60 for healthcare providers using the Waystar software platform.

AI is at the center of Wasters innovation strategy today. The vast majority of revenue is generated from software where AI is actively driving results. We're also generating new incremental revenue with the launch of waste our altitude AI, which deploys <unk>.

Speaker #3: Third, reimbursement and cash flow. In the first half of 2025, Waystar's AI-powered software platform prevented nearly $6 billion in denied claims. When denials do occur, our appeal capabilities accelerate recovery and increase overturn rates, unlocking millions in reimbursement.

<unk> AI in key use cases on <unk> platform.

Waste our altitude AI delivers tangible outcomes, such as a 70% boost in appeal productivity and double digit increases in overturn rates.

Up capacity equivalent to nearly 10 full time employees for a mid sized health system innovations like these are delivering meaningful ROI and strengthening wasters leadership and improving provider financial performance.

Speaker #3: Clients also reduced days to pay by up to 15%, strengthening cash flow and operational resilience. AI is at the center of Waystar's innovation strategy.

Matt Hawkins: Clients also reduced days to pay by up to 15%, strengthening cash flow and operational resilience. AI is at the center of Waystar's innovation strategy. Today, the vast majority of revenue is generated from software where AI is actively driving results. We are also generating new incremental revenue with the launch of Waystar Altitude AI, which deploys generative AI in key use cases on Waystar's platform. Waystar Altitude AI delivers tangible outcomes such as a 70% boost in appeal productivity and double-digit increases in overturn rates, freeing up capacity equivalent to nearly 10 full-time employees for a mid-sized health system. Innovations like these are delivering meaningful ROI and strengthening Waystar's leadership in improving provider financial performance. A recent Forrester study of more than 300 provider leaders confirmed that trusted vendors like Waystar are preferred for AI adoption in contrast to new market entrants.

A recent Forrester study of more than 300 provider leaders confirmed that trusted vendors like waste are our preferred for AI adoption in contrast to new market entrants.

Speaker #3: Today, the vast majority of revenue is generated from software where AI is actively driving results. We are also generating new incremental revenue with the launch of Waystar Altitude AI.

Revenue cycle leaders cited scale integration and outcomes as top priorities areas, where waster has demonstrated clear leadership in all three categories.

Speaker #3: Which deploys generative AI in key use cases on Waystar's platform. Waystar Altitude AI delivers tangible outcomes such as a 70% boost in appeal productivity and double-digit increases in overturn rates.

<unk> growth strategy is grounded and proven results impactful innovation and enduring client trust as the industry evolves waster is uniquely positioned to lead with a unified AI powered software platform that delivers automation accuracy and meaningful results at scale.

Speaker #3: Freeing up capacity equivalent to nearly 10 full-time employees for a mid-size health system, innovations like these are delivering meaningful ROI and strengthening Waystar's leadership in improving provider financial performance.

Look forward to advancing our software product road map and helping providers strengthened financial performance and stay ahead in an increasingly complex environment.

Speaker #3: A recent Forrester study of more than 300 provider leaders confirmed that trusted vendors like Waystar are preferred for AI adoption, in contrast to new market entrants.

<unk> is proud of the continued recognition of its software platform culture and the results we delivered to providers and patients in Q2 <unk> was recognized as the best overall healthcare payments solution provider by Med Tech breakthrough and named one of the U S News.

Speaker #3: Revenue cycle leaders cited scale integration and outcomes as top priorities, areas where Waystar has demonstrated clear leadership in all three categories. Waystar's growth strategy is grounded in proven results, impactful innovation, and enduring client trust.

Matt Hawkins: Revenue cycle leaders cited scale, integration, and outcomes as top priorities, areas where Waystar has demonstrated clear leadership in all three categories. Waystar's growth strategy is grounded in proven results, impactful innovation, and enduring client trust. As the industry evolves, Waystar is uniquely positioned to lead with a unified AI-powered software platform that delivers automation, accuracy, and meaningful results at scale. We look forward to advancing our software product roadmap and helping providers strengthen financial performance and stay ahead in an increasingly complex environment. Waystar is proud of the continued recognition of its software platform, culture, and the results we deliver to providers and patients. In Q2, Waystar was recognized as the best overall healthcare payments solution provider by MedTech Breakthrough and named one of the US News' best companies to work for. These accolades reflect the unwavering commitment of the Waystar team and our clients to simplify healthcare payments.

Companies to work for these accolades reflect the unwavering commitment of the waste our team and our clients to simplify health care payments waste.

Speaker #3: As the industry evolves, Waystar is uniquely positioned to lead with a unified AI-powered software platform that delivers automation, accuracy, and meaningful results at scale.

<unk> is well governed by a strong experienced board of directors in Q2, two new independent Board members, Ashish Gupta, and Mike Roman joined bringing valuable expertise and perspective that are already contributing meaningfully to waste starts long term strategy.

Speaker #3: We look forward to advancing our software product roadmap and helping providers strengthen financial performance and stay ahead in an increasingly complex environment. Waystar is proud of the continued recognition of its software platform, culture, and the results we deliver to providers and patients.

With that I'll turn it over to Steve to walk through the financial details from the quarter.

Thanks, Matt.

Revenue increased 15% year over year in the second quarter to $271 million.

Speaker #3: In Q2, Waystar was recognized as the best overall healthcare payments solution provider by MedTech Breakthrough, and named one of the US News best companies to work for.

The basis of Q2 growth continues to be our durable predictable model that produces low double digit revenue growth annually on a normalized basis.

Speaker #3: These accolades reflect the unwavering commitment of the Waystar team and our clients to simplify healthcare payments. Waystar is well governed by a strong, experienced board of directors.

This includes expanding the client base producing more than $100000 of revenue in the last 12 months to 1268 at quarter end.

Matt Hawkins: Waystar is well governed by a strong experienced board of directors. In Q2, two new independent board members, Ashima Gupta and Mike Roman, joined, bringing valuable expertise and perspective that are already contributing meaningfully to Waystar's long-term strategy. With that, I'll turn it over to Steve to walk through the financial details from the quarter.

Speaker #3: In Q2, two new independent board members, Ashima Gupta and Mike Roman, joined. Bringing valuable expertise and perspective that are already contributing meaningfully to Waystar's long-term strategy.

An increase of 24 clients in the quarter and an increase of 14% year over year.

It also includes a high net revenue retention rate, which was 115% for the last 12 months and compares to 17% year over year growth over the last 12 months.

Speaker #3: With that, I'll it over to Steve to walk through the financial details from the quarter.

Speaker #4: Thanks, Matt. Revenue increased 15% year over year in the second quarter to $271 million. The basis of Q2 growth continues to be our durable, predictable model that produces low double-digit revenue growth annually on a normalized basis.

As discussed on our last call. The net revenue retention rate benefits from the rapid time to revenue from clients impacted by competitor cyber event in early 2024.

Steven Oreskovich: Thanks, Matt. Revenue increased 15% year over year in the second quarter to $271 million. The basis of Q2 growth continues to be our durable, predictable model that produces low double-digit revenue growth annually on a normalized basis. This includes expanding the client base, producing more than $100,000 of revenue in the last 12 months to $1,268 at quarter end, an increase of 24 clients in the quarter, and an increase of 14% year over year. It also includes a high net revenue retention rate, which was 115% for the last 12 months and compares to 17% year-over-year growth over the last 12 months. As discussed on our last call, the net revenue retention rate benefits from the rapid time to revenue from clients impacted by a competitor cyber event in early 2024 and elevated patient utilization of the healthcare system over the past year.

And elevated patient utilization.

The health care system over the past year.

Speaker #4: This includes expanding the client base, producing more than $100,000 of revenue in the last 12 months to $1,268 a quarter end. An increase of 24 clients in the quarter and an increase of 14% year over year.

The other components of the bridge from gross to net revenue retention are consistent with prior quarters.

Subscription revenue of $131 million increased 17% year over year and 5% sequentially.

Speaker #4: It also includes a high net revenue retention rate, which was 115% for the last 12 months, and compares to 17% year-over-year growth over the last 12 months.

Reflecting strong performance in the business.

Volume based revenue of $138 million increased 14% year over year and 6% sequentially.

Speaker #4: As discussed on our last call, the net revenue retention rate benefits from the rapid time to revenue from clients impacted by competitor cyber events in early 2024.

Volume based revenue benefited from rapid time to revenue from a few large clients that we took live in the quarter.

These three implementations highlight our ability to rapidly onboard large clients.

Speaker #4: And elevated patient utilization of the healthcare system over the past year. The other components of the bridge from growth to net revenue retention are consistent with prior quarters.

Adjusted EBITDA of $113 million for the second quarter increased 20% year over year.

Steven Oreskovich: The other components of the bridge from growth to net revenue retention are consistent with prior quarters. Subscription revenue of $131 million increased 17% year over year and 5% sequentially, reflecting strong performance in the business. Volume-based revenue of $138 million increased 14% year over year and 6% sequentially. Volume-based revenue benefited from rapid time to revenue from a few large clients that we took live in the quarter. These three implementations highlight our ability to rapidly onboard large clients. Adjusted EBITDA of $113 million for the second quarter increased 20% year over year. Our adjusted EBITDA margin was 42%, above our long-term target of approximately 40%. The adjusted EBITDA outperformance was driven by both the revenue upside as well as a slight revenue mix shift to higher margin provider solutions, which comprise approximately 70% of the total revenue.

Our adjusted EBITDA margin was 42% above our long term target of approximately 40%.

Speaker #4: Subscription revenue of $131 million increased 17% year over year and 5% sequentially, reflecting strong performance in the business. Volume-based revenue of $138 million increased 14% year over year and 6% sequentially.

The adjusted EBITDA outperformance was driven by both the revenue upside as well as a slight revenue mix shift to higher margin provider solutions, which comprise approximately 70% of the total revenue.

Additionally, we realized benefits from operational efficiency initiatives.

Speaker #4: Volume-based revenue benefited from rapid time to revenue from a few large clients that we took live in the quarter. These three implementations highlight our ability to rapidly onboard large clients.

At the same time investing in areas, such as innovation cyber security and client experience.

Unlevered free cash flow was $111 million in the second quarter of 2025.

Speaker #4: Adjusted EBITDA of $113 million for the second quarter increased 20% year over year. Our adjusted EBITDA margin was 42%, above our long-term target of approximately 40%.

With an unlevered free cash flow to adjusted EBITDA conversion ratio of 98%.

The ratio this quarter benefits from the appropriate delay a federal tax payments to the fourth quarter.

Speaker #4: The adjusted EBITDA outperformance was driven by both the revenue upside, as well as a slight revenue mix shift to higher-margin provider solutions, which comprise approximately 70% of the total revenue.

The strong first half puts us in a good position to achieve our 70% long term target for the year.

The trend of high cash flow conversion, coupled with expansion of our trailing 12 month adjusted EBITDA generated of two two times net debt to adjusted EBITDA leverage ratio at June 30th.

Speaker #4: Additionally, we realized benefits from operational efficiency initiatives while at the same time investing in areas such as innovation, cybersecurity, and client experience. Unlevered free cash flow was $111 million in the second quarter 2025 with an unlevered free cash flow to adjusted EBITDA conversion ratio of 98%.

Steven Oreskovich: Additionally, we realized benefits from operational efficiency initiatives, while at the same time investing in areas such as innovation, cybersecurity, and client experience. Unleveraged free cash flow was $111 million in the second quarter of 2025, with an unleveraged free cash flow to adjusted EBITDA conversion ratio of 98%. The ratio this quarter benefits from the appropriate delay of federal tax payments to the fourth quarter. The strong first half puts us in a good position to achieve our 70% long-term target for the year. The trend of high cash flow conversion, coupled with expansion of our trailing 12-month adjusted EBITDA, generated a 2.2 times net debt to adjusted EBITDA leverage ratio at June 30th, which is down 0.6 times since the beginning of the year. Our continued ability to delever this quarter aligns with our previously stated goal of approximately one turn annually.

Which is down six times since the beginning of the year.

Our continued ability to delever this quarter aligns with our previously stated goal of approximately one turn annually.

Regarding 2025 full year guidance. Please note the following excludes any potential impact from the pending acquisition of iodine.

Speaker #4: The ratio this quarter benefits from the appropriate delay of federal tax payments to the fourth quarter. The strong first half puts us in a good position to achieve our 70% long-term target for the year.

We are raising revenue guidance for 2025 to a range of $1 billion $30 million to $1 billion $42 million with a midpoint of $1 billion $36 million, which represents an increase of $22 million or 2% versus prior guidance mid.

Speaker #4: The trend of high cash flow conversion coupled with expansion of our trailing 12-month adjusted EBITDA generated a $2.2 times net debt to adjusted EBITDA leverage ratio at June 30th.

Point.

And represents 10% year over year growth.

Speaker #4: Which is down 0.6 times since the beginning of the year. Our continued ability to delever this quarter aligns with our previously stated goal of approximately one turn annually.

We've included a slide in the IR presentation reconciling the expected, 2025% revenue growth rate of 10% at the midpoint of guidance.

And a normalized revenue growth rate of 12%.

Speaker #4: Regarding 2025 full-year guidance, please note the following excludes any potential impact from the pending acquisition of Iodine. We are raising revenue guidance for 2025 to a range of $1 billion 30 million to $1 billion 42 million with a midpoint of $1 billion 36 million which represents an increase of $22 million or 2% versus prior guidance midpoint.

