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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 6, 2024

 

Waystar Holding Corp.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware 001-42125 84-2886542

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

1550 Digital Drive, #300

Lehi, Utah 84043

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (844) 492-9782

 

Not applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of
each class
  Trading
Symbol
  Name of each exchange
on which registered
Common Stock, par value $0.01 per share   WAY   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

 

On November 6, 2024, Waystar Holding Corp. (the “Company”) issued a press release announcing earnings and other financial results for the fiscal quarter ended September 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

The information in this Item 2.02, including the corresponding Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
   
99.1   Waystar Holding Corp. Press Release, dated November 6, 2024
104   Cover Page Interactive Data File (embedded within Inline XBRL document)

 

 


 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned hereunto duly authorized.

 

Date: November 6, 2024 Waystar Holding Corp.
     
  By: /s/ Matthew R. A. Heiman
  Name: Matthew R. A. Heiman
  Title: Chief Legal and Administrative Officer

 

 

EX-99.1 2 tm2427703d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

  

 

Waystar Reports Third Quarter 2024 Results

 

Revenue growth of 22% year-over-year

 

Net income of $5.4 million and non-GAAP net income of $25.3 million

 

Net income margin of 2%; Adjusted EBITDA margin of 40%

 

LEHI, Utah and LOUISVILLE, Ky., November 6, 2024 — Waystar Holding Corp. (Nasdaq: WAY), a provider of leading healthcare payment software, today reported results for the three-month period ended September 30, 2024.

 

“Waystar delivered another quarter of strong top-line growth,” said Matt Hawkins, Chief Executive Officer of Waystar. “Our revenue reached $240 million, representing 22% year-over-year growth, an acceleration from our 20% growth last quarter. As providers prioritize ways to get paid faster and more efficiently, we are investing in AI-driven automation across our cloud-based software platform to drive tangible client return on investment.”

 

Third Quarter 2024 Financial Highlights

 

· Revenue of $240.1 million, up 22% year-over-year

· Net income of $5.4 million, GAAP net income per share of $0.03, and net income margin of 2%

· Non-GAAP net income of $25.3 million and non-GAAP net income per diluted share of $0.14

· Adjusted EBITDA of $96.7 million and Adjusted EBITDA margin of 40%

· Cash flow from operations of $79 million and Unlevered Free Cash Flow of $89 million

 

Key Metrics and Revenue Disaggregation

 

· 1,173 clients contributed over $100,000 in LTM revenue, up 14% year-over-year

· A net revenue retention rate (NRR) of 109%

· Subscription revenue of $118.0 million, up 16% year-over-year

· Volume-based revenue of $120.7 million, up 28% year-over-year

 

 


 

Financial Outlook

 

As of November 6, 2024, Waystar provides the following guidance for its full fiscal year 2024.1

 

· Total revenue is expected to be between $926 million and $934 million

· Adjusted EBITDA is expected to be between $374 million and $378 million

· Non-GAAP net income is expected to be between $47 million and $50 million

· Diluted non-GAAP net income per share is expected to be between $0.30 and $0.32

 

Webcast Information

 

Waystar's financial results will be discussed on a conference call scheduled at 4:30 p.m. Eastern Standard Time today, November 6, 2024. 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 November 6, 2024 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.

 

 

1 We have not reconciled the forward-looking Adjusted EBITDA, non- GAAP net income, and non-GAAP net income per share guidance included above to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), transaction-related expenses, and certain fair value measurements, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

 

 


 

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, and costs related to amended debt agreements. 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.

 

Our count of clients who generate more than $100,000 of revenue is based on an accumulation of the amounts invoiced to clients over the preceding twelve months. The invoices for acquired clients are included starting in the first full calendar quarter after the date of acquisition.

 

Forward-Looking Statements

 

This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current views with respect to, among other things, statements regarding Waystar’s expectations relating to future operating results and financial position, including full year 2024, and future periods; anticipated future expenses and investments; our industry, business strategy, goals, and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity, and capital resources and other financial and operating information. Forward-looking statements include all statements that are not historical facts. These statements may include words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” “outlook,” the negative version of these words or similar terms and phrases to identify forward-looking statements in this press release, including the discussion of outlook for full fiscal year 2024.

