WAY - NASDAQ

Good day, and thank you for standing by. Welcome to the Waystar Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Edward Parker, Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining Waystar Holding Corp.'s fourth quarter and fiscal year 2025 earnings call. Joining me today are Matthew J. Hawkins, Waystar Holding Corp.'s Chief Executive Officer, and Steven M. Oreskovich, Waystar Holding Corp.'s Chief Financial Officer. This morning, we issued a press release announcing our financial results and published an accompanying presentation deck. You can find these materials at investors.waystar.com. Before we begin, I would like to remind you that this call contains forward-looking statements, which are predictions or beliefs about future events or performance, growth, and margins. Examples of these statements include expectations of future financial results. These statements involve a number of risks and uncertainties that may cause 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, all of which are available on the Investor Relations page of our website. Any forward-looking statements made on this call are only as of today and will not be updated unless required by law. We will also discuss certain non-GAAP financial measures. These measures are intended to provide additional insight into our performance and should not be considered in isolation or as a substitute for financial information prepared in accordance with GAAP. 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 would like to turn the call over to Matthew. Thank you, Edward, and good morning, everyone. Thank you for joining our Q4 2025 earnings call. Today, we are pleased to share Waystar Holding Corp.'s strong Q4 and full year 2025 results, reflecting the durability of our business model, the execution of our team, and the trust providers place in our platform. 2025 was a defining year for Waystar Holding Corp. We crossed $1 billion in revenue, exceeded both our revenue and EBITDA guidance, and achieved

strategic milestones that strengthened our competitive position. We completed the acquisition of Iodine Software, adding more than 1,000 hospitals and health systems, deep clinical intelligence, and significantly expanding our addressable market. This combination positions Waystar Holding Corp. as the only platform with both clinical encounter visibility and financial outcome intelligence at scale. We also extended our AI leadership. In 2025, Waystar Altitude AI prevented more than $15,000,000,000 in denials for our clients, reduced appeal time by 90%, and drove double-digit increases in denial overturn rates. We launched new agentic capabilities that cut documentation analysis by 40%, powered by data from one in three U.S. hospital discharges and more than 7,000,000,000 annual transactions. These results demonstrate accelerating demand for mission-critical AI revenue cycle software and validate Waystar Holding Corp.'s ability to deliver meaningful ROI for providers. I am proud of what our team accomplished in 2025. We entered 2026 with strong momentum, a clear leadership position, and a platform we built to sustain durable, profitable growth while delivering exceptional value to our clients. Let me walk through our fourth quarter performance. Q4 revenue reached $304,000,000, growing 24% year over year and 12% organically. Both subscription and volume-based revenue contributed to this strength. These results underscore the mission-critical nature of our platform, elevated patient utilization, and the successful onboarding of new clients. Waystar Holding Corp. added 85 clients with trailing twelve months spend above $100,000, up from 30 a year ago and more than double last quarter. Win rates improved beyond our historical average of more than 80%, reflecting sustained competitive momentum and clear provider preference for Waystar Holding Corp.'s cyber-secure unified platform. We delivered a 112% net revenue retention with 97% gross revenue retention and a net promoter score above 70. Cross-sell and upsell momentum in our large installed base drove this performance and reinforces how deeply Waystar Holding Corp. is embedded in our clients' daily operations, serving as the central infrastructure for getting paid. Waystar Holding Corp. delivered a record bookings quarter in Q4, and we closed several sizable deals to cap off a strong 2025. We enter 2026 with a robust sales pipeline and the largest implementation backlog in our history. This demand signals strong customer confidence in our platform and reinforces our conviction in the durability of our low double-digit long growth outlook. Adjusted EBITDA reached $129,000,000, up 29% year over year, with an adjusted EBITDA margin of 42.5%, exceeding our long-term target of 40%. Waystar Holding Corp. continues to operate as a rule of 50 business, pairing strong revenue growth with increasingly efficient operations. Our core business delivers durable organic growth. Iodine extends that strength through disciplined platform expansion, moving Waystar Holding Corp. into the mid-cycle, a critical stage where payers deny roughly 60,000,000 claims each year. Together, we deliver full revenue cycle visibility through our unified financial and clinical platform. Iodine adds more than 1,000 hospitals and health systems with only 35% customer overlap, expanding our addressable market and cross-sell opportunity. Integration is ahead of plan, and we now expect to realize over 90% of committed cost synergies in fiscal 2026. We fully integrated our commercial teams and they are already producing results. In Q4, we generated cross-sell traction in both directions and built a robust new business pipeline. Market demand for the Waystar Holding Corp. platform is strong. Unified financial and clinical data unlocks unique value and accelerates our innovation roadmap. Our next-generation prebill anomaly detection solution demonstrates this opportunity. We expect a midsized health system to recover $7,000,000 annually in previously missed reimbursement, a 5x return over three years. This is the first of many innovations only our integrated platform can deliver, advancing us toward a fully autonomous revenue cycle, including using clinical data to prove medical necessity for prior authorization and overturn denials requiring clinical documentation, all without human intervention. Now let me take a broader view on AI because it is core to who we are and where we are headed. While many new AI entrants add lightweight tools that sit on top of fragmented revenue cycle workflows, Waystar Holding Corp. takes a fundamentally different approach. Our end-to-end platform gives us full visibility across the revenue cycle, including authorizations, claims, denials, and payments, and deep into the layers where complexity resides: payer policy, adjudication logic, diagnosis-related grouping, and denial reasoning. This breadth and depth makes Waystar Holding Corp. the system of action, identifying issues upstream, resolving them inside the workflow, and closing the loop on payment with minimal human intervention. For more than a decade, Waystar Holding Corp. has deployed AI, including machine learning and advanced decisioning engines across revenue cycle workflows at scale, grounded in proprietary data and embedded processes few in the industry can match. We are extending those capabilities with LLMs, generative and agentic AI, while maintaining control of the data, decisioning logic, and outcomes that matter most to providers. Today, approximately 50 of our solutions leverage AI, and nearly 40% of our revenue is driven by AI embedded in mission-critical reimbursement workflows. In 2025, roughly 30% of new bookings came from AI-powered capabilities. This signal is clear. Clients trust Waystar Holding Corp. to deliver AI that goes beyond assistance to enable agentic, outcome-driven revenue cycle automation. We believe Waystar Holding Corp. is well positioned to lead the next era of health care revenue cycle automation. The foundations of software moats are shifting in the age of AI, from workflow stickiness and switching costs to a new set of structural advantages. Our strength comes from four interconnected pillars: mission-critical infrastructure, unmatched proprietary data, an extensively deployed network and scale distribution paired with deep domain expertise. First, our platform is the mission-critical infrastructure providers need to get paid. Waystar Holding Corp. is embedded directly in the flow of dollars, decisions, and denials, and our 97% gross revenue retention proves it. Once clients implement Waystar Holding Corp., they stay. We reduce administrative burden, prevent billions in avoidable denials, accelerate cash flow, and ensure reimbursement accuracy at scale. Our commercial model is aligned with consumption, which is a function of providers seeing patients. As agentic AI streamlines workflows and reduces manual work, the durability of our model strengthens. Pricing is tied to claims, payments, or prescribing providers, directly matching how value is created in the revenue cycle.