Steven Oreskovich: Regarding 2025 full-year guidance, please note the following excludes any potential impact from the pending acquisition of Iodine. We are raising revenue guidance for 2025 to a range of $1,030 million to $1,042 million, with a midpoint of $1,036 million, which represents an increase of $22 million, or 2% versus prior guidance midpoint, and represents 10% year-over-year growth. We've included a slide in the IR presentation reconciling the expected 2025 revenue growth rate of 10% at the midpoint of guidance and a normalized revenue growth rate of 12%, which is adjusted for revenue realized in 2024 that would have occurred in 2025 under typical timelines. On previous calls, we've talked about the first half, second half dynamic of our business.

Which is adjusted for revenue realized in 2024.

Would have occurred in 2025 under typical timelines.

On previous calls we've talked about the first half second half dynamic of our business.

As expected our first half revenue was over 50% of projected full year guidance, primarily based on the shaping of volume based revenue.

Including seasonality and the approximate 30% of total revenue generated by patient payment solutions.

Speaker #4: And this represents 10% year-over-year growth. We've included a slide in the IR presentation reconciling the expected 2025 revenue growth rate of 10% at the midpoint of guidance and a normalized revenue growth rate of 12%.

As a reminder, revenue dollars tend to be higher in the first half of the year compared to the second half as patients with high deductible plans.

As deductibles reset annually and.

And typically meet those deductibles in the latter portion of the year.

Speaker #4: Which is adjusted for revenue realized in 2024 that would have occurred in 2025 under typical timelines. On previous calls, we've talked about the first half, second half dynamic of our business.

Altogether, we expect total revenue to be down sequentially in Q3 as compared to Q2.

And on an absolute dollar basis.

Currently expect Q3, and Q4 revenue to be similar.

Speaker #4: As expected, our first half revenue was over 50% of projected full-year guidance primarily based on the shaping of volume-based revenue including seasonality in the approximate 30% of total revenue generated by patient payment solutions.

Steven Oreskovich: As expected, our first half revenue was over 50% of projected full-year guidance, primarily based on the shaping of volume-based revenue, including seasonality in the approximate 30% of total revenue generated by patient payment solutions. As a reminder, revenue dollars tend to be higher in the first half of the year compared to the second half, as patients with high deductible plans see those deductibles reset annually and typically meet those deductibles in the latter portion of the year. Altogether, we expect total revenue to be down sequentially in Q3 as compared to Q2, and on an absolute dollar basis, we currently expect Q3 and Q4 revenue to be similar. We are also raising adjusted EBITDA guidance to a range of $418 million to $426 million, with a midpoint of $422 million increasing by $12 million, or 3% versus the prior guidance midpoint.

We are also raising adjusted EBITDA guidance to a range of $418 million to $426 million.

With a midpoint of $422 million.

Increasing by $12 million or 3% versus the prior guidance midpoint.

Speaker #4: As a reminder, revenue dollars tend to be higher in first half of the year compared to the second half as patients with high deductible plans see those deductibles reset annually and typically meet those deductibles in the latter portion of the year.

We now expect an adjusted EBITDA margin of approximately 41% for 2025.

Driven in part by the outperformance in the first half of the year.

Again.

Speaker #4: Altogether, we expect total revenue to be down sequentially in Q3 as compared to Q2. On an absolute dollar basis, we currently expect Q3 and Q4 revenue to be similar.

Our updated guidance excludes the impact of the pending acquisition of iodine.

As we mentioned on the call last week on a standalone basis, iodine expects approximately $120 million to $125 million of subscription based revenue for 2025.

Speaker #4: We are also raising adjusted EBITDA guidance to a range of $418 million to $426 million, with a midpoint of $422 million, increasing by $12 million, or 3%, versus the prior guidance midpoint.

At a gross margin of approximately 75% and an adjusted EBITDA margin of approximately 40%.

Additionally, we expect to realize over $15 million of cost synergies within two years of closing the acquisition.

Speaker #4: We now expect an adjusted EBITDA margin of approximately 41% for 2025, driven in part by the outperformance in the first half of the year.

Steven Oreskovich: We now expect an adjusted EBITDA margin of approximately 41% for 2025, driven in part by the outperformance in the first half of the year. Again, our updated guidance excludes the impact of the pending acquisition of Iodine. As we mentioned on the call last week, on a standalone basis, Iodine expects approximately $120 million to $125 million of subscription-based revenue for 2025 at a gross margin of approximately 75% and an adjusted EBITDA margin of approximately 40%. Additionally, we expect to realize over $15 million of cost synergies within two years of closing the acquisition. We prioritize maintaining a strong balance sheet and project net leverage to be approximately three and a half times following the transaction. For clarity, this would only include the expected trailing 12 months of adjusted EBITDA from Waystar standalone.

We prioritized maintaining a strong balance sheet and project net leverage to be approximately three five times following the transaction.

Speaker #4: Again, our updated guidance excludes the impact of the pending acquisition of Iodine. As we mentioned on the call last week, on a standalone basis, Iodine expects approximately $120 million to $125 million in subscription-based revenue for 2025.

For clarity. This would only include the expected trailing 12 months of adjusted EBITDA from waste our stand alone.

As noted earlier, we have demonstrated the ability to delever quickly through strong free cash flow and adjusted EBITDA growth and we expect to do so post close.

Speaker #4: At a gross margin of approximately 75% and an adjusted EBITDA margin of approximately 40%, we expect to realize over $15 million of cost synergies within two years of closing the acquisition.

Operator, please open the call for questions.

Thank you ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone. If your question has been answered you were seeing with yourself from the queue. Please press star one again and we ask that you. Please limit yourself to one question to give everybody a chance to participate we will pause for a moment, while we compile the Q&A roster.

Speaker #4: We prioritize maintaining a strong balance sheet and project net leverage to be approximately 3.5 times following the transaction. For clarity, this would only include the expected trailing 12 months of adjusted EBITDA from Waystar standalone.

Our first question comes from Alex All Gogo Love with Jpmorgan. Your line is open.

Hi, This is Stephanie on for Alexia, Thanks for taking the call.

Speaker #4: As noted earlier, we have demonstrated the ability to delever quickly through strong free cash flow and adjusted EBITDA growth. And we expect to do so post-close.

Steven Oreskovich: As noted earlier, we have demonstrated the ability to delever quickly through strong free cash flow and adjusted EBITDA growth, and we expect to do so post-close. Operator, please open the call for closing.

Hum.

<unk> <unk> 25, you maintained 10 million revenue boost coming from client migration Shanghai overtime has there been any benefit in Q1 now.

Speaker #4: Operator, please open the call for questions.

And are we that Tim just no business decision, making.

Speaker #3: Thank you, ladies and gentlemen. If you have a estion or a comment at this time, please, for a *11 on your telephone, if your question has been answered or you wish to move ourself from the queue, please, for a *11 again, and we ask that you please limit yourself to one question to give everybody the chance to participate.

Operator: Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press *11 on your telephone. If your question has been answered or you wish to move yourself from the queue, please press *11 again. And we ask that you please limit yourself to one question to give everybody the chance to participate. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Alex L. Gogerlove with JP Morgan. Your line is open.

Jim.

Yes. Thanks for the question Doug This is Steve.

As we had mentioned on our prior earnings call. We had expected by the time, we hit Q2 of 2025 that year over year benefit when essentially.

Speaker #3: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Alex Al-Gogolov with JP Morgan. Your line is open.

<unk>.

Such that it doesn't have a significant difference between the as reported growth rate and the normalized growth rate and we did see that come to fruition here in the second quarter. So there isn't anything notable to call out and Thats why you Didnt mentioned anything in the prepared remarks.

Speaker #5: Hi, this is Destiny Long for Lexi. Thanks for taking the call. In Q2, you mentioned a $10 million revenue boost coming from client migration.

Destiny Orm: Hi, this is Destiny Orm for Alexi. Thanks for taking the call. In 1Q25, you mentioned a 10 million revenue boost coming from client migration post-chain cyber attack. Has there been any benefit in 2Q, or it's now completely over, and are we back to intentional business decision-making? Thank you.

Yes, and destiny, what I would add this is Matt.

In the original cohort of those that did.

Speaker #5: Post-Chain Cyber Attack, has there been any benefit in Q2 or it's now completely over and are we back to intentional business decision-making? Thank you.

Adopt away Star software platform, we've seen excellent retention.

And continued progress in the cross sell opportunities there.

Speaker #6: Yeah, thanks for the question, Destiny. This is Steve. As we mentioned on our prior earnings call, we expected that by the time we hit Q2 of 2025, the year-over-year benefit would essentially have lapsed such that it doesn't have a significant difference between the as-reported growth rate and the normalized growth rate.

Steven Oreskovich: Yeah, thanks for the question, Destiny. This is Steve. As we had mentioned on our prior earnings call, we had expected by the time we hit Q2 of 2025 that year-over-year benefit would essentially have lapped such that it doesn't have a significant difference between the as-reported growth rate and the normalized growth rate. And we did see that come to fruition here in the second quarter. So there isn't anything notable to call out, and that's why you didn't see me mention anything in the prepared remarks.

<unk>.

We're not calling it out doesn't mean that we're not seeing a tremendous progress. We just are choosing to be solid given the competitive nature of what we're doing I will say that it represents a tremendous opportunity for way start to continue to execute our play and we do see just given the level of unrest in that client base, we see.

Speaker #6: And we did see that come to fruition here in the second quarter. So there isn't anything notable to call out, and that's why you didn't see me mention anything in the prepared remarks.

Continued switching on the horizon.

One recent survey suggested that more than 36% of respondents are likely to switch clearinghouse vendors and that.

Speaker #3: Yeah, and Destiny, what I would add, this is Matt, in the original cohort of those that did, adopt the Waystar software platform, we've seen excellent retention.

Matt Hawkins: Yeah, and Destiny, what I would add, this is Matt. In the original cohort of those that did adopt the Waystar software platform, we've seen excellent retention and continued progress in the cross-sell opportunities there. And not calling it out doesn't mean that we're not seeing tremendous progress. We just are choosing to be silent given the competitive nature of what we're doing. I will say that it represents a tremendous opportunity for Waystar to continue to execute our play. And we do see, just given the level of unrest in that client base, we see continued switching on the horizon. We note one recent survey suggested that more than 36% of respondents are likely to switch clearinghouse vendors, and that some of those changed clients that had not switched represented nearly a third of the respondents.

Some of those change clients that have not switched represented nearly a third of the respondents and so we feel like waste Theres, a great home a trusted vendor with strong net promoter scores amongst that cohort that we've already helped and certainly more broadly across our whole client base, but we look forward to being.

Speaker #3: And continued progress in in the cross-sell opportunities there. And, not not calling it out doesn't mean that we're not seeing a tremendous, progress. We just are choosing to be silent given the competitive nature of what we're doing.

Been a share gainer during this period of time as we continue to execute our play.

Speaker #3: I will say that it's it represents a tremendous opportunity for Waystar to continue to execute our play. And we do see, just given the level of unrest in that client base, we see continued switching on the horizon.

Thank you.

One moment for our next question.

Our next question comes from Adam Hotchkiss with Goldman Sachs. Your line is open.

Great. Thanks, so much for taking the question I just wanted to touch on the rapid Onboarding of large clients you mentioned.

Speaker #3: we note one recent survey suggested that more than 36% of respondents are likely to switch clearinghouse vendors. And that, some of those change clients that had not switched represented nearly a third of the respondents.

Is there any reason that some of the volume based revenue that was brought on from those clients wouldn't be recurring in the second half of the year I just note that because I think the guidance implies.

A greater step down in second half revenue than I think we are used to and so I'm just trying to understand the outperformance in the second quarter and why we wouldn't expect that to flow through to the second half and I guess, how you think about.

Speaker #3: And so, you know, we feel like Waystar's a great home, a trusted vendor with strong net promoter scores amongst that cohort that we've already helped.

Matt Hawkins: And so, you know, we feel like Waystar is a great home, a trusted vendor with strong net promoter scores amongst that cohort that we've already helped, and certainly more broadly across our whole client base. But we look forward to being a shared gainer during this period of time as we continue to execute our play.

Speaker #3: And certainly, more broadly across our whole client base. But we look forward to being a share gainer during this period of time as we continue to execute our plan.

The upside risk to the second half Crown those dynamics plus the volume base side. Thanks, so much. Thanks.

Thanks, Adam let me speak to our ability to rapidly onboard clients first of all as you'll recall, we're a cloud based software platform and we can deploy our software very rapidly, especially enrollments, where like we saw with the change cohort of impacted clients, where they needed it but also in opportunities where.

Speaker #5: Thank ou.

Destiny Orm: Thank you.

Speaker #7: One moment for our next question. Our next question comes from Adam Hotchkiss with Goldman Sachs. Your line is open.

Operator: One moment for our next question. Our next question comes from Adam Hotchkiss with Goldman Sachs. Your line is open.

Speaker #8: Great. Thanks so much for taking the estion. I just wanted to touch on the rapid onboarding of large clients you mentioned. Is there any reason that some of the volume-based revenue that was brought on from those clients wouldn't be recurring in the second half of the year?

Adam Hotchkiss: Great. Thanks so much for taking the question. I just wanted to touch on the rapid onboarding of large clients you mentioned. Is there any reason that some of the volume-based revenue that was brought on from those clients wouldn't be recurring in the second half of the year? I just note that because I think the guidance implies a greater step down in second half revenue than I think we're used to. And so I'm just trying to understand the outperformance in the second quarter and why we wouldn't expect that to flow through to the second half, and I guess how you think about the upside risk to the second half around those dynamics plus the volume-based side. Thanks so much.

Sure.