 

 


 

The forward-looking statements contained in this press release are based on management’s current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, and projections will result or be achieved. The following factors are among those that may cause actual results to differ materially from the forward-looking statements: our operation in a highly competitive industry; our ability to retain our existing clients and attract new clients; our ability to successfully execute on our business strategies in order to grow; our ability to accurately assess the risks related to acquisitions and successfully integrate acquired businesses; our ability to establish and maintain strategic relationships; the growth and success of our clients and overall healthcare transaction volumes; consolidation in the healthcare industry; our selling cycle of variable length to secure new client agreements; our implementation cycle that is dependent on our clients’ timing and resources; our dependence on our senior management team and certain key employees, and our ability to attract and retain highly skilled employees; the accuracy of the estimates and assumptions we use to determine the size of our total addressable market; our ability to develop and market new solutions, or enhance our existing solutions, to respond to technological changes, or evolving industry standards; the interoperability, connectivity, and integration of our solutions with our clients’ and their vendors’ networks and infrastructures; the performance and reliability of internet, mobile, and other infrastructure; the consequences if we cannot obtain, process, use, disclose, or distribute the highly regulated data we require to provide our solutions; our reliance on certain third-party vendors and providers; any errors or malfunctions in our products and solutions; failure by our clients to obtain proper permissions or provide us with accurate and appropriate information; the potential for embezzlement, identity theft, or other similar illegal behavior by our employees or vendors, and a failure of our employees or vendors to observe quality standards or adhere to environmental, social, and governance standards; our compliance with the applicable rules of the National Automated Clearing House Association and the applicable requirements of card networks; increases in card network fees and other changes to fee arrangements; the effect of payer and provider conduct which we cannot control; privacy concerns and security breaches or incidents relating to our platform; the complex and evolving laws and regulations regarding privacy, data protection, and cybersecurity; our ability to adequately protect and enforce our intellectual property rights; our ability to use or license data and integrate third-party technologies; our use of “open source” software; legal proceedings initiated by third parties alleging that we are infringing or otherwise violating their intellectual property rights; claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties; the heavily regulated industry in which we conduct business; the uncertain and evolving healthcare regulatory and political framework; healthcare laws and data privacy and security laws and regulations governing our processing of personal information; reduced revenues in response to changes to the healthcare regulatory landscape; legal, regulatory, and other proceedings that could result in adverse outcomes; consumer protection laws and regulations; contractual obligations requiring compliance with certain provisions of the Bank Secrecy Act and anti-money laundering laws and regulations; existing laws that regulate our ability to engage in certain marketing activities; our full compliance with website accessibility standards; any changes in our tax rates, the adoption of new tax legislation, or exposure to additional tax liabilities; limitations on our ability to use our net operating losses to offset future taxable income; losses due to asset impairment charges; restrictive covenants in the agreements governing our credit facilities; interest rate fluctuations; unavailability of additional capital on acceptable terms or at all; the impact of general macroeconomic conditions; actions of certain of our significant investors, who may have different interests than the interests of other holders of our securities; and each of the other factors discussed under the heading of “Risk Factors” in the Company’s prospectus filed with the Securities and Exchange Commission (the “SEC”) on June 7, 2024 and in other reports filed with the SEC, all of which are available on the Investor Relations page of our website at investors.waystar.com.

 

Any forward-looking statements made by us in this press release speak only as of the date of this press release and are expressly qualified in their entirety by the cautionary statements included in this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. You should not place undue reliance on our forward-looking statements. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by any applicable securities laws.

 

About Waystar

 

Waystar’s mission-critical software is purpose-built to simplify healthcare payments so providers can prioritize patient care and optimize their financial performance. Waystar serves approximately 30,000 clients, representing over 1 million distinct providers, including 18 of 22 institutions on the U.S. News Best Hospitals list. Waystar’s enterprise-grade platform annually processes over 5 billion healthcare payment transactions, including over $1.2 trillion in annual gross claims and spanning approximately 50% of U.S. patients. Waystar strives to transform healthcare payments so providers can focus on what matters most: their patients and communities. Discover the way forward at waystar.com.

