Waystar Holding Corp. Q1 FY2026 earnings call

Waystar had a solid start to 2026 with strong core business execution and innovation momentum. Drove 40% of new bookings in Q1 with AI-powered capabilities. Expanded client base by adding 42 new clients with over $100,000 in trailing 12-month revenue. Net revenue retention rate was approximately 111%. Iodine integration is running ahead of plan, accelerating AI initiatives. AI is embedded into workflows, shifting toward agentic workflows, with 50% of solutions already leveraging AI and nearly 40% of revenue from AI-embedded workflows.

Revenue was $314 million in Q1, up 22% year-over-year. Subscription revenue was $172 million, up 38% year-over-year, comprising 55% of total revenue. Volume-based revenue was $139 million, up 7% year-over-year. Adjusted EBITDA was $135 million, with an adjusted EBITDA margin of 43%. Approximately 40% of revenue is generated by AI-embedded workflows, and nearly 50% of solutions leverage AI.

Reaffirms revenue guidance range of $1.274 billion to $1.294 billion, midpoint $1.284 billion, up 17% year-over-year. Adjusted EBITDA guidance range of $530 million to $540 million, midpoint $535 million. Expects normalized organic revenue growth of approximately 10% for the year. Anticipates Q2 sequential revenue growth to be flat to 1% and Q3 sequential growth to be 1% to 3%.

Forward-looking statements involve risks and uncertainties. For a full discussion of risks impacting forward-looking statements, refer to the press release and SEC filings.

Q: Adam Hotchkiss of Goldman Sachs asked about the degree to which AI can be additive to revenue growth.

A: Matt responded AI expands the total addressable market and new AI-powered capabilities like the recruitment solution allow Waystar to pursue a larger opportunity.

Q: Charles Rhee of TD Cohen inquired about patient revenue.

A: Matt and Steve explained it was due to accelerated conversion from print to digital statements and weather-related impacts.

Q: Jalindra Singh of Truist Securities asked about the remaining 60% of bookings.

A: Matt said bookings are from new prospects and cross-sell, with Q2 having the largest qualified pipeline in history.

Q: Ryan Daniels of William Blair asked about the rollout of the payment recruitment solution.

A: Matt responded about early adopter programs, training, and educating providers on the benefits.

Q: Craig Hettenbach of Morgan Stanley asked about the tipping point to platforms.

A: Matt said clients want end-to-end integrated platforms, and Waystar's platform approach is validated by large deals.

Q: Sean Dodge of BMO Capital Markets asked about AI pricing timelines.

A: Matt said Waystar has always priced to value and AI is a long-term opportunity to price to the value delivered.

Q: Stan Berenstein of Wells Fargo Securities LLC asked about the sales cycle impact.

A: Matt responded sales cycles vary by client type, with no compression or elongation and elevated win rates.

Q: Ryan McDonald of Needham & Company asked about Q2 margin investments.

A: Steve said investments in innovation, client experience, and cybersecurity were in line with expectations.

Q: George Hill of Deutsche Bank asked about Q2 volume-based revenue slowdown.

A: Steve explained it was due to print to digital conversion and patient utilization, with large deals driving the back half.

Q: Luis for Daniel asked about AI product demand.

A: Matt said providers are broadly interested in AI and need trusted partners like Waystar.

Q: Elizabeth Anderson of Evercore ISI asked about hospital financing and payer feedback.

A: Matt said solutions are prioritized as they help providers get paid accurately and have outreach from payers.

Q: Constantine Devedes of Citizens asked about momentum in the acute space.

A: Matt said Waystar works with 16 of the top 20 hospitals and 40% of revenue is acute related.