Clients make a decision and they just want to move fast we have a lot of experience in our software is architected and certainly configurable in ways that make it easy to deploy rapidly we were thrilled to be able to work with these three clients to rapidly onboard them and that as you noted did impact our.

Speaker #8: I just note that because I think the guidance implies a greater step down in second half revenue than I think we're used to. And so I'm just trying to understand the outperformance in the second quarter and why we wouldn't expect that to flow through to the second half and, I guess, how you think about the upside risk to the second half around those dynamics plus the volume-based side?

Second quarter revenue results, Steve Let me, let me turn it to you for thinking through the second part of his question yes.

Speaker #8: Thanks so much.

Speaker #3: Thanks, Adam. Let me speak to our ability to rapidly onboard clients, first of all. As you'll all see, we're a cloud-based software platform, and we can deploy our software very rapidly.

Matt Hawkins: Thanks, Adam. Let me speak to our ability to rapidly onboard clients, first of all. As you'll recall, we're a cloud-based software platform, and we can deploy our software very rapidly, especially in moments where, like we saw with the change cohort of impacted clients where they needed it, but also in opportunities where clients make a decision and they just want to move fast. We have a lot of experience, and our software is architected and certainly configurable in ways that make it easy to deploy rapidly. We were thrilled to be able to work with these three clients to rapidly onboard them, and that, as you noted, did impact our second quarter revenue results. Steve, let me turn it to you for thinking through the second part of his question.

First just for some context specific to the second quarter Adam.

From a benefit perspective as it pertains to year over year growth rate, if I round up it's about 2% of that year over year growth rate to your question regarding the recurring nature of that we would expect it to be highly recurring as you are well aware, we have a construct with our contracts such that roughly half.

Speaker #3: Especially in moments where, like we saw with the change cohort of impacted clients where they needed it. But also in opportunities where clients make a decision and they just want to move fast.

Speaker #3: We have a lot of experience, and our software is architected and certainly configurable in ways that make it easy to deploy rapidly. We were thrilled to be able to work with these three clients to rapidly onboard them.

The revenue that we generate comes true subscription software revenue with the other piece volume the other approximately 50% volume base and the timing, especially with larger clients of when a subscription base as that kicks in tends to be a.

Speaker #3: And that, as you noted, did impact our second quarter revenue results. Steve, let me turn it you for thinking through the second part of his question.

Little a few months or several months post.

Speaker #6: Yeah, first, just for some context specific to the second quarter. Adam, you know from a benefit perspective as it pertains to year-over-year growth rate, if I round up, it's about 2%.

Steven Oreskovich: Yeah, first, just for some context specific to the second quarter, Adam, you know, from a benefit perspective, as it pertains to year-over-year growth rate, if I round up, it's about 2% of that year-over-year growth rate. To your question regarding the recurring nature of that, we would expect it to be highly recurring. As you're well aware, we have a construct with our contracts such that roughly half of the revenue that we generate comes through subscription software revenue, with the other piece approximately 50% volume-based. And the timing, especially with larger clients, of when the subscription-based aspect kicks in tends to be a little a few months or several months post-signing of the contract based upon the expected rollout. So that revenue is illustrating itself and showing up this quarter in volume-based as a result of the fact that it's outperforming the contractual monthly minimums.

Signing of the contract based upon the expected rollout. So that revenue is illustrating itself and showing up this quarter in volume base as a result of the fact that it's.

Are performing.

Speaker #6: Of that year-over-year growth rate, to your question regarding the recurring nature, we would expect it to be highly recurring. As you're well aware, we have a construct with our contracts such that roughly half of the revenue that we generate comes through subscription software revenue, with the other piece being approximately 50% volume-based.

The contractual monthly minimums, and we would fully expect as we get further along in the contract.

Lifecycle with those three clients and that will then show up as subscription revenue at that point in time based.

Based upon the fact of where where they are contractually versus the expectations. So we expect that to be in the recurring and in the future.

Speaker #6: And the timing, especially with larger clients, of when the subscription-based aspect kicks in tends to be a little a few months or several months post-signing of the contract.

Revenue stream for quite the foreseeable future specific.

Specific to your question surrounding <unk>.

H versus one each in sort of the expectation of the back half being.

Speaker #6: Based on the expected rollout. So that revenue is illustrating itself and showing up this quarter in volume-based as a result of the fact that it's outperforming the contractual monthly minimums.

Sub 50% of the total year revenue that is more a factor of two items first and 30% of revenue that comes from patient payments. Please.

Please recall in <unk>.

Speaker #6: And we would fully expect that as we get further along in the contract lifecycle with those three clients, that will then show up as subscription revenue at that point in time, based upon where they are contractually versus the expectations.

Mentioned in the prepared remarks the impact of.

Steven Oreskovich: And we would fully expect, as we get further along in the contract lifecycle with those three clients, that that will then show up as subscription revenue at that point in time, based upon the fact of where they are contractually versus the expectation. So we expect that to be in the recurring and in the future revenue stream for quite the foreseeable future. Specific to your question surrounding 2H versus 1H and sort of the expectation of the back half being sub-50% of the total year revenue, that is more a factor of two items. First, the 30% of revenue that comes from patient payments. Please recall and mention in the prepared remarks the impact of patient deductibles and how they tend to impact the first half and second half of the year.

Ah patient deductibles and how they tend to impact the first half and second half of the year and then as it pertains to our approach to expectations from the volume based revenue stream.

Speaker #6: So we expect that to be in the recurring and in the future revenue stream for quite the foreseeable future. Specific to your question surrounding 2H versus 1H and sort of the expectation the back half being sub-50% of the total year revenue, that is more a factor of two items.

In patient utilization, we think were appropriate in our view, but if.

If the patient utilization of the health care system continues to remain high.

As it has for the are higher as it has for the first couple of quarters of this year.

It could lead to the upside of the guidance range that we provided and if we were to see something happen negatively that would agree to the downside.

Speaker #6: First, the 30% of revenue that comes from patient payments, please recall, and I mentioned in the prepared remarks the impact of patient deductibles and how they tend to impact the first half and second half of the year.

Of our of our full year guidance expectation in the range. So hopefully that's helpful context Adam.

Hey, guys. Thanks, so much.

Speaker #6: And then, as it pertains to our approach to expectations from the volume-based revenue stream and patient utilization, we think we're appropriate in our view.

One moment for our next question.

Steven Oreskovich: And then as it pertains to our approach to expectations from the volume-based revenue stream and patient utilization, we think we're appropriate in our view. But if the patient utilization of the healthcare system continues to remain high, as it has for the or higher as it has for the first couple of quarters of this year, that could lead to the upside of the guidance range that we provided. And if we were to see something happen negatively, that would lead to the downside of our full-year guidance expectation in the range. So hopefully, that's helpful context, Adam.

Our next question comes from Allen Lutz with Bank of America. Your line is open.

Good afternoon, and thanks for taking the questions one for either Matt or Steve.

Speaker #6: But if the patient utilization of the healthcare system continues to remain high, as it has for the or higher as it has for the first couple of quarters of this year, that could lead to the upside of the guidance range that we provided.

Looking at subscription revenue. This was the biggest sequential increase in subscription revenue in the past year and I guess that would be a little counterintuitive given the benefit that you observed from cypress the cyber security piece.

<unk> in 2024, so as we think about the benefit you saw in two Q more than $6 million of sequential revenue growth in subscription, what's driving that exactly and was there any type of impact from tariffs.

Speaker #6: And if we were to see something happen negatively, that would lead to the downside of our full-year guidance expectation in the range. So hopefully, that's helpful context, Adam.

Just concern from customers and then how do you think about the demand environment in the second half of the year is there any contemplation of a pullback just what drove the growth in the quarter and then how to think about two H from here. Thanks.

Speaker #8: It is. Thanks so much.

Operator: It is. Thanks so much. One moment for our next question. Our next question comes from Alan Lutz with Bank of America. Your line is open.

Speaker #7: One moment for our xt estion. Our next question comes from Alan Lutz with Bank of America. Your line is open.

Mhm.

Speaker #9: Good afternoon, and thanks for taking the questions. One for either Matt or Steve. Looking at subscription revenue, this was the biggest sequential increase in subscription revenue in the past year.

Allen Lutz: Good afternoon, and thanks for taking the questions. One for either Matt or Steve. Looking at subscription revenue, this was the biggest sequential increase in subscription revenue in the past year. And I guess that would be a little counterintuitive given the benefit that you observed from the cybersecurity piece in 2024. So as we think about the benefit you saw in 2Q, you know, more than 6 million of sequential revenue growth in subscription, what's driving that exactly? And was there any type of impact from tariffs, just concern from customers? And then how do you think about the demand environment in the second half of the year? Is there any contemplation of a pullback? Just what drove the growth in the quarter and then how to think about 2H from here? Thanks.

Well, let me speak first about the demand environment, Alan and then I'll ask Steve to comment on subscription revenue if that's okay with you.

First of all.

Speaker #9: And I guess that would be a little counterintuitive given the benefit that you observed from the cybersecurity piece in 2024. So as we think about the benefit you saw in Q2, you know more than $6 million of sequential revenue growth in subscription, what's driving that exactly?

The demand.

Environment, we see as being robust and strong and I'll tell you why.

We see provider decision makers looking for efficiency.

They are adopting technology or wanting to to help them drive efficiency and collect faster and more accurately and they want cyber secure solutions and they want to work with vendors that they can trust. So while our business has no direct exposure to tariffs as we've talked about in the past we are we're serving you.

Speaker #9: And was there any type of impact from tariffs just concerned customers? And then how do you think about the demand environment in the second half of the year?

Speaker #9: Is there any contemplation of a pullback? Just what drove the growth in the quarter and then how to think about 2H from here? Thanks.

<unk> clients only we are noticing that provider decision makers are.

Speaker #3: Well, let me speak first about the demand environment, Alan, and then I'll ask Steve to comment on subscription revenue, if that's okay with you.

Matt Hawkins: Well, let me speak first about the demand environment, Alan, and then I'll ask Steve to comment on subscription revenue if that's okay with you. First of all, you know, the demand environment we see as being robust and strong, and I'll tell you why. We see provider decision makers looking for efficiency. They are adopting technology or wanting to help them drive efficiency and collect faster and more accurately. And they want cybersecure solutions, and they want to work with vendors that they can trust. So while our business has no direct exposure to tariffs, as we've talked about in the past, we are serving US clients only. We are noticing that provider decision makers are very thoughtful, they're very diligent, and probably stressed as they prioritize areas of spend. We're really grateful that Waystar is on the favorable side of that prioritization.

They're very thoughtful theyre, very diligent and and at.

It probably stressed as they prioritize areas of spend we're really grateful that waste or is on the favorable side of that prioritization and.

Speaker #3: First of all, you ow the demand environment we see as being robust. And strong. And I'll tell you y. We see provider decision-makers looking for efficiency; they are adopting technology or wanting to help them drive efficiency and collect faster and more accurately.

Because we are a trusted platform. We are mission critical and we help providers drive efficient efficient cash flows and we standby our results. There just demonstrable return on investment results. When you look at the ways that we think about demand and how it shows up in our business.

Speaker #3: And they want cybersecure solutions, and they want to work with vendors that they can trust. So while our business has no direct exposure to tariffs, as talked about in the past, we are we're serving US clients only.

We have a strong qualified pipeline of opportunities.

That we look to the second half of 'twenty, five and into the future with excitement and a sense of momentum and we also feel good and optimistic about the year to date bookings results that we've achieved so feeling good overall about demand recognizing that it's it's stressful, but where provider decision makers tend to prioritize.

Speaker #3: We are noticing that provider decision-makers are they're very thoughtful, they're very diligent, and and and probably stressed as they prioritize areas of spend. We're really grateful that Waystar is on the favorable side of that prioritization.

Mission critical solutions Likewise Star, Steve second part of that question, Yeah. So specific to your question the islanders surrounding.

Speaker #3: And because we are a trusted platform, we are mission-critical, and we help providers drive efficient cash flows. And we stand by our results. They're just demonstrable return on investment results.

Matt Hawkins: And because we are a trusted platform, we are mission-critical, and we help providers drive efficient cash flows, and we stand by our results. They're just demonstrable return on investment results. When you look at the ways that we think about demand and how it shows up in our business, we have a strong qualified pipeline of opportunities that we look to the second half of '25 and into the future with excitement and a sense of momentum. And we also feel good and optimistic about the year-to-date bookings results that we've achieved. So feeling good overall about demand, recognizing that it's stressful, but where provider decision makers tend to prioritize mission-critical solutions like Waystar. Steve, second part of that question?

The subscription revenue and the sequential growth you are correct.

Last call I had made a statement that we hadn't expected to see.

Speaker #3: When you look at the ways that we think about demand and how it shows up in our business, we have a strong qualified pipeline of opportunities.

Meyer quarters in which the benefit of those clients we rapidly onboard it.

Through that were impacted by the change cyber event.

We had expected to see the subscription sequential growth rate.

Speaker #3: That we look to the second half of '25 and into the future with excitement and a sense of momentum. And we also feel good and optimistic about the year-to-date bookings results that we've achieved.

Start to taper off in the second quarter and through the rest of the year.

What we saw actually was.

Speaker #3: So, feeling good overall about demand. Recognizing that it's stressful, but where provider decision-makers tend to prioritize mission-critical solutions like Waystar. Steve, what’s the second part of that question?

Mix of revenue this quarter and I think on the farm.

Our prepared comments apologies I understand it the reflecting the strong performance in the business.

I think to those providers solutions that comprise.