 

 


 

Waystar

Condensed Consolidated Statements of Operations

(in thousands, except for share and per share data)

(unaudited)

 

    Three months ended September 30,     Nine months ended September 30,  
    2024     2023     2024     2023  
Revenue   $ 240,112     $ 197,263     $ 699,447     $ 584,315  
Operating expenses                                
Cost of revenue (exclusive of depreciation and amortization expenses)     80,545       62,922       236,188       182,578  
Sales and marketing     38,450       32,114       117,945       93,490  
General and administrative     22,704       17,365       88,794       46,524  
Research and development     11,082       8,972       37,303       25,548  
Depreciation and amortization     60,185       43,675       148,635       131,780  
Total operating expenses     212,966       165,048       628,865       479,920  
Income from operations     27,146       32,215       70,582       104,395  
Other expense                                
Interest expense     (17,752 )     (50,755 )     (122,759 )     (147,047 )
Related party interest expense     (707 )     (1,655 )     (3,425 )     (6,010 )
Income/(loss) before income taxes     8,687       (20,195 )     (55,602 )     (48,662 )
Income tax expense/(benefit)     3,274       (4,709 )     (17,398 )     (11,743 )
Net income/(loss)   $ 5,413     $ (15,486 )   $ (38,204 )   $ (36,919 )
Net income/(loss) per share:                                
Basic   $ 0.03     $ (0.13 )   $ (0.27 )   $ (0.30 )
Diluted   $ 0.03     $ (0.13 )   $ (0.27 )   $ (0.30 )
Weighted-average shares outstanding:                                
Basic     171,578,311       121,673,852       142,367,458       121,674,189  
Diluted     176,181,511       121,673,852       142,367,458       121,674,189  

 

 


 

Waystar

Condensed Consolidated Balance Sheets

(in thousands, except for share and per share data)

(unaudited)

 

    September 30, 2024     December 31, 2023  
      (Unaudited)          
Assets                
Current assets                
Cash and cash equivalents   $ 127,125     $ 35,580  
Restricted cash     17,222       9,848  
Accounts receivable, net of allowance of $5,223 at September 30, 2024 and $5,335 at December 31, 2023     137,893       126,089  
Income tax receivable     4,584       6,811  
Prepaid expenses     14,294       13,296  
Other current assets     4,315       30,426  
Total current assets     305,433       222,050  
Property, plant and equipment, net     48,017       61,259  
Operating lease right-of-use assets, net     10,214       10,353  
Intangible assets, net     1,069,696       1,186,936  
Goodwill     3,019,826       3,030,013  
Deferred costs     80,667       65,811  
Other long-term assets     6,694       6,552  
Total assets   $ 4,540,547     $ 4,582,974  
Liabilities and stockholders’ equity                
Current liabilities                
Accounts payable   $ 47,840     $ 45,484  
Accrued compensation     27,252       23,286  
Aggregated funds payable     17,092       9,659  
Other accrued expenses     11,521       10,923  
Deferred revenue     10,201       10,935  
Current portion of long-term debt     12,550       17,454  
Related party current portion of long-term debt     359       529  
Current portion of operating lease liabilities     5,412       4,398  
Current portion of finance lease liabilities     882       821  
Total current liabilities     133,109       123,489  
Long-term liabilities                
Deferred tax liability     101,294       174,480  
Long-term debt, net, less current portion     1,189,630       2,134,920  
Related party long-term debt, net, less current portion     32,125       64,758  
Operating lease liabilities, net of current portion     12,881       14,278  
Finance lease liabilities, net of current portion     11,522       12,194  
Deferred revenue–LT     5,652       6,173  
Other long-term liabilities     1,587       2,750  
Total liabilities     1,487,800       2,533,042  
Commitments and contingencies (Note 19)                
Stockholders’ equity                
Preferred stock $0.01 par value - 100,000,000 and zero shares authorized as of September 30, 2024 and December 31, 2023, respectively; zero shares issued or outstanding as of September 30, 2024 and December 31, 2023, respectively            
Common stock $0.01 par value - 2,500,000,000 and 227,000,000 shares authorized at September 30, 2024 and December 31, 2023, respectively; 172,086,129 and 121,679,902 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively     1,721       1,217  
Additional paid-in capital     3,290,813       2,234,688  
Accumulated other comprehensive income (loss)     192       15,802  
Accumulated deficit     (239,979 )     (201,775 )
Total stockholders’ equity     3,052,747       2,049,932  
Total liabilities and stockholders’ equity   $ 4,540,547     $ 4,582,974  