Our multiyear partnership with Google Cloud

Gemini LLM accelerates innovation and we retain control of the data, decisioning, and outcomes providers care most about. As RCM moves toward agentic AI and autonomous workflows, our role deepens. Our agents act on behalf of providers, resolving issues, correcting errors, and closing the loop on payment. Second, Waystar Holding Corp. has an unmatched proprietary data advantage. AI strength ultimately comes down to data: its scale, richness, structure, and proximity to action. We operate one of the largest health care payment datasets in the United States, processing more than 7,000,000,000 transactions annually. With Iodine, we pair that financial depth with unmatched clinical data, and our models now learn from approximately one third of U.S. hospital discharges each year. We deploy AI across the full revenue cycle continuum, from authorization and eligibility to denials and appeals. Our data advantage is self-reinforcing. Every claim, denial, and payment improves our models. When a provider uses Waystar Holding Corp., they benefit from the learnings of tens of thousands of organizations like theirs: similar size, similar payer mix, similar challenges. And because our data spans the full care continuum—hospitals, physician practices, outpatient surgery centers—our models see patterns no single organization or new entrant can match. General purpose model vendors lack this real-time closed-loop proprietary data. Third, Waystar Holding Corp.'s platform is a deeply deployed multisided network, creating scale and connectivity that others cannot replicate. We sit at the center of the payer-provider-patient ecosystem, connecting over 1,000,000 providers to every major payer, powered by more than 100,000 live integrations across EHRs, practice management systems, clearinghouses, and clinical platforms. We touch approximately 60% of the U.S. patient population each year and process billions of dollars in patient payments across our network annually. We built this network over more than a decade. It represents scale, trust, and connectivity that cannot be bought or quickly engineered. Every transaction flowing through Waystar Holding Corp. increases network intelligence, sharpens model accuracy, and expands our distribution advantage—the result: a platform that strengthens continuously with every client we serve and every workflow we power. Fourth, Waystar Holding Corp. combines scale distribution with deep domain expertise. We serve providers across all care settings with low concentration; our top 10 clients represent approximately 11% of revenue, driving resilience, reach, and durable bookings growth. Our go-to-market organization consistently delivers strong win rates, rapid time to value, and compelling client ROI. Forward-deployed teams—product management, revenue integrity, clinical documentation, and client success experts—work directly alongside real workflows. Dozens of clients co-develop and pilot new AI capabilities with us, validating outcomes before broad release. We have already seen our AI-enabled engineering tools reduce manual work, in some cases by more than 75%, and we expect further improvement as we scale these capabilities in 2026. These pillars enable our AI to deliver outcomes at scale. In less than a year, Waystar Altitude AI has prevented $15,000,000,000 in denials and accelerated appeal package generation by 90%, turning work that once took days into minutes. Our network consistently achieves approximately 99% clean claim and first pass acceptance rates, driving faster, more accurate reimbursement. These outcomes expand our footprint, build trust, and help providers improve margins while freeing staff for higher-value work. Last month, we shared our vision for Waystar Holding Corp.'s autonomous revenue cycle—a dynamic, end-to-end agentic network that acts continuously within workflows, learns from outcomes, and delivers meaningful financial results with minimal intervention. Providers do not want point solutions. They need trusted cybersecurity platforms that unify financial, clinical, and operational outcomes. Our product roadmap is robust, and we expect to launch several new AI agents this year on Waystar Holding Corp.'s platform. We have the data, the deployment, the distribution, and the discipline to lead this next era of health care revenue cycle automation. We are moving with the urgency and the mindset of a disruptor because this moment demands nothing less. With that, I will turn the call over to Steve.