Speaker #6: Yeah, and so specific to the question, Alan, or surrounding the subscription revenue and the sequential growth, you are correct on the last call. I had made a statement that we had expected to see prior quarters in which the benefit of those clients we rapidly onboarded through that were impacted by the change cyber event that we had expected to see the subscription sequential growth rate start to taper off in the second quarter and through the rest of the year.

Steven Oreskovich: Yeah, so specific to the question and surrounding the subscription revenue and the sequential growth, you are correct. On the last call, I had made a statement that we had expected to see prior quarters in which the benefit of those clients we rapidly onboarded through that were impacted by the change cyber event, that we had expected to see the subscription sequential growth rate start to taper off in the second quarter and through the rest of the year. What we saw actually was the mix of revenue this quarter, and I think in the prepared comments, apologies, I stated that reflecting the strong performance in the business, less specific to those provider solutions that comprise 70% of the total revenue.

70% of the total revenue if you recall.

The majority of our subscription revenue or about 70% of that 70%, which.

Our calculus through is about 50% of total revenue comes from those or is generated through those provider solutions to strengthen those and continued.

Adoption and implementation of those in the second quarter has continued to drive the subscription revenue basis and it's also just started to tie out sort of all the way through the P&L is also the piece where I mentioned.

Speaker #6: What we saw actually was the mix of revenue this quarter and I ink in the prepared comments, apologies, I had stated the reflecting the strong performance in the business.

Generate that mix shift between provider solutions revenue.

And that 70% also led to the higher margins and ultimately at a higher gross margin or sorry, the higher.

Speaker #6: Well, that's specific to those provider solutions that comprise 70% of the total revenue. If you all, the majority of our subscription revenue or about 70% of that 70%, which if you follow the calculus through, is about 50% of total revenue comes from those or is generated through those provider solutions.

Steven Oreskovich: If you recall, the majority of our subscription revenue, or about 70% of that 70%, which if you follow the calculus through, is about 50% of total revenue comes from those or is generated through those provider solutions. The strength in those and continued adoption and implementation of those in the second quarter has continued to drive the subscription revenue basis. And it's also just sort of to tie out sort of all the way through the P&L is also the piece where I had mentioned generate that mix shift between provider solutions revenue and that 70% also led to the higher margins and ultimately the higher gross margin, or sorry, the higher adjusted EBITDA margin for the second quarter as well.

Adjusted EBITDA margin for the second quarter as well.

We're very we're very pleased to see that strengthen the business continue and obviously it has.

Positive impacts for us throughout the entire P&L.

Great. Thank you very much.

Speaker #6: The strength in those and continued adoption and implementation of those in the second quarter has continued to drive the subscription revenue basis. And it's also just sort of to tie out sort of all the way through the P&L is also the piece where I had mentioned generate that mix shift between provider solutions revenue and that 70%.

One moment for our next question.

Yes.

Our next question comes from Richard close with Canaccord Genuity. Your line is open.

Yeah.

Yes, thanks for the question congratulations.

Just maybe on the volume growth again.

Even with I guess, the rapid onboarding, adding a couple percentage points in the second quarter.

Speaker #6: Also led to the higher margins and ultimately the higher gross margin or sorry, the higher adjusted EBITDA margin for the second quarter as well.

No.

The quarter was still above the 11% in the first quarter. So.

Just curious is it your sense is for a higher utilization environment or.

Speaker #6: So very, you ow, we're very pleased to see that strength in the business continue. And obviously, it has positive impacts for us throughout the entire P&L.

Steven Oreskovich: So very, you know, we're very pleased to see that strength in the business continue, and obviously, it has, you know, positive impacts for us throughout the entire P&L.

Is there any read through.

Maybe moving more clients to digital payments and getting better collection rates.

Speaker #8: Great. Thank you very much.

Allen Lutz: Great. Thank you very much.

Speaker #7: One moment for our next question. Our next question comes from Richard Close with Canicor Genuity. Your line is open.

Operator: One moment for our next question. Our next question comes from Richard Close with Candicore Jannudi. Your line is open.

I guess I'm, just curious where you stand on penetration of patient payments on the digital versus traditional methods.

Speaker #10: Yes, thanks for the question. Congratulations. I just wanted to ask about the volume growth. Even with the rapid onboarding adding a couple of percentage points in the second quarter, the quarter was still above the 11% in the first quarter.

Steven Oreskovich: Yes, thanks for the question. Congratulations. Just maybe on the volume growth, again, you know, even with, I guess, the rapid onboarding, adding a couple percentage points in the second quarter, you know, the quarter was still above the 11% in the first quarter. So I'm just curious, is it your sense it's the higher utilization environment, or you know, is there any read-through maybe moving more clients to digital payments and getting, you know, better collection rates? And I guess I'm just curious where you stand on penetration of patient payments on the digital versus traditional methods and how that's progressing.

How thats progressing.

Thanks, Richard Yes, we are.

Thrilled with obviously to deliver Q2 and this represents five consecutive quarters of double digit revenue growth strong EBITDA margin performance cash flow conversion and doing exactly basically what we say we're going to do so we're thrilled with that on the volume growth side, we are seeing strong.

Speaker #10: So I'm just curious, is it your sense it's the higher utilization environment or, you know, is there any read-through maybe moving more clients to digital payments and getting, you know, better collection rates and I ess I'm just curious where you stand on penetration of patient payments on the digital versus traditional methods and how that's progressing.

Strong utilization environment, obviously, we're prudent in how we think about the business and how we create operating plans and forecast for the business, but it's been encouraging to see.

Higher utilization and that tends to benefit the volumetric side of our business as you know.

With respect to the digital payment solutions, the digital first payment.

Solutions that we offer with the integrated patient financial care solutions that we have we were not calling that out in particular.

Speaker #3: Thanks, Richard. Yeah, we're thrilled with obviously to deliver Q2 and this represents five consecutive quarters of double-digit revenue growth, strong EBITDA margin performance, cash flow, conversion, and doing exactly basically what we say we're ing to do.

Matt Hawkins: Thanks, Richard. Yeah, we're thrilled with, obviously, to deliver Q2, and this represents five consecutive quarters of double-digit revenue growth, strong EBITDA margin performance, cash flow conversion, and doing exactly basically what we say we're going to do. So we're thrilled with that. On the volume growth side, we are seeing a strong utilization environment. Obviously, we're prudent in how we think about the business and how we create operating plans and forecasts for the business. But it's been encouraging to see, you know, higher utilization, and that tends to benefit the volumetric side of our business, as you know. With respect to the digital payment solutions, the digital-first payment solutions that we offer with the integrated patient financial care solutions that we have, we're not calling that out in particular.

We do know that those solutions are driving better collection rates, and certainly better patient satisfaction, because patients want transparency and what their financial obligations going to be and we like that.

Speaker #3: So we're thrilled with that. On the volume growth side, we are seeing strong a strong utilization environment. Obviously, we're prudent in how we think about the business and how we create operating plans and forecasts for business.

The activity that we're seeing in the business, but not necessarily calling it out and I'll pause there Steve what would you add to this volume related question, yes, as we think of.

Speaker #3: But it's been encouraging to see higher utilization, and that tends to benefit the volumetric side of our business, as you know. With respect to the digital payment solutions, the digital-first payment solutions that we offer with the integrated patient financial care solutions that we have, we're calling that out in particular.

The patient utilization of the health care system recall that roughly half of that volume based revenue is associated with provider solutions. The other half associated with the patient.

Payment solutions, so to your point about the Digitization and we're seeing.

Good mix and volume from both of those so if we looked at the second quarter the year over year growth rate I would say it probably breaks down roughly about 60 40.

Speaker #3: We do know that those solutions are driving better collection rates and certainly better patient satisfaction, because patients want transparency in what their financial obligation is going to be.

Matt Hawkins: We do know that those solutions are driving better collection rates and certainly better patient satisfaction because patients want transparency in what their financial obligation is going to be. And we like the activity that we're seeing in the business, but not necessarily calling it out. And I'll pause there, Steve. What would you add to kind of this volume-related question?

Year over year, 60% of that growth is coming through those.

Speaker #3: And we like the activity that we're seeing in the business, but not necessarily calling it out. And I'll pause there, Steve. What would you add to kind of this volume-related question?

Patient payment solutions, 40% roughly is coming from the provider solutions. So a good mix of volume increase across all of the solutions in our business and I'd say from a penetration perspective, Richard we have a long feels right in front of US right down the middle where we can just go address and become a market share.

Speaker #6: Yeah, and as we think of the patient utilization of the healthcare system, recall that roughly half of that volume-based revenue is associated with provider solutions.

Steven Oreskovich: Yeah, and as we think of the patient utilization of the healthcare system, recall that roughly half of that volume-based revenue is associated with provider solutions, the other half associated with the patient payment solutions. So to your point about the digitization, and we're seeing a good mix in volume from both of those. So if we looked at the second quarter, the year-over-year growth rate, I would say it probably breaks down roughly about 60/40 year-over-year. 60% of that growth is coming through those patient payment solutions. 40% roughly is coming from the provider solutions. So a good mix of volume increase across all of the solutions in our business.

Gainer here with the with the compelling solutions that we have to offer so a long way to run.

Speaker #6: The other half is associated with the patient payment solutions. So to your point about the digitization, and we're seeing a good mix in volume from both of those.

Alright, thank you.

One moment for our next question.

Our next question comes from George Hill with Deutsche Bank. Your line is open.

Speaker #6: So if we looked at the second quarter of the year-over-year growth rate, I would say it probably breaks down roughly about 640, year-over-year, 60% of that growth is coming to those patient payment solutions, 40% roughly is coming from the provider solutions.

Hey, good afternoon, guys I've got two quick ones. One is a layup for Matt and one is a little bit tougher one for Steve.

But Matt if you're listening to matter if you're listening to mcl earnings calls they are basically all creating a commercial for way started complaining about how the impacts of AI and revenue cycle management tools are killing their cost targets. So I guess, what I would ask is have you seen any downstream impact of that.

Speaker #6: So a good mix of volume increase across all of the solutions in ur business.

Speaker #3: Yeah, and I'd say from a penetration perspective, Richard, we have a long, ou know, field right in front of us, right down the middle where we can just go address and become a market share gainer here with a with a compelling solutions that we have to offer.

Matt Hawkins: Yeah, and I'd say from a penetration perspective, Richard, we have a long field right in front of us, right down the middle where we can just go address and become a market share gainer here with the compelling solutions that we have to offer. So a long way to run.

From a client demand perspective, and I guess is there a way to quantify.

On a year over year basis, if we think about your revenue line.

What is the benefit of kind of increased charge capture or the increase the ability to code.

Speaker #3: So a long way to run.

Speaker #8: All right, thank ou.

Steven Oreskovich: All right, thank you.

Speaker #7: One moment for our next estion. Our next question comes from George Hill with Deutsche Bank. Your line is open.

Operator: One moment for our next question. Our next question comes from George Hill with Deutsche Bank. Your line is open.

In the volume based revenue and I apologize for this one question and then for Steve.

Maybe I missed this in the detailed quite in the detailed commentary, but if I look at the subscription revenue and the volume based revenue is.

Speaker #11: Hey, good afternoon, guys. I've got two quick ones. One's a layup for Matt and one's a little bit tougher one for Steve. So Matt, if you're listening to Matt, if you're listening to MCO earnings calls, they're basically all creating a commercial for Waystar, complaining about how the impacts of AI and revenue cycle management tools are killing their cost targets.

George Hill: Hey, good afternoon, guys. I've got two quick ones. One's a layup for Matt, and one's a little bit tougher one for Steve. So Matt, if you're listening to, Matt, if you're listening to MCO earnings calls, they're basically all creating a commercial for Waystar, talk complaining about how the impacts of AI and revenue cycle management tools are killing their cost targets. So I guess what I would ask is, have you seen any downstream impact of that from a client demand perspective? And I guess, is there a way to quantify, like on a year-over-year basis, if we think about your revenue, like what is the benefit of kind of increased charge capture or the increased ability to code in the volume-based revenue? And I apologize for this being a long question.

Is the expectation that like to either the volume based revenue I'm sorry, the subscription based revenue tracks back meaningfully or the volume based revenue.

Because of the subscription revenue doesn't the volume based revenue would really have to backtrack in order to see Q3, and Q4 down meaningfully to kind of get to them.

Speaker #11: So I guess what would ask is, have you seen any downstream impact of that from a client demand perspective? And I ess, is there a way to quantify like on a year-over-year basis if we think about your revenue like what is the benefit of kind of increased charge capture or the increased ability to code in the volume-based revenue?

The guidance target.

I would just love kind of more interplay of like which revenue lines are moving in which direction and why as it relates to the guidance, which was looking pretty conservative sorry for the one question guys.

Hey, Thanks, George I'm going to take your first one I'm going to lean into it a little bit if you don't mind, just given the AI opportunity that we see.

Speaker #11: And I apologize for this being a long question. And then for Steve, maybe I missed this in the detailed commentary. But if you look at the subscription revenue and the volume-based revenue, is the expectation that either the volume-based revenue—I'm sorry, the subscription-based revenue—tracks back meaningfully, or the volume-based revenue? Because if the subscription revenue doesn't, the volume-based revenue would really have to backtrack.

We were recently ranked number one in AI platform solutions by Black book Research.

George Hill: And then for Steve, maybe I missed this in the detailed commentary, but if I look at the subscription revenue and the volume-based revenue, like is the expectation that like either the volume-based revenue, I'm sorry, the subscription-based revenue tracks back meaningfully or the volume-based revenue? Because if the subscription revenue doesn't, the volume-based revenue would really have to backtrack in order to see Q3 and Q4 down meaningfully to kind of get to the guidance targets. So I would just love kind of more interplay on like which revenue lines are moving in which direction and why as it relates to the guidance, which is looking pretty conservative. Sorry for the long question, guys.

