Healthcare payment software maker Waystar brought in $313.9 million in first-quarter revenue, up 22% from the same period a year ago, as executives reaffirmed investments in artificial intelligence and innovation.
Waystar reported net income of $43.3 million and GAAP net income per share of 22 cents, according to its Q1 financial results published Wednesday afternoon. The company also reported adjusted EBITDA of $135.4 million in Q1.
The company reported non-GAAP earnings per share of 42 cents, beating analysts' estimates of 39 cents per share. Waystar's Q1 revenue also beat Wall Street analysts' estimates of $311.72 million for the quarter.
Waystar provides healthcare payment and revenue cycle management tools to 30,000 clients, representing over 1 million distinct providers, and its platform processes over 7.5 billion healthcare payment transactions.
William Blair analysts said the company outperformed Q1 results, delivering “strong results on both the top and bottom line.”
“In our view, Waystar remains a category leader in end-to-end RCM software, leveraging its competitive position and scale and advantages to enhance the platform with new innovations,” Ryan Daniels, group head of healthcare technology and services at William Blair, wrote in an analyst note.
CEO Matt Hawkins told investors during an April 29 call to discuss Q1 results that Waystar “delivered a solid start to the year,” which reflected “strong execution across the business and our innovation roadmap.”
“What differentiates Waystar is the tangible value we deliver,” Hawkins said. “Our platform is purpose-built and integrates powerful LLMs into our core workflows to drive meaningful ROI for healthcare providers, improving accuracy, reducing friction and lowering the total cost of operating the revenue cycle.”
Moreover, according to Hawkins, AI is meaningfully “expanding Waystar’s total addressable market opportunity.”
“We're building toward what we believe is the future of this industry: the autonomous revenue cycle platform,” he said.
AI-powered solutions make up approximately 50% of the company’s solutions, with nearly 40% of revenue generated by AI-embedded workflows, Hawkins said.
"AI traction is accelerating," Hawkins told investors on the call, noting that AI-powered capabilities drove roughly 40% of new bookings in Q1. "Our clients leaned into the platform for prevention, automation and visibility rather than downstream rework," he said.
Waystar is pivoting its focus from task-level automation toward agentic workflows. "That shift unlocks a much larger opportunity, the approximately $100 billion in annual revenue cycle labor services performed across the industry today. We believe we are well-positioned to automate a meaningful portion of this labor pool through new AI-powered capability launches like denials, prior authorization and recoupment," Hawkins said during the earnings call.
Waystar leadership reiterated volume trends flagged by providers and payers in Q1, with lower patient volume trends given a weaker-than-expected flu season, winter storms and policy headwinds like the
expiration of the ACA subsidies, which impacted the company's volume-based revenue. But this was offset by strength in recurring subscription sales, executives said.
The company continues to “balance profitability with targeted investment” in innovation and AI solutions, including its $1.25 billion acquisition of AI-driven RCM company Idoine Software, Hawkins noted. The acquisition allows the company to leverage Iodine’s AI capabilities to further streamline administrative tasks for providers, such as utilization management and prebill revenue leakage identification.
Hawkins said the early integration is “running ahead of plan” and” continues to validate the strategic rationale of the acquisition.”
“Iodine extends Waystar into the mid-cycle where clinical intelligence plays a critical role in preventing denials and ensuring compliant reimbursement,” Hawkins said.
The company continues to roll out new generative AI capabilities and advanced automation to manage RCM workflows. Most recently, it launched an AI solution earlier this month aimed at recovering lost provider revenue from payer payment adjustments. Hawkins told Fierce Healthcare the tool reduces reconciliation time by more than 80% and provides 100% visibility into payer recoupments.