Thanks, Matthew.

Note that my comments regarding fourth quarter and full year 2025 results

include a full quarter of contribution from Iodine. Revenue increased 24% year over year in the fourth quarter to $304,000,000. Organic revenue grew 12%,

and Iodine contributed $31,000,000 in the quarter, slightly ahead of our previously communicated expectation.

The growth reflects strong client retention and expansion, healthy patient utilization of the health care system,

and new client implementations. The quarterly results highlight our durable, predictable model of low double-digit revenue growth annually on a normalized basis, and the highly recurring volume aspect of health care provides us predictability,

creating a notable differentiation compared to most consumption models. For the full year,

revenue increased 17% year over year to $1,100,000,000. On an organic basis, revenue increased 13%, consistent with our long-term target of low double-digit growth. Clients generating more than $100,000 of LTM revenue increased by 85 in the fourth quarter, to 1,391 at quarter end, an increase of 16% year over year.

Roughly one half of the increase in the fourth quarter from the inclusion of Iodine clients. On an organic basis, the year-over-year growth rate is consistent

with the quarterly average over the past three years. Our net revenue retention rate, or NRR, was 112% for the last twelve months, compared to 13% organic growth rate over the same period.

As we have discussed over the past several quarters,

NRR benefited from the rapid time to revenue from clients impacted by a competitor's cyber event in early 2024. Subscription revenue of $168,000,000 for the fourth quarter increased 38% year over year and 25% sequentially. On an organic basis, subscription revenue grew sequentially at a similar pace as the past few quarters.

From a mix perspective,

subscription revenue was 55% of total revenue, which aligns with previously communicated expectations. For the full year, subscription revenue of $558,000,000 increased 22% year over year.

Volume-based revenue of $134,000,000 for the fourth quarter increased 11% year over year and 1% sequentially. Consistent with our seasonality expectations, revenue from patient payment solutions was lower than the prior quarter,

this was more than offset by sequential growth from provider solution volumes. For the full year, volume-based revenue of $535,000,000 increased 11% year over year with steady double-digit growth from both provider solution transactions and patient payment dollars.

Adjusted EBITDA was $129,000,000 for the fourth quarter at a 43% margin and increased 29% year over year. On a full-year basis,

adjusted EBITDA was $462,000,000 at a 42% margin and increased 21% year over year. Our adjusted EBITDA margin of 43% for the fourth quarter benefits from approximately $2,000,000 of realized acquisition cost synergies, reflecting 1% of margin improvement for the quarter.

Turning to the balance sheet and cash flow. We ended the quarter with $86,000,000 in cash, equivalents, and short-term investments, and $1,500,000,000 in gross debt. Unlevered free cash flow is $80,000,000 in the fourth quarter and $365,000,000 for the full year. We converted 79% of adjusted EBITDA to unlevered free cash flow, enabling us to continue sustained deleveraging.

As of December 31, net leverage was three times, which is down almost a half turn since the beginning of the quarter when we closed the Iodine acquisition. We expect to run the business at or below a three times leverage ratio and delever in line with our historical rate of approximately one turn annually.

We continue to maintain flexibility within our overall capital structure, and our allocation priorities remain unchanged.

Invest in the business to drive top-line growth, evaluate disciplined acquisition opportunities, and explore ways to enhance shareholder value. Looking ahead to 2026 full-year guidance, we expect revenue of $1,274,000,000 to $1,294,000,000, with a midpoint of $1,284,000,000, representing 17% year-over-year growth.

Our full-year guidance at the midpoint assumes normalized organic growth of approximately 10%, with a similar implied growth rate for Iodine.

We also expect revenue to grow 1% to 3% sequentially throughout the year, with the third quarter at the low end due to seasonality of patient payments. Further,

we assume utilization of the health care system by patients remains healthy throughout 2026, as the diversity of our client base,

and ROI from our solutions insulate us from the reimbursement rate pressures that may impact our clients. Lastly,

as Matthew mentioned,

the record level of bookings and several sizable deals we generated this quarter contribute to our forward visibility. As a reminder, these larger agreements typically take six to eighteen months to fully ramp.