Our clients as you know AI is pervasive across the waste our platform today. The vast majority of our revenue includes software where AI is in use today. So when we're selling and you're seeing revenue growth in our business. You can assume that there is AI embedded in the software solutions that we're delivering.

Speaker #11: In order to see Q3 and Q4 down meaningfully to kind of get to guidance targets. So I would just love kind of more interplay on like which revenue lines are moving in which direction and why as it relates to the guidance, which is looking pretty conservative.

We bring the right AI.

The right use case and.

And in the case of us launching altitude AI at the start of the year, where it has several gen. AI use cases, one of the things that we're seeing and we did listen closely to the NCL calls or are aware of what's going on in the market.

Speaker #11: Sorry for the question, guys.

Speaker #3: Hey, hey, thanks, George. I'm going to take your first one. 'm going to lean into it a little bit if you don't mind just given the AI opportunity that we see.

Matt Hawkins: Hey, hey, thanks, George. I'm going to take your first one. I'm going to lean into it a little bit, if you don't mind, just given the AI opportunity that we see. You know, we were recently ranked number one in AI platform solutions by Black Book Research. Our clients, as you know, AI is pervasive across the Waystar platform today. The vast majority of our revenue includes software where AI is in use today. So when we're selling and you're seeing revenue growth in our business, you can assume that there's AI embedded in the software solutions that we're delivering. We bring the right AI to the right use case.

We brought first to market capability around denial prevention.

Speaker #3: You know, we were recently ranked number one in AI platform solutions by BlackBook Research. Our clients, as you know, AI is pervasive across the Waystar platform today.

Cable solutions, so I think things that prevent a likelihood that a claim gets denied we're hearing that in the market a lot and people want those type of capabilities are our gen. AI solutions are preventing $6 billion of denied claims so far this year on the other side of that on the appeal.

Speaker #3: The vast majority of our revenue includes software where AI is in use today. So, when we're selling and you're seeing revenue growth in our business, you can assume that there's AI embedded in the software solutions that we're delivering.

Syed.

Sure motions to see at a 40% increase in appeal overturn rates at.

Speaker #3: We bring the right AI to the right use case. And in the case of us launching Altitude AI at the start of the year, where it has several Gen AI use cases, one of the things that we're seeing and we did listen closely to the MCO calls and we're aware of what's going on in the market.

Matt Hawkins: And in the case of us launching Altitude AI at the start of the year, where it has several Gen AI use cases, one of the things that we're seeing, and we did listen closely to the MCO calls and we're aware of what's going on in the market, we brought first-to-market capability around denial prevention solutions. So you think things that prevent a likelihood that a claim gets denied. We're hearing that in the market a lot, and people want those types of capabilities. Our Gen AI solutions are preventing $6 billion of denied claims so far this year. On the other side of that, on the appeal side, solutions to see a 40% increase in appeal overturn rates at three times a faster ability because the Gen AI is autonomously gathering financial and clinical information.

At three times or faster ability.

Because the <unk> autonomous with gathering financial and clinical information and so I'm going to lean in just for a moment. Further then I'll turn it to Steve but when you think about what is waste <unk> ultimate goal and you start to think and reflect on why iodine. We think it is a perfect strategic fit.

Speaker #3: We brought first-to-market capability around denial prevention solutions. So you ink things that prevent a likelihood that a claim gets denied. We're hearing that in the market a lot.

And part of that is really about the use of AI. So you think waster has solutions that highly accurately and rapidly and automatically identify patients and do prior authorizations and prevent denials on the other side. We also have solutions use AI to.

Speaker #3: And people want those types of capabilities. Our Gen AI solutions are preventing $6 billion in denied claims so far this year. On the other side of that, on the appeal side, solutions see a 40% increase in appeal overturn rates at three times the speed because the Gen AI is autonomously gathering financial and clinical information.

Process claims at market, leading first past claim acceptance rates and rapidly appeal denied claims and it makes perfect sense for us to go and announce the acquisition of iodine is because in that middle area between the clinical encounter and the formation of a claim and the submission of that claim.

Speaker #3: And so I'm going to lean in just for a moment further, and then I'll pass it to Steve. But when you think about what Waystar's ultimate goal is, and you start to think and reflect on why Iodine, we think it's a perfect strategic fit. Part of that is really about the use of AI.

Matt Hawkins: And so I'm going to lean in just for a moment further, and then I'll turn it to Steve. But when you think about what is Waystar's ultimate goal, and you start to think and reflect on why Iodine, we think it's a perfect strategic fit. And part of that is really about the use of AI. So you think Waystar has solutions that highly accurately and rapidly and automatically identify patients and do prior authorizations and prevent denials. On the other side, we also have solutions that use AI to process claims at market-leading first-pass claim acceptance rates and rapidly appeal denied claims.

Theres more than 60 million denied claims that occur in that area.

And so our ultimate goal is to create.

The perfect undeniable claim you can write that down our goal is to create the perfect undeniable claim using AI.

Speaker #3: So you think Waystar has solutions that highly accurately and rapidly and automatically identify patients and do prior authorizations and prevent denials. On the other side, we also have solutions that use AI to process claims at market-leading first-pass claim acceptance rates.

And we're on a mission to do just that to help providers because we're listening to their commentary and we know the pain that they're experiencing.

And we're excited about this so I'll pause to ask Steve to help us just clarify free George.

Speaker #3: And rapidly appeal denied claims. And what it makes perfect sense for us to go and announce the acquisition of Iodine is because in that middle area between the clinical encounter and the formation of a claim and the submission of that claim, there's more than $60 million denied claims that occur in that area.

Matt Hawkins: And why it makes perfect sense for us to go and announce the acquisition of Iodine is because in that middle area between the clinical encounter and the formation of a claim and the submission of that claim, there's more than 60 million denied claims that occur in that area. And so our ultimate goal is to create the perfect, undeniable claim. You can write that down. Our goal is to create the perfect, undeniable claim using AI. And we're on a mission to do just that to help providers because we're listening to their commentary, and we know the pain that they're experiencing. And we're excited about this. So I'll pause to ask Steve to help us just clarify for you, George, the subscription revenue versus the transactional or volumetric revenue and what we expect on the back half.

The subscription revenue versus the transactional or volumetric mat revenue.

And what we expect on the back half.

Yes.

Might revert a little bit back to the.

The prepared comments.

Reminding you about the first half of the year second half of the year dynamic that happens within.

Speaker #3: And so our ultimate goal is to create the perfect undeniable claim. You can write that down. Our goal is to create the perfect undeniable claim using AI.

And seasonality that happens within.

Ah patient payment solutions.

Primarily associated with patients that are under high deductible.

Healthcare plans that have those deductibles reset at the beginning of the year and are generally start to meet those deductibles in the second half of the year. So.

Speaker #3: And we're on a mission to do just that: to help providers. We're listening to their commentary, and we know the pain that they're experiencing.

Speaker #3: And we're cited about this. So I'll pause to ask Steve to help us just clarify for you, George, the subscription revenue versus the transactional or volumetric revenue and what we expect in the back half.

30% of the revenue tends to be primarily volume based revenue.

And what we're looking at from a full year guide is the expectation that the patients start to hit those are meet those deductibles sorry.

Speaker #6: Yeah, and I might revert a little bit, George, back to the prepared comments that I had stated. Reminding you about the first half of the year second half of the year dynamic that happens within and seasonality that happens within the patient payment solutions primarily associated with patients that are under high deductible healthcare plans that have those deductibles reset.

Steven Oreskovich: Yeah, and I might revert a little bit, George, back to the prepared comments that I had stated, reminding you about the first half of the year, second half of the year dynamic that happens within and seasonality that happens within the patient payment solutions, primarily associated with patients that are under high deductible healthcare plans that have those deductibles reset at the beginning of the year and generally start to meet those deductibles in the second half of the year. So that 30% of the revenue tends to be primarily volume-based revenue. And what we're looking at from a full-year guide is the expectation that patients start to hit those or meet those deductibles, sorry, in that second half of the year.

And that second half of the year. So if you if you're looking at sort of the expectation from a subscription revenue growth rate in volume based growth rate, it's probably more heavily weighted towards the volume based growth rate in the second half of the year as it pertains to the full year guide.

Okay I appreciate the color I'll hop back in the queue.

Thanks George.

Speaker #6: At the beginning of the year and are generally start to meet those deductibles in the second half of the year. So that 30% of the revenue tends to be primarily volume-based revenue.

Again, ladies and gentlemen, just as a reminder, we ask that you limit yourself to one question one moment for our next question.

Yeah.

Our next question comes from Elizabeth Anderson with Evercore ISI. Your line is open.

Hi, guys. Thanks, so much for the question I don't know if I can get such a sound bite out of U S.

Speaker #6: And what we're looking at from a full-year guide is the expectation that patients start to hit those or meet those deductibles, sorry, in that second half of the year.

As George Ken, but I was hoping you could help me understand the math that you are.

Talking about about the one big beautiful Belle math, when Youre talking about sort of the 15% of Medicaid funding and expanding as well with a 1% impact.

Speaker #6: So you're looking at sort of the expectation from a subscription revenue growth rate and volume-based growth rate, it's probably more heavily weighted towards the volume-based growth rate.

Steven Oreskovich: So if you're looking at sort of the expectation from a subscription revenue growth rate and volume-based growth rate, it's probably more heavily weighted towards the volume-based growth rate in the second half of the year as it pertains to the full-year guide.

Obviously, that's the key question in terms of how people are thinking about a bunch of health care services companies for 2026. So I was wondering if could you just sort of help us flush out like how do you think about those assumptions and and you know obviously.

Speaker #6: In the second half of the year, as it pertains to the full-year guide.

Speaker #8: Okay, I appreciate the call. I'll op back in the queue.

George Hill: Okay. I appreciate the call. I'll hop back in the queue.

Speaker #7: Thanks, George. Again, ladies and gentlemen, just as a reminder, we ask you limit yourself to one question. One moment for our next estion. Our xt question comes from Elizabeth Anderson with Evercore ISI.

Operator: Thanks, George. So again, ladies and gentlemen, just as a reminder, we ask that you limit yourself to one question. One moment for our next question. Our next question comes from Elizabeth Anderson with Evercore ISI. Your line is open.

There isn't a one to one impact with the volume. So maybe you could just walk us through that again as well and make sure. We all understand how youre thinking that sure let me highlight it.

Elizabeth Thank you.

Speaker #7: Your line is open.

And then I'll turn it to Steve as well basically the way to think about our business is.

Speaker #5: Hi, guys. Thanks so much for the question. I don't know if I can get to just sound bite out of you as George can.

Destiny Orm: Hi, guys. Thanks so much for the question. I don't know if I can get such a sound bite out of you as George can. But I was hoping you could help me understand the math that you were talking about, about the one big beautiful bill math where you're talking about sort of the 15% of Medicaid funding and the HICS funding as well with the 1% impact. Obviously, that's the key question in terms of how people are thinking about a bunch of healthcare services companies for 2026. So I was wondering if you could just sort of help us flesh out like how to think about those assumptions. And you know, obviously, you know, there isn't a one-to-one impact with the volume. So maybe you could just walk us through that again as well and make sure we all understand your thinking there. Thank you.

We.

Speaker #5: But I was hoping you could help me understand the math that ou were talking , about the one big beautiful bill math where you're talking about sort of the 15% of Medicaid funding and the HICS funding as well.

With respect to the one big beautiful Bill Waster serves every payer type on a single platform and we have solutions that address efficiency and finding funding.

Speaker #5: With the 1% impact, obviously, that's the key question in terms of how people are thinking about a bunch of healthcare services companies for 2026.

And so you think about the how we might be insulated from any one source of funding and it really starts with the fact that we serve a very large and diverse group of clients, who have who serve a very large population of patients and not all of those patients necessarily have the same exposure to.

Speaker #5: So I was wondering if you could just sort of p us flesh out like how to think about those assumptions and you know obviously you know there isn't a one-to-one impact with the volume.

Speaker #5: So maybe you uld just walk us through that again as well and make re we all understand your thinking there. Thank ou.

Any one source of funding speaking to the one big beautiful Bill it's Medicaid in particular.

Speaker #3: Sure, let me highlight it. Elizabeth, thank you. And then I'll it to Steve as well. Basically, the way to think about our business is we with respect to the one big beautiful bill, Waystar serves every payer type on a single platform.

Matt Hawkins: Sure. Let me highlight it. Elizabeth, thank you. And then I'll turn it to Steve as well. Basically, the way to think about our business is with respect to the one big beautiful bill, Waystar serves every payer type on a single platform. And we have solutions that address efficiency and finding funding. And so you think about how we might be insulated from any one source of funding. And it really starts with the fact that we serve a very large and diverse group of clients who serve a very large population of patients. And not all of those patients necessarily have the same exposure to any one source of funding. Speaking to the one big beautiful bill, it's Medicaid in particular.

And so really.

It goes to the fact that we have such a diverse business model, our resilient business model that we're insulated from any one particular type of things and if there were to be a.

15% reduction of Medicaid funding what would happen is.

Speaker #3: And we have solutions that address efficiency and finding funding. And so you think about the how we might be insulated from any one source of funding and it really starts with the fact that we serve a very large and diverse group of clients who have who serve a very large population of patients and not all of ose patients necessarily have the same exposure to any one source of funding.