 

 


 

Waystar

Condensed Consolidated Statements of Cash Flows

(in thousands, except for share and per share data)

(unaudited)

 

    Nine months ended September 30,  
    2024     2023  
Cash flows from operating activities                
Net loss   $ (38,204 )   $ (36,919 )
Adjustments to reconcile net income/(loss) to net cash provided by operating activities                
Depreciation and amortization     148,635       131,780  
Stock-based compensation     47,400       6,505  
Provision for bad debt expense     1,642       1,614  
Loss on extinguishment of debt     20,277        
Deferred income taxes     (57,984 )     (47,126 )
Amortization of debt discount and issuance costs     3,301       7,907  
Other     (99 )      
Changes in:                
Accounts receivable     (13,445 )     (5,101 )
Income tax refundable     2,227       (619 )
Prepaid expenses and other current assets     (1,714 )     (6,238 )
Deferred costs     (14,389 )     (10,586 )
Other long-term assets     (515 )     (33 )
Accounts payable and accrued expenses     9,366       231  
Deferred revenue     (1,256 )     (257 )
Operating lease right-of-use assets and lease liabilities     (244 )     (1,199 )
Other long-term liabilities           45  
Net cash provided by operating activities     104,998       40,004  
Cash flows from investing activities                
Purchase of property and equipment and capitalization of internally developed software costs     (21,044 )     (15,726 )
Acquisitions, net of cash and cash equivalents acquired           (30,027 )
Net cash used in investing activities     (21,044 )     (45,753 )
Cash flows from financing activities                
Change in aggregated funds liability     7,433       458  
Proceeds from equity offering, net of underwriting discounts     1,017,074        
Payments of third-party IPO issuance costs     (3,372 )      
Repurchase of shares     (844 )     (688 )
Proceeds from exercise of common stock options     1,488       284  
Proceeds from issuances of debt, net of creditor fees     545,209        
Payments on debt     (1,550,002 )     (13,487 )
Third-party fees paid in connection with issuance of new debt     (1,410 )      
Finance lease liabilities paid     (611 )     (599 )
Net cash provided by (used in) financing activities     14,965       (14,032 )
Increase in cash and cash equivalents during the period     98,919       (19,781 )
Cash and cash equivalents and restricted cash–beginning of period     45,428       72,636  
Cash and cash equivalents and restricted cash–end of period   $ 144,347     $ 52,855  
Supplemental disclosures of cash flow information                
Interest paid   $ 101,189     $ 143,685  
Cash taxes paid (refunds received), net     38,558       36,654  
Non-cash investing and financing activities                
Fixed asset purchases in accounts payable     586       (502 )
Unpaid third-party IPO issuance costs     50        
Reconciliation of Balance Sheet Cash Accounts to Cash Flow Statement                
Balance sheet                
Cash and cash equivalents     127,125       44,450 )
Restricted cash     17,222       8,405  
Total     144,347       52,855  

 

 


 

Waystar

Reconciliation of Adjusted EBITDA

(in thousands)

(unaudited)

 