And we would expect many to land towards the longer end of that range.

Supporting our confidence in a normalized low double-digit revenue growth profile

for 2026 and beyond. Please note that we have included a bridge from the 17% growth rate at the midpoint of guidance

to the 10% normalized organic growth rate in the IR deck on our website. We expect adjusted EBITDA of $530,000,000 to $540,000,000, with a midpoint of $535,000,000, representing 16% year-over-year growth and a margin of approximately 42% for 2026.

This includes gross margins of approximately 68%.

Which is consistent with 2025. The 42% margin also includes an uplift of approximately 1% from realizing acquisition cost savings. Said differently, we expect to realize approximately $14,000,000 of savings in 2026, which is over 90% of the committed $15,000,000 we previously communicated and well ahead of the prior timeline. This reflects our commitment to quickly and successfully integrate Iodine. We are focused on reinvesting in the business in key areas we expect to drive long-term top-line growth and remain confident in our ability to do so while being mindful of our long-term adjusted EBITDA margin target of 40%. This concludes our opening remarks. With that, we are ready for your questions. Operator, please open up the call.

Certainly. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. In the interest of time, please limit yourself to one question. Our first question will be from Brian Christopher Peterson of Raymond James. Your line is open.

Congrats on the quarter. Matt, maybe I want to start off on AI, and I appreciate all the color you gave, the advantages you have in an AI world. But I wanted to understand, when you talk to your customers and say, looking at RCM specifically, what is their appetite to use LLMs and build on their own versus buy from somebody like Waystar Holding Corp.? I just wanted to understand how those conversations are going and how you can unlock some of that AI opportunity over the long term. Thanks, guys.

Okay. And one moment for our next question. Our next question will be coming from Elizabeth Hammell Anderson of Evercore ISI. Your line is open. Hey. I will just let you respond to Brian's question, and then I can go. Please stand by.

Because we are muted. I do not understand. You are not muted.

Your line is open.

Okay. Can you hear us okay?

Yes. We can hear you.

Excellent. Let me go back to Brian's question about AI. I appreciate his comments regarding our quarter and also our position and our strength and the opportunity that we see in front of us to win in the delivery of AI. I would note that the vast majority of clients we talk to would rather integrate AI capability into their systems of record or action that run the backbone of their business. And while there is some experimentation willingness and some exploration around how we can deploy AI or do some type of science experiment within our organization, what we see is the vast majority of providers want to work with a trusted partner where they have a history of deploying AI in a cybersecurity environment that is integrated and interoperable with other systems that they are utilizing. And quite frankly, most provider organizations do not have the abundance of engineering talent that they need to test and deploy AI, and it really is not true to their core competency of taking care of patients. So we feel like Waystar Holding Corp. is very well positioned to deliver AI as we have done so far and to continue that track record. Thank you, Brian, for the question, and sorry for the sound confusion.

Hey, guys. It is Elizabeth from Evercore now. Thanks for the question. You have mentioned several new AI agents launching this year. How do you think about that launching? Are those individually incremental revenue opportunities for Waystar Holding Corp. or combined with Iodine too? Or is that something that you see as helping to increase the moat of your current AI offering, or maybe some of both? Thank you.

I believe it is a bit of both, Elizabeth. We are very excited about the product roadmap that we have in place, what we have ahead of us as far as delivering agentic capability to our clients and on our platform. Some of that will be brand new. It will be a new SKU with new price to value, reflective of the value that that agent is delivering to our clients. Other AI capability will add on to existing software modules that will bring incremental automation, and we are excited about that as well. As we think about monetization in general, the way to think about monetization of AI is this.

First,

if we deliver AI, it tends to drive retention and an elongation of a relationship with the client. So that tends to show up in strong retention results like the ones that we produce. We also can impose an annual price increase that is reflective of the value that we deliver. And in this case, we are watching closely and seeing that when AI delivers incremental automation, we are able to reduce

headcount.

associated with a manual task that is now automated given the agent capability that we launched. We have the opportunity to price to value in that setting. And then the third, as I mentioned a moment ago, is the introduction of a new SKU, a new pricing, putting it in the hands of our go-to-market teams and selling it that way. So we look forward to further monetizing AI, but a lot of that is already showing up and monetizing through our core business model.

Great. Thank you very much.

And our next question will be coming from Kevin Caliendo of UBS. Your line is open, Kevin.

Hi. Thanks for taking my question. Just looking at the fourth quarter, you had G&A, R&D, D&A all stepped up. I am assuming that is largely Iodine coming into the numbers. And I appreciate you gave us the $14,000,000 in expected synergies to get to the margin guidance for the full year. Should we look at the Q4 margin as the run rate for those individual cost centers and take out the synergies? I am just trying to think about modeling the margins and where you might have additional leverage above and beyond that $14,000,000 in synergy, thinking through the fourth quarter?