Some of our other solutions would be come in even more demand as providers work to find alternative ways to help their organizations get paid we highlighted a few on our prepared remarks, but that would include solutions that <unk> offers such as insurance coverage detection.

Automatic eligibility verification as providers seek sources of how a patient might be covered chair.

Speaker #3: And speaking to the one big beautiful bill, it's Medicaid in particular. And so really, you know it just goes to the fact that we have such a diverse business model and resilient business model that we're insulated from any one particular type of things.

Charity care screening and propensity to pay AI that waste our offers today.

Matt Hawkins: And so really, you know, it just goes to the fact that we have such a diverse business model, a resilient business model that we're insulated from any one particular type of things. And if there were to be a 15% reduction of Medicaid funding, what would happen is some of our other solutions would come in even more demand as providers work to find alternative ways to help their organizations get paid. We highlighted a few on our prepared remarks, but that would include solutions that Waystar offers, such as insurance coverage detection and automatic eligibility verification as providers seek sources of how a patient might be covered, charity care screening, and propensity to pay AI that Waystar offers today, and an integrated patient financial care suite with patient payments.

And an integrated patient financial care suite with patient payments. So all those things we feel good combined to say, we feel very well positioned.

Speaker #3: And if there were to be a 15% reduction of Medicaid funding, what would happen is some of our other solutions would become even more in demand as providers work to find alternative ways to help their organizations get paid.

Insulated from this type of particular exposure and we did run the math on the hypothetical scenario of a 15% reduction of Medicaid funding followed all the way through our business model and that resulted in a in a retrospective look at trailing 12 month work of less than 1% of revenue of waste starts it would be impacted and Steve if you.

Speaker #3: We highlighted a few on our prepared remarks, but that would include solutions that Waystar offers such as insurance coverage detection and automatic eligibility verification as providers seek sources of how a patient might be covered.

To clarify anything further there that'd be great.

You said it spot on Matt I think the only thing to just add to that other than the business as we went.

The scenario that Matt just articulated is a.

Speaker #3: Charity care screening and propensity to pay AI that Waystar offers today. And an integrated patient financial care suite with patient payments. And so all those things we feel combined to say you know we feel very well positioned and insulated from this type of particular exposure.

Paul downside scenarios. So it doesn't include the offsets where we think our clients would move to and the solutions that we have that could help them that could generate additional revenue for us.

Matt Hawkins: And so all those things, we feel combined, I'd say, you know, we feel very well positioned and insulated from this type of particular exposure. And we did run the math on the hypothetical scenario of a 15% reduction of Medicaid funding, followed it all the way through our business model. And that resulted in a retrospective look, a trailing 12-month look of less than 1% of revenue of Waystars that would be impacted. And Steve, if you clarify anything further there, that'd be great.

If that basis, if that particular client base pardon me.

Speaker #3: And we did run the math on the hypothetical scenario of a 15% reduction of Medicaid funding, following it all the way through our business model.

Impacted us as we had articulated and if states werent again, theres a bunch of things, it's a multivariate environment, but we.

Speaker #3: And that resulted in a retrospective look, a trailing 12-month look of less than 1% of revenue of Waystar as it would be impacted. And Steve, if you clarify anything further there, that'd be great.

We're comfortable with our analysis.

And the resilience of our business.

Great. Thank you very much.

One moment for our next question.

Speaker #6: Yeah, I think you said a spot on, Matt. I ink the only thing to just add to that, Elizabeth, is the scenario that Matt just articulated is a full downside scenario.

Steven Oreskovich: Yeah, I think you said it spot on, Matt. I think the only thing to just add to that, Elizabeth, is the scenario that Matt just articulated is a full downside scenario. So it doesn't include the offsets where we think our clients would move to and the solutions that we have that could help them, that could generate additional revenue for us if that basis, if that particular client base, pardon me, were impacted as we had articulated. And if states weren't to kick in, there's a bunch of other things. It's a multivariate environment, but we're comfortable with our analysis and the resilience of our business.

Our next question comes from Brian <unk> with Jefferies. Your line is open.

Hey, good afternoon, guys and congrats on the quarter.

Just a follow up on Elizabeth's question.

Think about EAP Tc the health insurance exchange subsidy expiring have you looked at how that would look or what that quantification would be the one big data mobility is less than 1%, but <unk> will be more relevant way. So I'm just curious how you're thinking about that thank you.

Speaker #6: So it doesn't include the offsets where we think our clients would move to and the solutions that we have that could help them. That could generate additional revenue for us if that particular client base, pardon me, were impacted as we had articulated.

Yeah, we have we've looked at the analysis in our business and.

Speaker #3: And if states weren't kicking in, there are a bunch of other things that create a multivariate environment. But we're comfortable with our analysis and the resilience of our business.

And again I feel like we're appropriately insulated just given the diversity of clients that we serve and the diversity of patients that they serve so.

Speaker #5: Great. Thank you y much.

Destiny Orm: Great. Thank you very much.

Speaker #7: One moment for our next estion. Our xt question comes from Brian Tanquila with Jeffries. Your line is open.

But it's similar thought process there we've done some sensitivity analysis on our business model and again, what I think what it speaks to in the affirmative is waste our strong business model how in demand. Our solutions are the ways that provider organizations are prioritizing waste or to be able to.

Operator: One moment for our next question. Our next question comes from Brian Tanquin with Jeffries. Your line is open.

Speaker #8: Hey, good afternoon, guys, and congrats to the quarter. Maybe just to follow up on Elizabeth's question. As I think about EAPTCs, you know the health insurance exchange subsidies, expiring, have you looked into how that would look or what that quantification would be?

Allen Lutz: Hey, good afternoon, guys, and congrats to the quarter. Maybe just to follow up on Elizabeth's question, as I think about EAPTCs, you know, the Health Insurance Exchange Subsidy expiring, have you looked into how that would look or what that quantification would be? I know the one big beautiful bill is less than 1%, but EAPTCs will be more relevant in '26. I'm just curious how you're thinking about that. Thank you.

<unk> procure solutions that help them.

Manage this type of difficult environment, and we can help them do that in our results attest to that.

Speaker #8: I know the one big beautiful bill is less than 1%, but EAPTCs may be more relevant in '26. So, I'm just curious how you're thinking about that.

Speaker #8: Thank you.

Thanks, Brian.

Speaker #3: Yeah, we have. We've looked at the analysis in our business. And again, I feel like we're appropriately insulated. Just given the diversity of clients that we serve and the diversity of patients that they serve.

Matt Hawkins: Yeah, we have. We've looked at the analysis in our business, and again, I feel like we're appropriately insulated just given the diversity of clients that we serve and the diversity of patients that they serve. But it's a similar thought process there. We've done some sensitivity analysis on our business model. And again, what I think what it speaks to in the affirmative is Waystar's strong business model, how in demand our solutions are, the ways that provider organizations are prioritizing Waystar to be able to procure solutions that help them manage this type of difficult environment. And we can help them do that, and our results attest to that.

One moment for our next question.

Okay.

Our next question comes from Brian Peterson with Raymond James Your line is open.

Thanks, Michael.

Congrats on the quarter, Matt wanted to double click on mid cycle, Youre clearly leaning into that opportunity with iodine could you help me understand how penetrated that segment is relative to the other areas of RCM and as we think about the AI impact on the value to customers like do you think mid cycle is made.

Speaker #3: So but it's similar thought process there. We've done some sensitivity analysis on our business model. And again, what I think what it speaks to in the affirmative is Waystar's strong business model, how in demand our solutions are.

Speaker #3: The ways that provider organizations are prioritizing Waystar to procure solutions that help them manage this type of difficult environment, and we can help them do that.

The first act relative to other areas, we'd love to unpack that a bit thanks guys.

Yeah. Thanks, Bryan so several thoughts here.

We do know that mid cycle is the source where a lot of.

Speaker #3: And our results attest to that. So, thanks, Brian.

Allen Lutz: Well, thanks, Brian.

Pain is experienced by providers you think historically you could probably picture. This in your mind when the when you as the patient walk into the provider and they see you as a patient and they're trying to keep track of that that interaction from a clinical perspective.

Speaker #7: One moment for ur next estion. Our next question comes from Brian Peterson with Raymond James. Your line is open.

Operator: One moment for our next question. Our next question comes from Brian Peterson with Raymond James. Your line is open.

Speaker #9: Thanks, gentlemen. And welcome. My congrats on the quarter. Matt, one of the double-click on mid-cycle, you're clearly leaning into that opportunity with Iodine. Could you help me stand how penetrated that segment is relative to the other areas of RCM?

Allen Lutz: Thanks, gentlemen. I'm going to congrats on the quarter. Matt, I wanted to double-click on mid-cycle. You're clearly leaning into that opportunity with Iodine. Could you help me understand how penetrated that segment is relative to the other areas of RCM? And as we think about the AI impact on the value to customers, like do you think mid-cycle is maybe the first act relative to other areas? Would love to unpack that a bit.

That that's historically been very manual labor manual work, if a provider seen 40 50 patients a day trying to keep track of that we often hear providers talking about going back at the end of their day trying to retrospectively recall, what the what their counter was sometimes they'll dictate some.

Speaker #9: And as we think about the AI impact on the value to customers, like do you ink mid-cycle is maybe the first act relative to other areas?

Speaker #9: Would love to unpack that a bit. Thanks, guys.

Times Theres other ways to get that information recorded.

Matt Hawkins: Thanks, guys. Yeah, thanks, Brian. So several thoughts here. We do know that mid-cycle is the source where a lot of pain is experienced by providers. You think historically, you could probably picture this in your mind when you as the patient walk into the provider and they see you as the patient, and they're trying to keep track of that interaction from a clinical perspective. That's historically been very manual labor, manual work. If a provider is seeing 40, 50 patients a day, trying to keep track of that, we often hear providers talking about going back at the end of their day, trying to retrospectively recall what their encounter was. Sometimes they'll dictate, sometimes there's other ways to get that information recorded.

Speaker #3: Yeah, thanks, Brian. So several thoughts here. We do know that mid-cycle is the source where a lot of pain is experienced by providers. You think historically, you could probably picture this in your mind when you as the patient walk into the provider and they see you as the patient, and they're trying to ep track of that interaction from a clinical perspective.

We do think that the mid cycle is that again that space between the patient provider clinical encounter and then on the other side, where our claim is formed and successfully submitted that space is ripe with opportunity for AI for AI impact when we think about how much.

Opportunities left.

We said last week on the call that this represents about a 15% total addressable market expansion for us that's why the strictest definitions, but we believe that there is opportunity for us to make it much larger as software and AI consume manual work and manual service.

Speaker #3: That's historically been very manual labor, manual work. If a provider is seen 40 to 50 patients a day, trying to keep track of that, we often hear providers talking about going back at the end of their day, trying to retrospectively recall what their counter was.

Speaker #3: Sometimes they'll dictate; sometimes there are other ways to get that information recorded. We do think that the mid-cycle, that is, the space between the patient-provider clinical encounter and then on the other side, where a claim is formed and successfully submitted, is ripe with opportunity for AI and for AI impact.

And we think step one for US is in this regard is.

Is the acquisition that we announced.

Matt Hawkins: We do think that the mid-cycle, again, that space between the patient-provider clinical encounter, and on the other side, where a claim is formed and successfully submitted, that space is ripe with opportunity for AI, for AI impact. When we think about how much opportunity is left, we said, you know, last week on the call that this represents about a 15% total addressable market expansion for us. That's by the strictest definitions. But we believe that there's opportunity for us to make it much larger as software and AI consume manual work and manual service. And we think step one for us in this regard is the acquisition that we announced. And we'll just work to make this really successful, again, because it's a source of where a lot of pain has been experienced by providers.

And we'll just work to make this really successful again, because it's a source of where a lot of pain has has been experienced by providers. We we like the fact that.

Iodine has some really compelling solutions that they are market leaders. They have over 160, leading custom AI models that that.

Speaker #3: When think about how much opportunity is left, we we said, you know, last week on the call that this represents about a 15% total addressable market expansion for us.

Speaker #3: That's by the strictest definitions but we believe that there's opportunity for us to make it much larger as software and AI consume manual work and manual service and we think step one for us is in this regard is the acquisition that we announced.

That reduce the need for manual work and claim re review by more than 70% in their processing.

160 million clinical encounters and.

And improving the notes and those encounters every year.

And they cover approximately 34% of all inpatient discharges. So as we think about the opportunity what we've spoken to is.

Speaker #3: And we'll just work to make this really successful. Again, because it's a source of where a lot of pain has been experienced by providers.

The fact that.

This clinical data that <unk>.

<unk> generates.

Certainly feeds their AI models today in this learning kind of self improving thing but.

Speaker #3: We like the fact that Iodine has some really compelling solutions that they are market leaders. They have over 160 leading custom AI models that reduce the need for manual work and claim re-review by more than 70%.

Matt Hawkins: We like the fact that Iodine has some really compelling solutions that they are market leaders. They have over 160 leading custom AI models that reduce the need for manual work and claim re-review by more than 70%. And they're processing 160 million clinical encounters and improving the notes in those encounters every year. And they cover approximately 34% of all inpatient discharges. So as we think about the opportunity, what we've spoken to is the fact that this clinical data that Iodine generates, it certainly feeds their AI models today, and it's this learning kind of self-improving thing. But as Waystar gets appropriate access to that clinical data set in the future, we believe that it will bolster Waystar's current software with clinical information and make our current software even better and more compelling.

Waste or gets appropriate access to that clinical data set in the future. We believe that it will bolster wasters current software with clinical information and make our current software even better and more compelling think think about the clinical data benefits that we could add to prior authorizations in denial and appeal.