    Three months ended
September 30,
    Nine months ended
September 30,
 
    2024     2023     2024     2023  
Net income/(loss)   $ 5,413     $ (15,486 )   $ (38,204 )   $ (36,919 )
Interest expense     18,459       52,410       126,184       153,057  
Income tax expense/(benefit)     3,274       (4,709 )     (17,398 )     (11,743 )
Depreciation and amortization     60,185       43,675       148,635       131,780  
Stock-based compensation expense     7,903       2,207       47,400       6,505  
Acquisition and integration costs     188       1,342       696       3,236  
Costs related to amended debt agreements     106       -       12,876       -  
IPO related costs     109       1,551       2,114       1,554  
Other (a)     1,040       -       1,040       -  
Adjusted EBITDA   $ 96,677     $ 80,990     $ 283,343     $ 247,470  
                                 
Revenue     240,112       197,263       699,447       584,315  
Net income/(loss) margin     2.3 %     (7.9 )%     (5.5 )%     (6.3 )%
Adjusted EBITDA margin     40.3 %     41.1 %     40.5 %     42.4 %

 

(a) Adjustments relate to additional lease costs due to the relocation of our Louisville office

 

 


 

Waystar

Reconciliation of Non-GAAP Operating Expenses

(in thousands)

(unaudited)

 

    Three months ended
September 30,
    Nine months ended
September 30,
 
    2024     2023     2024     2023  
Cost of revenue (exclusive of depreciation and amortization expenses)   $ 80,545     $ 62,922     $ 236,188     $ 182,578  
Less:                                
Stock-based compensation expense     (300 )     (131 )     (2,161 )     (545 )
Acquisition and integration costs     -       (58 )     (31 )     (58 )
IPO related costs     (4 )     -       (9 )     -  
Cost of revenue (exclusive of depreciation and amortization expenses), adjusted   $ 80,241     $ 62,733     $ 233,987     $ 181,975  
                                 
Sales and marketing   $ 38,450     $ 32,114     $ 117,945     $ 93,490  
Less:                                
Stock-based compensation expense     (1,587 )     (444 )     (10,958 )     (1,386 )
Acquisition and integration costs     -       (48 )     -       (49 )
IPO related costs     94       -       (141 )     -  
Sales and marketing, adjusted   $ 36,957     $ 31,622     $ 106,846     $ 92,055  
                                 
General and administrative   $ 22,704     $ 17,365     $ 88,794     $ 46,524  
Less:                                
Stock-based compensation expense     (4,832 )     (1,276 )     (27,043 )     (3,630 )
Acquisition and integration costs     (86 )     (1,092 )     (272 )     (2,707 )
Costs related to amended debt agreements     (106 )     -       (12,876 )     -  
IPO related costs     (200 )     (1,551 )     (1,956 )     (1,554 )
Other (a)     (1,040 )     -       (1,040 )     -  
General and administrative, adjusted   $ 16,440     $ 13,446     $ 45,607     $ 38,633  
                                 
Research and development   $ 11,082     $ 8,972     $ 37,303     $ 25,548  
Less:                                
Stock-based compensation expense     (1,184 )     (356 )     (7,238 )     (944 )
Acquisition and integration costs     (102 )     (144 )     (393 )     (422 )
IPO related costs     1       -       (8 )     -  
Research and development, adjusted   $ 9,797     $ 8,472     $ 29,664     $ 24,182  
                                 
Depreciation and amortization   $ 60,185     $ 43,675     $ 148,635     $ 131,780  
Less:                                
Other (a)     (15,776 )     -       (15,776 )     -  
Depreciation and amortization, adjusted   $ 44,409     $ 43,675     $ 132,859     $ 131,780  
                                 
Income tax expense/(benefit)   $ 3,274     $ (4,709 )   $ (17,398 )   $ (11,743 )
Tax effect of adjustments     5,276       1,071       16,779       2,372  
Income tax expense/(benefit), adjusted   $ 8,550     $ (3,638 )   $ (619 )   $ (9,371 )

 

(a) Adjustments relate to additional lease costs and accelerated depreciation due to the relocation of our Louisville office

 

 


 

Waystar
Reconciliation of Non-GAAP Net Income
(in thousands, except share and per share amounts)

(unaudited)

 