Yes, Kevin. Thanks for the question. This is Steve. I think to answer your first part of that question, you are correct. The step up there does include the additional cost of one full quarter of Iodine. As you think about the guide for 2026, a couple of things to think about, and as mentioned in the prepared comments, we would expect similar gross margin in the high 60s for 2026 as we saw in 2025. In addition, to your point, there are opportunities that we are continually focused on to improve the overall margin profile. We have set guidance at the midpoint of about 42%

EBITDA. Sorry.

of 42% for 2026, which includes about 1% benefit from those cost synergies. And again, we are continuing to look and will find additional opportunities for cost savings. So that does exist. But right now, the focus, from a capital allocation approach, and I mentioned it in the prepared comments, is to continue to reinvest in the business for long-term revenue and growth expansion. We have set the target, and we have probably beat it for the drum for quite a while now, low double-digit revenue growth, long-term target. But obviously, the opportunities we see in front of us—how do we reinvest now to expand that ultimately in the years going forward.

Thank you.

And our next question will be coming from Ryan McDonald of Needham & Company. Your line is open, Ryan.

Hi, thanks for taking my question. Congrats on a great quarter. I would be curious, Matt, as you are having customer conversations, you talked about, obviously, there are a lot of new vendors in this space that are trying to overlay generative AI functionality on top of their existing systems versus your approach, which obviously is deeply integrated and built in an end-to-end platform. As you look at how budgets are being developed and being allocated, are you seeing more demand or conversations heading towards one-off, more point solution functionality or SKUs from a generative AI perspective? Or is this creating a broader refresh cycle where we might look at a full end-to-end modernization within RCM, and how do we think those conversations develop over the next twelve to eighteen months? Thanks so

Yes. Thank you, Ryan. We are not necessarily seeing a clear delineation between a normal technology budget and an AI-specific budget. We are seeing willingness from clients to embrace AI. And again, speaking to the prepared remarks, they want to consume AI, but they want to do it in a very thoughtful way. I point to our recent Q4 results: the best quarter in our history, a really nice mix of new clients, cross-sell opportunities, AI embedded in those conversations, and we have, as we start 2026, a very robust pipeline of opportunities. And what we are seeing is not necessarily just a point solution willingness. We are seeing clients wanting to embrace, to your proper question, Ryan, more and more of the platform approach where there is an assumption that AI will be included in part of that platform. If you looked at our last two quarters of bookings in 2025, the number of $1,000,000-plus bookings in the last two quarters of 2025 were more than two times the quarterly average of the past three years. And so what this signals to us is that our platform approach is working. It is displacing, oftentimes, point solutions and multiple vendors, and there is willingness by clients to embrace and explore AI in that context. We do not necessarily see that being purely partitioned as a separate budget.

And our next question will be coming from George Robert Hill of Deutsche Bank. Your line is open, George.

Yes. Good morning, guys, and thanks for taking the question. I guess, Steve, I would ask you to break apart Iodine a little bit. The business did $31,000,000 in the fourth quarter. The back-of-the-napkin math looks like you are guiding to $125,000,000 to $130,000,000 for full year '26. So I guess it implies a little bit of flattening there. I know that you guys are historically conservative as it relates to guidance. I would like you to talk about that a little bit. And then maybe, Matt, the question that goes with that is, what do you feel like you are seeing for AI market growth in the health care space? I know that health care has historically been slow to adopt new technology solutions. It would seem like the macro AI market may be growing faster than the AI market in health care, which is probably to talk about those dynamics. Thank you.

Yes. George, I will go first. We did, in the prepared comments, mention we expect an Iodine year-over-year growth rate to be similar to the 10% normalized organic growth rate that we set aside, or I commented on, for Waystar Holding Corp. for 2026. So I think our expectation would be a little higher than what you had mentioned, but somewhat in the ballpark there. And I think we see really good opportunities as it pertains to the totality of the solution set from the bookings that we saw in the fourth quarter that Matthew had mentioned, and especially as we think through the $1,000,000-plus bookings, the metric that Matthew had provided. Maybe I will just give a little bit more color on that before turning it to Matthew to answer the second part of the question because I figured you guys are going to ask at some point. Maybe to put a range for you on the account for the Q4 and Q3 $1,000,000-plus bookings number, that was in the 15 to 20 count range for each of the individual quarters. And as Matthew had indicated earlier, that is two times the amount we had typically seen on a quarterly basis for the past three years. So a healthy mix of both Iodine legacy Iodine solutions

in that fourth quarter number as well. Matt?

Yes. Great.

George, and let me speak to the general question about AI. We feel like it is the biggest opportunity in our lifetime, and we are seizing it and making the most of it. What I would say is LLMs are great tools, and they are needed. And specific to health care, it is time for the industry to embrace technology, perhaps instead of services and manual work that has taken place for far too long. We see curiosity and interest there. This underscores, when you think about the LLMs in general, how important it is for us to have this now multiyear relationship with Google. I think we talked about our relationship with Google's LLM even a couple years ago in 2024 on one of our earnings calls. And we are delivering AI, and I think there is some real interest. A few thoughts come to mind. While some software may be displaced by AI, other software platforms like Waystar Holding Corp. are actually being strengthened, and AI is accelerating our ability to deliver capability. It is delivering strong results for our clients, and that is very important. I think trust, reliability, and scalability matter more than ever, especially in regulated environments like health care. Production-grade software has to be secure, scalable, and accurate.