Speaker #3: And they're processing 160 million clinical encounters and improving the notes and those encounters every year. And they cover approximately 34% of all inpatient discharges.

Management automation and the patient financial experience solution. So we're really excited about the AI opportunity here and not just us.

Speaker #3: So as we think about the opportunity, what we've spoken to is the fact that this clinical data that Iodine generates certainly feeds their AI models today in this learning kind of self-improving thing.

<unk> announced this last week, we had the chance to.

<unk> insight from our clients. So you can bet that as soon as our announcement was over reschedule the call with our advisory Board I know <unk> did the same the client sentiment was 100% positive I heard direct quotes from our advisory Board client members, who said quote we're thrilled about this announcement this will be off.

Speaker #3: But as Waystar gains appropriate access to that clinical data set in the future, we believe that it will bolster Waystar's current software with clinical information and make our software even better and more compelling.

For us and for health care.

Another one said quote very exciting acquisition for waste or feels like the perfect fit for you as you may be aware, we recently implemented iodine across our system. We're looking forward to realizing the full benefit of the opportunities we discovered in our assessment.

Speaker #3: Think about the clinical data benefits that we could add to prior authorizations and denial and appeal management automation, and the patient financial experience solution.

Matt Hawkins: Think about the clinical data benefits that we could add to prior authorizations and denial and appeal management automation and the patient financial experience solution. So we're really excited about the AI opportunity here. And not just us. You know, we announced this last week. We had the chance to get insight from our clients. So you can bet that as soon as our announcement was over, we scheduled a call with our advisory board. I know Iodine did the same. The client sentiment was 100% positive. I heard direct quotes from our advisory board client members who said, quote, "We're thrilled about this announcement. This will be awesome for us and for healthcare." Another one said, quote, "Very exciting acquisition for Waystar. Feels like the perfect fit for you. As you may be aware, we recently implemented Iodine across our system.

Speaker #3: So we're really excited about the AI opportunity here. And not just us. You ow, we announced this last week. We had the chance to, get insight from our clients.

<unk> team much like waste Rf's team has been very invested and engaged throughout the implementation and then this other one that's a favorite quote now I can say that I'm an early adopter at both waste are and you know I've been a longtime advocate of wastewater but now.

Speaker #3: So you can bet that as soon as our announcement was over, we scheduled a call with our advisory board. I know Iodine did the same.

Speaker #3: The client sentiment was 100% positive. I heard direct quotes from our advisory board client members. You said, quote, "We're thrilled about this announcement. This will be awesome for us and for healthcare." Another one said, quote, "Very exciting acquisition for Waystar.

I'm not sure that you knew that I was also an early adopter <unk>. This is all very exciting.

We think about the opportunity here.

To bring.

Modern software AI that improves the clinical documentation that optimizes the claim and our quest our ultimate goal to create the perfect undeniable claim that that this is a great fit and one other thing I just would add.

Speaker #3: Feels like the perfect fit for you." As you may be aware, we recently implemented Iodine across our system. We're looking forward to realizing the full benefit of the opportunities we discovered in our assessment.

Matt Hawkins: We're looking forward to realizing the full benefit of the opportunities we discovered in our assessment. The Iodine team, much like Waystar's team, has been very invested and engaged throughout the implementation." And then this other one that's a favorite, quote, "Now I can say that I'm an early adopter at both Waystar and Iodine. You know I've been a long-time advocate of Waystar, but now I'm not sure that you knew that I was also an early adopter at Iodine. This is all very exciting." And so we think about the AI opportunity here to bring modern software, AI that improves the clinical documentation, that optimizes the claim, and our quest, our ultimate goal to create the perfect, undeniable claim that this is a great fit. And one other thing I just would add, Iodine serves 150-plus clients that constitute or represent more than 1,000 hospitals.

<unk> serves a 150 plus clients.

Speaker #3: The Iodine team, much like Waystar's team, has been very invested and engaged throughout the ementation. And then this other one that's a favorite, quote, "Now I can say that I'm an early adopter at both Waystar and Iodine.

They constitute represent more than a thousand hospitals.

And our research approximately one third of those clients are also waste or clients.

Speaker #3: You know I've been a longtime advocate of Waystar, but now I'm not sure that you knew that I was also an early adopter at Iodine." This is all very exciting.

And so there's this tremendous bidirectional.

Cross sell opportunity that will emerge from this so not only is this a perfect.

Speaker #3: And so we think about the AI opportunity here to to bring modern software AI that improves the clinical documentation that optimizes the claim in our quest, our ultimate goal to create the perfect undeniable claim that this is a great fit.

I fit and strategic fit but it also will lead to we believe long term great financial sense as well.

Great color and love the passion that thanks, guys.

You can tell I'm excited about that.

One moment for our next question.

Speaker #3: And one other thing I just would add, Iodine serves 150-plus clients. The constitute a represent more than 1,000 hospitals. In our research, approximately one-third of those clients are also Waystar clients.

Our next question comes from Ryan Daniels with William Blair. Your line is open.

Hey, guys. Thanks for taking the questions maybe one for you you hit on this a little bit in your prepared comments, but earlier. This week, we effectively heard from one of your competitors that their technology is falling behind the curve and really impacting market performance I am curious if you could dive a little bit deeper about what youre seeing on the competitive front and perhaps any color.

Matt Hawkins: In our research, approximately one-third of those clients are also Waystar clients. And so there's this tremendous bidirectional cross-sell opportunity that will emerge from this. So not only is this a perfect AI fit and strategic fit, but it also will lead to, we believe, long-term great financial sets as well.

Speaker #3: And so there's this tremendous bidirectional cross-sell opportunity that will emerge from this. So not only is this a perfect AI fit, and strategic fit, but it also will lead to we believe long-term great financial sense as well.

One recent win rates or how you are modern platform is impacting the sales pipeline versus what you've seen in past years against your peers. Thanks.

Thanks Ryan.

Yeah.

Speaker #8: Great caller. I love the passion, Matt. Thanks, guys.

Allen Lutz: Great color and love the passion, Matt. Thanks, guys.

<unk> did add some comments earlier.

Speaker #3: Thanks. You can tell I'm excited about this.

Steven Oreskovich: Thanks. You can tell I'm excited about this.

We are seeing continued switching on the horizon our win rates have stayed consistent with what we published as part of the <unk>.

Speaker #7: One moment for our next estion. Our next question comes from Ryan Daniels with William Blair. Your line is open.

Operator: One moment for our next question. Our next question comes from Ryan Daniels with William Blair. Your line is open.

<unk>, so strong win rates against.

Speaker #10: Yeah, guys. Thanks for taking the questions. Matt, one for you. You hit on this a little bit in your prepared comments. But earlier this week, we effectively heard from one of our competitors that their technology is falling behind the curve and really impacting market performance.

Ryan Daniels: Yeah, guys, thanks for taking the questions. Matt, one for you. You hit on this a little bit in your prepared comments, but earlier this week, we effectively heard from one of your competitors that their technology is falling behind the curve and really impacting market performance. I'm curious if you could dive a little bit deeper about what you're seeing on the competitive front and perhaps any color on recent win rates or how your modern platform is impacting the sales pipeline versus what you've seen in past years against your peers. Thanks.

All of our direct competitors and we believe that this is an opportunity for waste are to continue to execute on our play.

We have noted a level of unrest in the.

And the.

Speaker #10: So I'm curious if you could dive a little bit deeper about what you're seeing on the competitive front and perhaps any color on recent win rates or how your modern platform is impacting the sales pipeline versus what you've seen in past years against your peers.

The change client base in particular, as I mentioned and.

And we believe that looking at reflecting on our qualified pipeline of opportunity is seeing the number of rfps and jump balls stained consistently strong and looking at the bookings results that we've achieved so far this year.

Speaker #10: Thanks.

Speaker #3: Thanks, Ryan. You know, we I did add some comments earlier we are seeing continued switching on the horizon. Our win rates have stayed consistent with what we published as part of the S1.

Matt Hawkins: Thanks, Ryan. You know, I did add some comments earlier. We are seeing continued switching on the horizon. Our win rates have stayed consistent with what we published as part of the S1. So strong win rates against all of our direct competitors. And we believe that this is an opportunity for Waystar to continue to execute on our play. We have noted a level of unrest in the changed client base, in particular, as I mentioned. And we believe that looking at reflecting on our qualified pipeline of opportunities, seeing the number of RFPs and jump balls staying consistently strong, and looking at the bookings results that we've achieved so far this year, we're excited about the opportunity that we see and the momentum that we feel is kind of building in the market. We believe that Waystar could be a share gainer here.

We're excited about the opportunity that we see and the momentum that we feel is kind of building in the market. We believe that wastewater can be a share gainer here.

Okay perfect I appreciate it thank you.

Speaker #3: So strong win rates against all of our direct competitors and we believe that this is an opportunity for Waystar to continue to execute on our play we have noted a level of unrest in the changed client base in particular.

One moment for our next question.

Our next question comes from Joe interesting with Turo Securities. Your line is open.

Thank you and congratulations on a strong quarter I wanted to follow up on your comments around health plans pledge around reducing the need for prior authorization given your deep partnership with health systems and provider. What is the early feedback on this development providers, making any changes into the workflow and the spa is it too early to say.

Speaker #3: As I mentioned, and we believe that looking reflecting on our qualified pipeline of opportunities, seeing the number of RFPs and jump balls staying consistently strong, and looking at the bookings results that we've achieved so far this year, we're we're excited about the opportunity that we see and the momentum that we feel is kind of building in the market.

As I noted that we have heard about that concern among provided that this might drive more denials, both patient interaction, which can be actually good for your platform.

Speaker #3: We believe that Waystar could be a share gainer here.

Neither management, but just curious like any feedback from providers for on that.

Speaker #8: Okay, perfect. Appreciate it. Thank you.

Ryan Daniels: Okay, perfect. I appreciate it. Thank you.

Yes, Thank you Joel Indra.

Speaker #10: Thanks.

Matt Hawkins: Thanks.

Speaker #7: One moment for our next question. Our next question comes from Joe Interesting with Tourist Utilities. Your line is open.

Yeah.

Operator: One moment for our next question. Our next question comes from Jelen Jasing with Trust Securities. Your line is open.

I don't know that necessarily we see that there is more than 2 billion prior authorizations that occurred today.

You know the authorization process and it can be very necessary and important at times.

Speaker #9: Thank you, and congratulations on a strong quarter. I want to follow up on your comments around health plans, pledge around reducing the need for prior authorization.

Jailendra Singh: Thank you, and congratulations on a strong quarter. I want to follow up on your comments around health plans' pledge around reducing the need for prior authorization. Given your deep partnership with health systems and providers, what is their early feedback on this development? Are providers making any changes in their workflow in response? Is it too early to say? And related to that, we have heard about a concern among providers that this might drive more denials post-patient interaction, which could be actually good for your platform denial management. But just curious, like any feedback from providers on that?

It's a way for payers to kind of play.

Speaker #9: Given your deep partnership with health systems and providers, what is their early feedback on this development? Are providers making any changes in their workflow in response?

Play a stage gate on what care gets delivered for complex medical procedures or encounters.

And I think what the prior authorization pledge highlighted from our perspective is that that can increasingly be.

Speaker #9: Or is it too early to say? Related to that, we have heard about a concern among providers that this might drive more denials post-patient interaction, which could actually be good for your platform's denial management.

They can increasingly deploy modern technical protocols to drive those interactions. We think that's a very good thing.

Speaker #9: But just curious, like any feedback from providers on that?

Modern Apis that are secure that allow for providers to rapidly get.

Speaker #3: Yes, thank you, Joe Indra. I don't know that necessarily there's, you know, we see that there's more than 2 billion prior authorizations that occur today.

Matt Hawkins: Yes, thank you, Jallendra. I don't know that necessarily there's, you know, we see that there's more than 2 billion prior authorizations that occur today. As you know, the authorization process can be very necessary and important at times. You know, it's a way for payers to kind of play a stage gate on what care gets delivered for complex medical procedures or encounters. And I think what the prior authorization pledge highlighted from our perspective is that that can increasingly be, they can increasingly deploy modern technical protocols to drive those interactions. We think that's a very good thing. You know, modern APIs that are secure that allow for providers to rapidly get authorization from payers. And I'll tell you right now, the early feedback is providers and patients suffer from authorizations that are manual, that take in some cases days where care is delayed.

<unk> authorization from payers and I'll tell you right now the early feedback is providers and patients suffer from authorizations that are manual that take some cases days where care is delayed a patient comes to the office, hoping to get a.

Speaker #3: As you know, the authorization process can be very necessary and important at times. It's a way for payers to kind of play a stage gate on what care gets delivered for complex medical procedures or encounters.

A procedure or something done are advancing their health care.

And they can't they're pause they have to end up leaving and coming back at another time.

Speaker #3: And I think what the prior authorization pledge highlighted from our perspective is that that can increasingly be they can increasingly deploy modern technical protocols to drive those interactions.

We.

Our prior authors prior authorization solutions automate as we highlighted 90% of that.

Speaker #3: We think that's a very good thing. You know modern APIs that are secure that allow for providers to rapidly get authorization from payers. And I'll tell you right , the early feedback is providers and patients suffer from authorizations that are manual, that take some cases days, where care is delayed, a patient comes to the office, hoping to get a a procedure or something done or advancing their health, you ow, care and they can't, they're paused, they have to end up leaving and coming back at another time.

Of.

Those authorizations and we think we're just getting started and we can have a voice and be a market leader here to represent providers.

And patients and to help streamline and bring more benefit I don't know that it will be reducing the need for <unk>.

