Waystar Reports Fourth Quarter and Fiscal Year 2024 Results

PR Newswire

LEHI, Utah and LOUISVILLE, Ky., Feb. 18, 2025

Fiscal year 2024 revenue of $944M, up 19% YoY

Q4 revenue growth of 18% year-over-year

Q4 net income of $19.1 million and non-GAAP net income of $52.1 million

Fiscal year 2024 net loss $19.1 million, 62.7% improvement YoY

Fiscal year 2024 adjusted EBITDA of $383M, up 15% YoY

Q4 net income margin of 8%; adjusted EBITDA margin of 41%

LEHI, Utah and LOUISVILLE, Ky., Feb. 18, 2025 /PRNewswire/ -- Waystar Holding Corp. (Nasdaq: WAY), a provider of leading healthcare payment software, today reported results for the fourth quarter and full year ended December 31, 2024.

"We are pleased to report strong results for the fourth quarter and full year 2024, exceeding expectations and reflecting the successful execution of our strategic priorities," said Matt Hawkins, Chief Executive Officer of Waystar. "By leveraging the power of our cloud-based software platform, we have consistently delivered measurable return on investment for our clients."

Hawkins continued, "Looking ahead, we expect to achieve solid revenue growth at scale, paired with compelling adjusted EBITDA margins, positioning us for continued success."

Fourth Quarter 2024 Financial Highlights

   -- Revenue of $244.1 million, up 18% year-over-year 
 
   -- Net income of $19.1 million, GAAP net income per share of $0.11, and net 
      income margin of 8% 
 
   -- Non-GAAP net income of $52.1 million and non-GAAP net income per diluted 
      share of $0.29 
 
   -- Adjusted EBITDA of $100.2 million and adjusted EBITDA margin of 41% 
 
   -- Cash flow from operations of $65 million and unlevered free cash flow of 
      $80 million 

Key Metrics and Revenue Disaggregation

   -- 1,203 clients contributed over $100,000 in LTM revenue, up 15% 
      year-over-year 
 
   -- Net revenue retention rate $(NRR.UK)$ of 110% 
 
   -- Subscription revenue of $121.6 million, up 18% year-over-year 
 
   -- Volume-based revenue of $121.2 million, up 19% year-over-year 

Financial Outlook

As of February 18, 2025, Waystar provides the following guidance for its full fiscal year 2025.(1)

   -- Total revenue is expected to be between $1.0 billion and $1.016 billion 
 
   -- Adjusted EBITDA is expected to be between $399 million and $407 million 
 
   -- Non-GAAP net income is expected to be between $237 million and $243 
      million 
 
   -- Diluted non-GAAP net income per share is expected to be between $1.29 and 
      $1.32 

Webcast Information

Waystar's financial results will be discussed on a conference call scheduled at 8:30 a.m. Eastern Standard Time today, February 18, 2025. A live audio conference call will be available on Waystar's website at https://investors.waystar.com/news-events/events. The webcast will be archived on the site for those unable to listen in real time. This earnings release and the related Current Report on Form 8-K filed February 18, 2025 can be accessed on the Investor Relations page of the company's website. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website. Accordingly, investors should monitor this portion of our website, in addition to following our press releases, U.S. Securities and Exchange Commission ("SEC") filings, and public conference calls and webcasts.

Non-GAAP Financial Measures

To supplement the consolidated financial statements prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures as defined below. We present non-GAAP financial measures as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes these non-GAAP financial measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses adjusted EBITDA and adjusted EBITDA margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide.

Adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per share and unlevered free cash flow are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) or net income (loss) margin as measures of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be a measure of free cash flow available for management's discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. A reconciliation is provided below for our non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

The following non-GAAP financial measures and key performance metrics are defined below:

Adjusted EBITDA and adjusted EBITDA Margin

We define adjusted EBITDA as net loss before interest expense, net income tax benefit, depreciation and amortization, and as further adjusted for stock-based compensation expense, acquisition and integration costs, asset and lease impairments, costs related to amended debt agreements, and IPO related costs. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue.

Non-GAAP Net Income and Non-GAAP Net Income Per Share

We define non-GAAP net income as GAAP net income excluding the impact of stock-based compensation, acquisition and integration costs, asset and lease impairments, IPO related costs, costs related to amended debt agreements and amortization of intangibles. We updated the definition of non-GAAP net income to include amortization of intangibles to align with a more common definition used by our peers. We have revised prior year disclosures to align with this updated definition. The tax effects of the adjustments are calculated using a management-estimated annual effective non-GAAP tax rate of 21%.

We define non-GAAP net income per share as non-GAAP net income (loss) divided by weighted-average shares used to compute net loss per share.

Unlevered Free Cash Flow

We define unlevered free cash flow as cash from operations plus cash interest expense less capital expenses.

Net Debt

We define net debt as the sum of the current portion of long-term debt, long-term debt, and accounts receivable securitization less cash and equivalents.

Adjusted Net Leverage Ratio

We define adjusted net leverage ratio as net debt divided by adjusted EBITDA over the preceding twelve months.

Key Performance Metrics

Net Revenue Retention Rate

Our Net Revenue Retention Rate compares twelve months of client invoices for our solutions at two period end dates. To calculate our Net Revenue Retention Rate, we first accumulate the total amount invoiced during the twelve months ending with the prior period-end or Prior Period Invoices. We then calculate the total amount invoiced to those same clients for the twelve months ending with the current period-end, or Current Period Invoices. Current Period Invoices are inclusive of upsell, downsell, pricing changes, clients that cancel or chose not to renew, and discontinued solutions with continuing clients. The Net Revenue Retention Rate is then calculated by dividing the Current Period Invoices by the Prior Period Invoices. Our total invoices included in the analysis are greater than 98% of reported revenue. We use Net Revenue Retention Rate to evaluate our ongoing operations and for internal planning and forecasting purposes. Acquired businesses are included in the last-twelve-month Net Revenue Retention Rate in the ninth quarter after acquisition, which is the earliest point that comparable post-acquisition invoices are available for both the current and prior twelve-month period.

Customer Count with >$100,000 of Revenue

We regularly monitor and review our count of clients who generate more than $100,000 of revenue.

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