And

so we are really grateful for the relationship that we have with Google. As I think about the things that are required, a few things to keep in mind with respect to the mission-critical problems within the revenue cycle. I will not opine broadly on health care. But just within the mission-critical problems in revenue cycle management, there are a number of things that are required. First, it is required to have

rich and real-time proprietary data. Not

publicly available data.

And

you need a payment source of truth. And we have that at Waystar Holding Corp. What else is required? Well, cybersecurity is required when you are thinking about deploying AI. Regulatory compliance is required. Deep subject matter expertise is required. Deep integration and connectivity, strong distribution, and client trust are required. And so when you think about this opportunity that we are seeing in health care, LLMs by themselves cannot deliver those things. But companies can. Companies like Waystar Holding Corp. can, so we are excited about the AI opportunity before us.

And our next—excuse me. Our next question will come from Steven James Valiquette of Mizuho Securities. Your line is open, Steven.

Yes. Good morning. Thanks for taking the question. I was curious if you could provide a little more color on your assumption around the utilization of health care by patients to remain, you said, I think, healthy throughout 2026. How should we think about that in the context of your historical baseline assumption of that 1% to 2% that you have talked about previously? Thanks.

Yes, Steven. This is Steve. We have been on the higher side of that 1% to 2% historically. That aligns with what we have seen coming through the fourth quarter and the prepared comments as well that I made surrounding that. And we would expect continued nice healthy growth in both that volume-based aspect as it pertains to both patient payments revenue, which has historically been about 30% of our total revenue—mixing Iodine in going forward, it probably gets closer to 25%—but also then from those provider solutions, as Matthew had mentioned in the prepared comments, the transaction volumes that come from processing claims, eligibility checks, etc. So hopefully, that is helpful commentary.

Yes. That is helpful. Thank you.

And our next question will come from Alexei Gololobov of JPMorgan. Your line is open.

Hello, everyone. Thank you for letting me ask a question. I was wondering if you can double-click on some of the comments you made last quarter about the timeline for patients meeting their deductibles, which impacted the patient volumes that we see you just talked about. What trends did you see at the end of Q4, and maybe how are you thinking about 2026?

Yes. Certainly, Alexei. We did see sequential decrease from Q3 to Q4 as patients on high deductible health plans continue to hit their deductibles. That was more than nicely offset by the volumes coming through the provider solutions aspect of the business that led to less of an impact Q3 versus Q4 than we would have expected in the commentary that we had made last quarter. As we think about that aspect into 2026, I provided some commentary surrounding quarterly sequential growth expectation. As you hit on, Alexei, typically, with that 30% of revenue from patient payment solutions now getting closer to 25% going forward, we typically see a first half, second half of the year dynamic. Obviously, with the change in revenue mix, we would expect that to be not as notable as prior years. And we would expect nice sequential growth throughout the quarters in 2026. I mentioned a range of sequential growth of 1% to 3%, with calling out specifically the third quarter of the year being closer to that 1% of the range, and that is typically due to the dynamic expectations of over the past number of years, we typically see those patients that are on high deductible health plans start to hit those deductibles in the second half of the year, tend to see it most notably between the second and third quarter. So that is contextually a little bit more detail surrounding the sequential growth expectations in 2026.

Appreciate it, Steve. And our next question would be

will be coming from Allen Charles Lutz of Bank of America. Allen, your line is open.

Good morning, and thanks for taking the questions. Matt, you mentioned 35% of bookings are now coming from AI-related products. You are speaking to these health system customers and prospects, and they are exploring AI. Does this, in your conversation, make them more hesitant to spend in the near term because they are trying to figure out where they want to put dollars to work? Or is this actually accelerating total spend? And I guess I am asking that question in the context of what you saw in the fourth quarter and how you think about 2026. Thanks.

Yes. What we see is some constants. First, decision makers want efficiency. They want cost takeout. They want cybersecurity. They want to work with partners that can help them get paid faster, accurately, and efficiently. And so within that, what we are seeing is we continue to get prioritized in their decision-making process because the revenue cycle is mission critical. It is truly mission critical.