Our prior authorizations to your earlier question as much as it will be streamlining the need and creating more real time opportunities and what are your stores in a position to help and continue its market leadership in this area.

Matt Hawkins: A patient comes to the office hoping to get a procedure or something done or advancing their health, you know, care, and they can't, they're paused, and they have to end up leaving and coming back at another time. We, you know, our prior authorization solutions automate, as we highlighted, 90% of those authorizations. And we think we're just getting started, and we can have a voice and be a market leader here to represent providers and patients and to help streamline and bring more benefit. I don't know that it will be reducing the need for prior authorizations, to your earlier question, as much as it will be streamlining the need and creating more real-time opportunities.And

Great. Thanks, Matt. Thank you one moment for our next question.

Our next question comes from Charles <unk> with TD Cowen Your line is open.

Speaker #3: We you ow our prior authorization solutions automate as we highlighted 90% of the of those authorizations and we think we're getting started and we can have a voice and be a market leader here to represent providers and patients and to help streamline and bring more benefit.

Hi, This is Lucas on for Charles Thanks for taking the questions and congrats on the quarter.

Recently, we've heard that the competitor impacted by the cyber attack has recently been reaching out to customers that have left as a result of the outage.

Pushing hard for them to return that their systems are back online, possibly using contractual obligations to do so.

Speaker #3: I don't know that it will be reducing the need for prior authorizations. To your earlier question, as much as it will be streamlining the need and creating more real-time opportunities.

I guess one are you experiencing this and then two you noted earlier seeing excellent retention amongst these.

Customers from that competitor, but curious if it's possible that you see this as a risk going forward.

Speaker #3: And Waystar's in a position to help and continue its market leadership in this area.

Operator: Waystar is in a position to help and continue its market leadership in this area.

Speaker #8: Great. Thanks, Matt.

Greg McDowell: Great. Thanks, Mike.

Speaker #3: Thank you.

Yeah.

Operator: Thank you.

Speaker #7: One moment for our next question. Our next question comes from Charles Reed with PD Cowan. Your line is open.

Matt Hawkins: One moment for our next question. Our next question comes from Charles Reid with TD Cowan. Your line is open.

We have not noticed that again, we have seen excellent retention amongst that cohort that joined us.

Speaker #10: Hi, this is Lucas on for Charles. Thanks for taking the questions and congrats on the quarter. Recently, we've heard that the competitor impacted by the Cyber Attack has recently been reaching out to customers that have left as a result of the outage.

And.

Greg McDowell: Hi, this is Lucas on for Charles. Thanks for taking the questions and congrats on the quarter. Recently, we've heard that the competitor impacted by the cyber attack has recently been reaching out to customers that have left as a result of the outage, pushing hard for them to return now that their systems are back online, possibly using contractual obligations to do so. I guess, one, are you experiencing this? And then, two, you noted earlier seeing excellent retention amongst these customers from that competitor. But curious if it's possible that you see this as a risk going forward.

I will make a lot of additional comments on kind of what they might be doing in the market, but but we believe that as.

We move further and further away from.

The actual cyber attack and outage itself.

Speaker #10: Pushing hard for them to return now that their systems are back online, possibly using contractual obligations to do so. I guess, Juan, are you experiencing this?

This will be an opportunity for waste are too.

<unk>.

This this next kind of cohort of.

Clients that are potentially in a state of unrest.

Find a great home at way start so I think that's all I'll comment further given what I've already said, but we would note that there was a survey that suggested that there's more than 36% of the survey respondents that are looking or likely to switch vendors and.

Operator: We have not noticed that. Again, we've seen excellent retention amongst the cohort that joined us. And you know I won't make a lot of additional comments on kind of what they might be doing in the market. But we believe that as we move further and further away from the actual cyber attack and outage itself, this will be an opportunity for Waystar to help this next kind of cohort of clients that are potentially in a state of unrest find a great home at Waystar. So I think that's all I'll comment further, given what I've already said. But we would note that there was a survey that suggested that there's more than 36% of the survey respondents that are looking or likely to switch vendors, and that a third of those respondents are coming from the incoming competitor that you highlighted.

That a third of those.

Respondents are coming from the incumbent competitor that you highlighted so I'll just leave it at that if that's okay.

Thanks I appreciate it.

One moment for our next question.

Yes.

Our next question comes from Daniel gross side with Citi. Your line is open.

Hi, guys. Thanks for taking the question.

To go back to the three large client wins that helped boost volume revenue this quarter.

Are those wins contemplated in guidance last quarter and so.

The upside is really coming from onboarding them faster than anticipated and then I'm curious if you can provide a bit more detail on those clients, namely for these competitive takeaways are they health system or ambulatory clients and is there opportunity for further cross sells this year. Thanks.

Yes. Thanks, Daniel This is Steve I'll hand, the first question.

Operator: So I'll just leave it at that if that's okay.

Regarding the contemplation in with respect to guidance.

Greg McDowell: Thanks. Appreciate it.

Matt Hawkins: One moment for our next question. Our next question comes from Daniel Grossleit with CITI. Your line is open.

For our larger clients, we typically and we've talked about this in the past we typically expect the time to revenue associated with implementation from those those larger clients.

Steven Oreskovich: Hi, guys. Thanks for taking the question. I'd like to go back to the three large client wins that helped boost volume revenue this quarter. Were those wins contemplated in guidance last quarter? And so you know the upside is really coming from onboarding them faster than anticipated. And then I'm curious if you can provide a bit more detail on those clients, namely, were these competitive takeaways? Are they health system or ambulatory clients? And is there opportunity for further cross-sales this year? Thanks.

To Kurt to occur over several months generally between six and six to 12 months and maybe sometimes even longer depending upon how they're rolling announced out amongst their various facilities.

In this case the three noted.

Wanted to move rapidly and the solutions that they had.

Contracted four allowed us to roll those out across the entire.

Operator: Yeah. Thanks, Daniel. This is Steve. I'll hit the first question regarding the contemplation and with respect to guidance. For our larger clients, we typically, and we've talked about this in the past, we typically expect the time to revenue associated with implementation from those larger clients to occur over several months, generally between 6 and 6 to 12 months and maybe sometimes even longer, depending upon how they're rolling those out amongst their various facilities. And in this case, the three noted wanted to move rapidly, and the solutions that they had contracted for allowed us to roll those out across their entire footprint very rapidly. So they did lead to upside versus our expectations as it pertains to the second quarter of 2025. We've considered that now in the rest of the full-year guide.

Their entire footprint very.

Very rapidly so they did lead to upside versus our expectations as it pertains to the second quarter of 2025.

We consider that now and the rest of the full year guide and as part of the reason, while beating revenue by $15 million from our expectation in the second quarter for the full year, we increased revenue guidance by $22 million.

Part of the contextually, our thought process on the raise substantially all of our second quarter beat.

Yes.

Oh, sorry into one other part to your question as far as the mixed it wasn't all.

Health system, or our large ambulatory clients, rather a mix of both.

And are these competitive takeaways.

Yes, Hey, we're also in all three cases yep.

Okay, great. Thank you.

Hello, and welcome I'm, sorry, one moment for our next question.

Operator: And as part of the reason why beating revenue by 15 million from our expectation in the second quarter, for the full year, we increased revenue guidance by 22 million. So that's part of the contextually our thought process on the raise substantially above our second quarter beat. Oh, sorry. To one other part to your question, as far as the mix, it wasn't all health system or large ambulatory clients, rather a mix of both.

Our next question comes from Steven Valiquette with Mizuho Securities. Your line is open.

Thanks, Yeah, Hi, it's Steven Valiquette from Amazon.

So obviously at this point a lot of key topics are already been talked about but one thing I was kind of curious about you're really in the clearinghouse solutions market and really most of the back end of our revenue cycle continuum.

Some of your biggest competitors are obviously still on by managed care payers once been talked about a lot on this call, but theres other ones too. So I guess really what the results youre seeing in some of the wins you've had.

Curious, if you're getting more feedback that in this environment the waste or the independents is really resonating just as strong if not even stronger in 2025 versus 2024 and it is hard to quantify something like that but any qualitative color you know somebody mentioned.

Steven Oreskovich: Yeah. And were these competitive takeaways?

Operator: Yes. Yes. They were in all three cases. Yep.

Steven Oreskovich: Okay. Great. Thank you.

Operator: You're welcome.

Matt Hawkins: Sorry. One moment for our next question. Our next question comes from Steven Valachutti with Mizuho Securities. Your line is open.

That competitor talked about kind of falling behind from a technology innovation standpoint, but really just on the independent part in particular, just curious to hear more about that and whether that's resonating really against a lot of your other competitors that are owned by payers. Thanks.

Steven Oreskovich: Thanks. Yeah. Hi. It's Steven Valachutti from Mizuho. So yeah, obviously, at this point, a lot of key topics have already been talked about. But one thing I was kind of curious about, you're really in the clearinghouse solutions market and really, you know, most of the back end of a revenue cycle continuum. You know, some of your biggest competitors are obviously still owned by managed care payers. You know, one's been talked about a lot on this call, but there's other ones too. So I guess really with the results you're seeing and some of the wins you've had, you know, curious if you're getting more feedback that in this environment that Waystar's independence is really resonating just as strong, if not even stronger, you know, in 2025 versus 2024. I know it's hard to, you know, quantify something like that by any qualitative color.

I think Stephen we do hear that feedback from time to time I think what providers are.

One team and looking for is a sense of fairness.

The concern that.

The claims management system or the clearinghouse might be owned by a potential payer they create.

Our concern of conflict, we do hear that.

Providers need and patients need a referee.

Steven Oreskovich: I know somebody mentioned, you know, that competitor talked about kind of falling behind from a technology innovation standpoint, but really just, you know, on the independence part in particular, just curious to hear more about that and whether that's resonating really against, you know, a lot of your other competitors that are owned by payers. Thanks.

Need a sense of fairness and waste our brings that through transparency and accuracy and efficiency.

That's that's what we're advocating for it and we have great technology that deploys AI to help bring fairness and a referee to this process and Ah.

Operator: Thanks, Steven. We do hear that feedback from time to time. I think what providers are wanting and looking for is a sense of fairness. And the concern that the claims management system or the clearinghouse might be owned by a potential payer may create a concern of conflict. We do hear that. Providers need and patients need a referee. They need a sense of fairness. And Waystar brings that through transparency and accuracy and efficiency. That's all that's what we're advocating for. And we have great technology that deploys AI to help bring fairness and a referee to this process. And I do see that that message resonating even stronger in 2025.

I do see that that message resonating even stronger in 2025, and I think part of it again going back to <unk> as a public company, it's been really important for us to be able to share this fairness messy.

Message in the market and to.

To build our awareness that way starts here to help and we can help providers and thereby also help patients and so yes.

Answer your question succinctly Steven.

We do see that and the good news is we're delivering technology. All the time as you know, we're delivering hundreds and hundreds of feature improvements and new capabilities and any any quarter.

So providers are looking to us to help future proof the way they get paid to do it very efficiently and with a sense of fairness and that that message is resonating.

Okay. That's helpful. Thanks.

Operator: And I think part of, again, going back to Waystar as a public company, it's been really important for us to be able to share this fairness message in the market and to build our awareness that Waystar is here to help. And we can help providers and thereby also help patients. And so yes, to answer your question succinctly, Steven, we do see that. And the good news is we're delivering technology all the time. As you know, we're delivering hundreds and hundreds of feature improvements and new capabilities in any quarter. And so providers are looking to us to help future-proof the way they get paid to do it very efficiently and with a sense of fairness. And that message is resonating.

<unk>.

And I'm not showing any further questions at this time I would like to turn the call back over to Matt Hawkins CEO for any closing remarks, okay. Great Hey, Thank you so much for joining today everybody. We definitely appreciate the thoughtful questions and engagement.

Waster enters the second half of 2025 with a sense of momentum and a sharp focus on execution and we've updated our 2025 full year guidance.

Kind of as a signal of Pat we continued to deliver durable growth impactful innovations and meaningful ROI that drives tangible value.

And with an AI powered software platform accelerating automation and a growing base of engaged clients. We believe we are well positioned to shape, the future of health care payments and to define what's possible.

Steven Oreskovich: Okay. That's helpful. Thanks.

As you've heard me say the creation and delivery of the perfect undeniable claim.

Greg McDowell: Thank you.

Matt Hawkins: And I'm not showing any further questions at this time. I'd like to turn the call back over to Matt Hawkins, CEO, for any closing remarks.

Our vision reflects our commitment to eliminating friction maximizing reimbursement and delivering compounding long term growth and innovation that leads to value I'd.

Operator: Okay. Great. Hey, thank you so much for joining today, everybody. We definitely appreciate the thoughtful questions and the engagement. Waystar enters the second half of 2025 with a sense of momentum and a sharp focus on execution. And we've updated our 2025 full-year guidance kind of as a signal of that. We continue to deliver durable growth, impactful innovations, and meaningful ROI that drives tangible value. And with an AI-powered software platform accelerating automation and a growing base of engaged clients, we believe we're well-positioned to shape the future of healthcare payments and to define what's possible, which is, you've heard me say, the creation and delivery of the perfect, undeniable claim. Our vision reflects our commitment to eliminating friction, maximizing reimbursement, and delivering compounding long-term growth and innovation that leads to value.

I'd like to just especially thank our heroic clients our amazing team members and our shareholders for your continued trust and partnership Thank you.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

Operator: I'd like to just especially thank our heroic clients, our amazing team members, and our shareholders for your continued trust and partnership. Thank you.

Matt Hawkins: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.