Waystar (NASDAQ:WAY) reported third-quarter 2026 revenue of $326 million, up 21% year over year, as the healthcare revenue-cycle technology company cited growth in subscriptions, larger customer relationships and demand for its AI-enabled products.
Organic revenue increased 10% in the quarter, while adjusted EBITDA rose 24% to $139 million. The company reported a 43% adjusted EBITDA margin, GAAP net income of $31 million, or $0.16 per diluted share, and unlevered free cash flow of $115 million.
Bookings, Larger Clients and Platform Adoption
Waystar ended the quarter with 1,488 clients generating more than $100,000 in trailing 12-month revenue, an increase of 14% year over year. These larger clients represented about 75% of company revenue, compared with roughly two-thirds two years ago, according to Chief Financial Officer Alpana Wegner.
The company said its large-client cohort uses approximately five Waystar product modules on average. Waystar has more than 30 modules across six product families, which management identified as a continuing cross-selling opportunity.
Waystar said year-to-date bookings from opportunities above $100,000 rose more than 30% year over year, while implementation backlog tied to those opportunities increased more than 50%. Wegner said larger platform deployments can take 12 to 18 months to convert into revenue.
Hawkins said the company secured its largest new customer contract to date during the quarter, winning a major East Coast health system with approximately $7 billion in annual net patient revenue. The customer selected Waystar’s platform across patient access, mid-cycle and back-end revenue-cycle operations, with plans to replace more than 20 vendors.
Existing clients accounted for about 60% of year-to-date bookings. Waystar also cited a Texas health system that selected its Prebill Anomaly Detection product, replacing two incumbent vendors while expanding an existing relationship that already included claims management, patient access and clinical documentation integrity offerings.
Iodine Momentum and AI Product Development
Waystar said bookings for Iodine, the clinical intelligence business it acquired, exceeded its year-to-date plan by 74%. Across its clinical documentation integrity, or CDI, and Prebill Anomaly Detection products, the company generated nearly $30 million in year-to-date bookings, including about $15 million in the third quarter, and reported a combined pipeline exceeding $100 million.
Bookings from existing Waystar customers adopting Iodine capabilities totaled about $9 million in the third quarter, up 50% sequentially. Management said it is increasingly packaging CDI with Prebill Anomaly Detection to address mid-cycle revenue-cycle needs.
The company launched an autonomous claim-resubmission capability during the quarter as part of its premium claims-management offering. Hawkins said the AltitudeAI-powered product interprets payer responses, determines next actions using payer-specific intelligence and automatically resubmits eligible rejected claims.
Based on early adopter results and the initial types of claims supported, Waystar estimated that the capability could autonomously resubmit up to $5 billion of previously rejected claims annually and eliminate more than 400,000 hours of manual work per year.
More than 100 customers are participating in early access for conversational AI within Waystar’s premium analytics offering, according to the company. Early users reported reductions of up to 75% in time spent analyzing data. AltitudeAI-powered offerings accounted for about 43% of third-quarter bookings, while more than 130 clients had joined the company’s early-adopter program for new capabilities.
Waystar also appointed Amit Khanna as chief product and technology officer. Khanna most recently led healthcare at Salesforce, where he helped bring Agentforce for Health to market, Hawkins said.
Fourth-Quarter Outlook Reflects Timing Pressures
Waystar lowered its full-year revenue forecast to a range of $1.277 billion to $1.287 billion, with a midpoint of $1.282 billion. The forecast implies fourth-quarter revenue of about $323 million and year-over-year growth of approximately 6%.
Wegner identified three factors affecting the fourth-quarter outlook:
- A greater-than-expected transition from printed patient statements to digital delivery in the patient-payments business.
- A commercial mix shift at Iodine toward Prebill Anomaly Detection, which carries longer implementation periods and an outcome-based revenue model.
- A difficult comparison with three large client implementations that ramped unusually quickly in the prior-year fourth quarter.
The company said these factors together are expected to reduce fourth-quarter revenue growth by about four percentage points. Excluding them, Waystar estimated normalized fourth-quarter growth would be approximately 10%. At the midpoint of its full-year outlook, the company expects normalized organic revenue growth of roughly 11%.
Management characterized the print-to-digital transition as a multiyear change rather than a sudden shift. Wegner said the digital mix has more attractive unit economics and is margin-accretive, while customers are expected to continue using both print and digital statements.
Waystar maintained that it expects Iodine to be accretive in fiscal 2027, though it did not provide 2027 guidance. The company said early adopters of Prebill Anomaly Detection were producing outcomes in line with its initial estimates.
Profitability, Cash Flow and Capital Allocation
Waystar raised its full-year adjusted EBITDA guidance to $543 million to $549 million, up $6 million at the midpoint from its prior outlook. The revised range implies approximately $135 million of fourth-quarter adjusted EBITDA and a margin of about 42%, with a full-year midpoint margin of approximately 42.5%.
The company ended the quarter with approximately $277 million in cash and short-term investments and a net leverage ratio of 2.2 times, more than one full turn lower than a year earlier. During the quarter, Waystar repurchased approximately $21 million in stock, bringing total repurchases under its $200 million authorization to about $33 million through Sept. 30.
Capital expenditures for fiscal 2026 are expected to range from $55 million to $60 million, including investments in the platform, AI and automation capabilities.
About Waystar (NASDAQ:WAY)
Waystar Holding Corp. is a healthcare technology company that provides cloud-based software designed to simplify administrative and financial processes across the healthcare industry. Its platform connects healthcare providers, health plans and patients, helping organizations manage revenue cycle operations and improve the flow of information and payments.
The company’s products and services include electronic claims management, eligibility and benefits verification, prior authorization, payment integrity, denial management, patient estimates and payments, billing automation, and healthcare analytics.