And

you take a system of record, system of action like Waystar Holding Corp.'s, it is easier for clients to think through how do we work with Waystar Holding Corp. to deploy more AI. Obviously, very interested in using AI because it can drive efficiency, reduce cost, and drive automation—those things we talked about. And so where we tend to focus is on the ROI nature of the conversation. That is what is driving these types of record bookings and strong pipeline of opportunity. We highlight the fact that our prior authorization, for example, is 90% touchless and

can

actually do the work that previously it took 12 employees to do in a mid-sized hospital. We highlight the fact that our Coverage-to-Care solution, which also uses AI capability, is helping to discover more than $20,000,000 of incremental insurance coverage to help aid these hospitals’ reimbursements, and that is in a typical-sized setting. We also highlight things like—I will give you one more example—for our digital patient payments and patient financial care suite, we use AI to help automate and create self-service for 80% of the patients that are interacting with our digital payment suite,

and

that is lifting patient payments by 20% because we are driving better patient payment plan adherence. That typically is finding more than $8,000,000 of annual impact for a typical hospital. So these are the types of things that we highlight as we go and engage with clients, where they know they are going to be able to use AI in a setting, in a platform that they trust. That is why you are starting to see it show up in the bookings the way that we are.

And our next question will be coming from Ryan Scott Daniels of William Blair. Your line is open, Ryan.

Good morning. Thanks for taking the question. Maybe just sticking with questions about AI and the competitive landscape. A lot of the color you provided today so far has been incredibly helpful, but maybe to dig in a little further on the competitive landscape, when you are presenting your ROI, are you hearing any feedback from your customers about the competitive nature of some of the ROI that these other platforms are potentially offering, or these other solutions—maybe not necessarily platforms—that they are offering? How should we think about your ROI versus what maybe others are putting out there? Well, we will not disclose exactly what our ROI is. What I will say, Ryan, and thank you for the question, we have a very robust ROI calculator. We go through and go through a rich discovery process with clients, and we present to them a platform. Oftentimes, as you have heard us talk in the past, there is a compounding benefit when a client uses more and more of our solutions together on the platform. Again, those solutions are AI-infused, AI-enabled, and are driving tremendous results. I am sure that those clients are going through a process of

comparing what

Waystar Holding Corp. offers versus what an upstart or a newcomer or a point solution may offer. But I think what stands the test of time and what we are seeing is really robust win rates. We noted improvement in the quarter above our strong 80% win rates. We noted that even higher in the last little bit. And so we feel like our ROI is very compelling,

and

more and more clients are buying into this idea of the importance of a platform approach as they begin, and they want to consume AI on a platform.

Our next question will be coming from Ryan Scott Daniels of William Blair. Your line is open, Ryan.

Yes. Thanks for taking the question. Matt, maybe a

strategic one for you on AI and the improvements you are seeing in the platform, especially with Iodine and their solutions and data assets. You have talked about the perfect claim, and I am curious if this can provide you with a contracting advantage longer term strategically where you can go in with a fully integrated platform but maybe increase the total value add, maybe share in some of those savings. So are there any potential thoughts on risk-based contracts or tying to other KPIs you know you can improve on an accelerated basis and maybe see not only a win rate delta from doing that versus some of your peers but also maybe greater revenue enhancement or an accelerated timeframe with novel contracting? Thanks.

Thanks, Ryan.

Appreciate that thoughtful question as well. You know, we talk a lot at Waystar Holding Corp. about building the autonomous revenue cycle platform. This dynamic, end-to-end agentic network that acts continuously within workflows, learns from outcomes with real sources of payment truth, and then delivers the perfect, undeniable claim—real financial results with minimal intervention. It is on our roadmap. We have teams of people focused on how we create, with minimal intervention, this environment where we keep a human in the loop appropriately as AI continues to learn from our massive proprietary data. How do we march toward that perfect, undeniable claim? We are absolutely willing to explore some performance-based pricing opportunity in this space. It is something that we will not talk a lot about in the public domain here, but it is something that we contemplate internally as we think about how to price to the value that we are delivering to our clients.

And our next question will be coming from Brian Scott Daniels of William Blair. Your line is open, Brian.

Hey, good morning, guys, and congrats on the quarter. I really appreciate all the comments today, Matt. But as I think about

you talked about how important the platform is and the one-stop shop approach from your clients. One question we are getting a lot is when we think of the traditional EHR players or vendors trying to build AI capabilities that touch into RCM, how do you think about that? And maybe how does the clearinghouse factor into that decision, which platform your clients—these hospitals or provider groups—would build on when they choose the one-stop shop solution going forward? Thanks. Right. Yes.

Thanks for the question, Brian. We are very focused on revenue cycle,

clearinghouse,

successful payment. And so as you know, we connect to over 500 different instances

of

practice management and electronic health systems, including some of the largest in the United States. We have not seen a successful test or result of anybody creating an EHR system and creating a clearinghouse. It tends to be a different development motion, a very different set of capabilities required to build and sustain a network. We have been building Waystar Holding Corp.'s

cloud-native modern clearinghouse

for over a decade. And we monitor it and pressure test it and update it continuously,

intradaily.

That is very different from developing an electronic health record solution or a practice management system, quite frankly. And so as we stay focused

on

our platform, and being highly interoperable and deeply deployed with all the electronic health record systems in the market, we think that is the winning approach. We can specialize in what we are doing. We can be a linchpin solution to those EHR systems and a great partner to our clients in helping them get paid.