    Three months ended
September 30,
    Nine months ended
September 30,
 
    2024     2023     2024     2023  
Net income/(loss)   $ 5,413     $ (15,486 )   $ (38,204 )   $ (36,919 )
Stock-based compensation expense     7,903       2,207       47,400       6,505  
Acquisition and integration costs     188       1,342       696       3,236  
Costs related to amended debt agreements     106       -       12,876       -  
IPO related costs     109       1,551       2,114       1,554  
Other (a)     16,816       -       16,816       -  
Tax effect of adjustments     (5,276 )     (1,071 )     (16,779 )     (2,372 )
Non-GAAP net income/(loss)   $ 25,259     $ (11,457 )   $ 24,919     $ (27,996 )
                                 
Non-GAAP net income/(loss) per share, basic     0.15       (0.09 )     0.18       (0.23 )
Non-GAAP net income/(loss) per share, diluted     0.14       (0.09 )     0.17       (0.23 )
                                 
Weighted-average shares used in computing basic non-GAAP net income/(loss) per share     171,578,311       121,673,852       142,367,458       121,674,189  
Weighted-average shares used in computing diluted non-GAAP net income/(loss) per share     176,181,511       121,673,852       146,843,861       121,674,189  

 

(a) Adjustments relate to additional lease costs and accelerated depreciation due to the relocation of our Louisville office

 

Waystar
Reconciliation of Unlevered Free Cash Flow
(in thousands)

(unaudited)

 

    Three months ended
September 30,
    Nine months ended
September 30,
 
    2024     2023     2024     2023  
Net cash provided by operating activities   $ 78,818     $ (10,447 )   $ 104,998     $ 40,004  
Interest paid     18,925       49,037       101,189       143,685  
Purchase of property and equipment and capitalization of internally developed software costs     (8,616 )     (6,244 )     (21,044 )     (15,726 )
Unlevered free cash flow   $ 89,127     $ 32,346     $ 185,143     $ 167,963  

 

 


 

Waystar
Reconciliation of Net Debt
(in thousands)

(unaudited)

 
    September 30,
2024
    September 30,
2023
 
First lien term loan facility outstanding debt, current   $ 12,909     $ 17,983  
First lien term loan facility outstanding debt, net of current portion     1,153,864       1,717,328  
Second lien term loan facility outstanding debt     -       468,000  
Receivables facility outstanding debt     80,000       50,000  
Cash and cash equivalents     (127,125 )     (44,450  
Net debt   $ 1,119,648     $ 2,208,861  
                 
Trailing twelve months adjusted EBITDA   $ 369,587     $ 325,755  
                 
Adjusted gross leverage ratio     3.4 x     6.9 x
Adjusted net leverage ratio     3.0 x     6.8 x

 

Waystar
Reconciliation of Trailing Twelve Months (TTM) Adjusted EBITDA
(in thousands)

(unaudited)

 

    Three Months Ended     TTM  
    September 30,     June 30,     March 31,     December 31,     September 30,  
    2024     2024     2024     2023     2024  
Net income/(loss)   $ 5,413     $ (27,685 )   $ (15,932 )   $ (14,415 )   $ (52,619 )
Interest expense     18,459       50,541       57,184       52,860       179,044  
Income tax expense/(benefit)     3,274       (14,611 )     (6,061 )     (757 )     (18,155 )
Depreciation and amortization     60,185       44,276       44,174       44,686       193,321  
Stock-based compensation expense     7,903       36,969       2,528       2,343       49,743  
Acquisition and integration costs     188       206       302       711       1,407  
Costs related to amended debt agreements     106       2,368       10,402       393       13,269  
IPO related costs     109       1,841       164       423       2,537  
Other (a)     1,040       -       -       -       1,040  
Adjusted EBITDA   $ 96,677     $ 93,905     $ 92,761     $ 86,244     $ 369,587  

 

(a) Adjustments relate to additional lease costs due to the relocation of our Louisville office

 

Media Contact

 

Kristin Lee
kristin.lee@waystar.com

 

Investor Contact

 

Sandy Draper

investors@waystar.com

502-238-9511