And our next

will be coming from Richard Collamer Close of Canaccord Genuity. Your line is open, Richard.

Yes. Thanks for the question. Congratulations on the year. Just

maybe a little bit more on the AI, and

OpenAI, Cloud for Healthcare, both had some notable organizations listed in their press releases on the launches, like HCA, Boston Children’s, Stanford, and some, I assume, are Waystar Holding Corp. clients. I am just curious what your thoughts are. Do you see situations where clients will have multiple vendors for certain AI functionality, meaning it is not necessarily a zero-sum game, which the market seems to be pricing in? And then also just your thoughts on the health care landscape overall. There are a lot of the haves and the have-nots, and maybe some of these larger AI companies are not necessarily good fits for certain customers.

Yep.

Thank you, Richard.

I would say,

again,

it is an exciting time in health care. This is the moment of a lifetime where generative AI capability is available to hospitals and health systems and any organization. LLMs are great tools to develop and deliver features and functions. We see that internal to Waystar Holding Corp., again, as we utilize Google's LLM. What I would say is having a heterogeneous deployment of technology is not a new phenomenon in health care. It tends to not be a zero-sum game in health care. There may be some misunderstanding or a lack of appreciation for how heterogeneous health care technology is being deployed. But again, to solve the mission-critical problems that are demanded in the revenue cycle that, quite frankly, Waystar Holding Corp. solves, you have to have a deeply deployed, multisided network to connect organizations to payers and to patients. It is required to have rich and real-time data that you can use to real-time train your network so that you do not have the luxury of having a science experiment in your revenue cycle. There is a limited tolerance for any type of fault. RCM has to be 100% right; otherwise, there are penalties. There are fines. There are all sorts of other things that can go bad. So having rich and real-time data is important. Having subject matter expertise—It is tough to get all of that within one hospital or health system. Most hospitals and health systems, to your second part of your question, do not necessarily have the abundance of engineering talent that they need to build and then sustain and support AI capability. So we think the longer-term

benefit is really

what Waystar Holding Corp. can do, and vendors like Waystar Holding Corp. can do, to help deliver AI that can be consumed thoughtfully in workflows that employees understand, etc. The last thing I would say is speaking of the haves and have-nots that you highlighted, Richard, I think there are very few hospitals and health systems that have the resources to deploy AI and sustain it and manage it themselves, and meet regulatory requirements, and do all the things that you are obligated to do if you are working and using technology inside a hospital and health system. The vast majority of our clients, for example, especially on the ambulatory side, the non-hospital side,

they are

we are bringing

we are bringing equity and fairness and modern AI capability to them that they would never be able to develop by themselves. There is something really cool about that that inspires our work.

And our next

question will be coming from Michael Cherny of Leerink Partners. Your line is open, Mike. Michael.

Good morning, and thanks for taking the question.

Another AI one for me, but

along all those same lines, as you think about your role, your integration with various different

partners,

how do you make sure that your organic, inorganic R&D investments

stay on top of the curve so that you are continuing to deliver value? You are continuing to make

sure that you box out

other providers, be it purpose-built or some of these larger companies relative to their ability to try and deploy AI either to disrupt you, to intermediate you, or whatever term you might want to use. Thank you.

Yes. I would say we have talked a lot about LLM tools right now. They are good for coding efficiency. We are deploying LLM tools, as I have mentioned. We feel like basically everybody is using LLM tools.

It is the LLM advantage.

Is the use of the LLM the advantage? We would argue that you need other capability to be competitive and to deliver value to clients. So from an organic perspective, how do we stay ahead? We are investing in innovation. We are using LLM capability ourselves. We are seeing productivity gains amongst our development teams as we highlighted in our prepared remarks. We are delivering hundreds and hundreds of feature improvements in any typical quarter that help our clients achieve fantastic results. We also have a dedicated corporate development team, and we scan the market all the time to look at some of the startups that are creating novel and unique AI capabilities that may not have the distribution or the deeply deployed network that we have. We think we can be a great home for the right types of companies. But it is a very exciting time, and Waystar Holding Corp. is very motivated to continue to deliver value to our clients and to our shareholders.

I would now like to turn the conference back to Matthew J. Hawkins, CEO, for closing remarks.

Great. Okay. Thanks so much for the time and the thoughtful questions today. To summarize, Waystar Holding Corp. is executing from a position of strength. We are delivering durable growth, strong margins, and meaningful cash generation while extending our leadership in AI-powered revenue cycle automation. Our AI is not experimental. It is embedded, monetized, and delivering measurable outcomes inside mission-critical workflows our clients rely on every day. With unmatched data, deep deployment and domain expertise, strong distribution, and a disciplined operating model, we believe Waystar Holding Corp. is exceptionally well positioned to compound value over the long term. I would especially like to thank our outstanding team for their dedicated and impactful work. They are the reason that Waystar Holding Corp. continues to perform at this level. We appreciate your interest and support, and we look forward to updating you on our continued progress. Thank you, everybody.