Waystar Holding Corp Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Destiny Jackson - JPMorgan Chase & Co - Analyst : Hi, this is Destiny one for Alexei. Thanks for taking the call. And 1225 you mentioned, 10 million revenues boosts coming from client migration post-chain cyberattack. Has there been any benefit in Q2. Or it's now completely over and are we back to intentional business decision making? Thank you.

Question: Destiny Jackson - JPMorgan Chase & Co - Analyst : Thank you.

Question: Adam Hotchkiss - Goldman Sachs Group Inc - Analyst : Great, thank you so much for taking the question. I just wanted to touch on the rapid onboarding of large clients you mentioned. Is there any reason that some of the volume-based revenue that was brought on from those clients wouldn't be recurring in the second half of the year? I just note that because the guidance implies. A greater step down in second half revenue than I than I think we're used to. And so I'm just trying to understand the outperformance in the second quarter and why we wouldn't expect that to flow through to the second half and I guess how you think about the upside risk to the second half around those dynamics plus the volume-based side. Thanks so much.

Question: Adam Hotchkiss - Goldman Sachs Group Inc - Analyst : Thanks so much.

Question: Allen Lutz - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Good afternoon and thanks for taking the questions. One for either Matt or Steve. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2025 / 8:30PM, WAY.OQ - Q2 2025 Waystar Holding Corp Earnings Call Look at subscription revenue, this was the biggest sequential increase in subscription revenue in the past year, and I guess that would be a little counterintuitive given. The benefit that you observed from the cybersecurity piece in 2024. So as we think about the benefit you saw in Q2 more than 6 million of sequential revenue growth in subscription. What's driving that exactly and was there Any type of impact from tariffs, just concern from customers, and then how do you think about the demand environment in the second half of the year? Is there any contemplation of a pullback just what drove the growth in the quarter and then how to think about 28 from here. Thanks.

Question: Allen Lutz - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Great. Thank you very much.

Question: Richard Close - Canaccord Genuity Corp - Analyst : Yes, thanks for the question. Congratulations, Just maybe on the volume growth, again even with, I guess the rapid onboarding, adding a couple percentage points in the second quarter, that, the quarter was still above the 11% in the first Quarter. So I'm just curious, is it your sense it's the higher utilization environment or, is there any read through? Maybe moving more clients to digital payments and getting, better collection rates and I guess I'm just curious where you stand on, penetration of patient payments on the digital versus traditional methods and how that's progressing.

Question: Richard Close - Canaccord Genuity Corp - Analyst : Alright thank you.

Question: George Hill - Deutsche Bank AG - Analyst : Hey, good afternoon, guys. I've got two quick ones. One's a lay-up for Matt and one's a little bit tougher one for Steve. So Matt, if you're listening to Matt, if you're listening to MCO earnings calls, they're basically all creating a commercial for Waystar Talk complaining about how the impacts of AI and revenue cycle management tools are killing their cost targets. So I guess what I would ask is, have you seen any downstream impact of that from a client demand perspective? And I guess is there a way to quantify. Like on a year over year basis, if we think about your revenue, like what is the benefit of kind of increased charge capture or the increased ability to code in the in the volume-based revenue, and I apologize for this being a long question. And then for Steve, maybe I missed this in the detailed in the detailed commentary. But if I look at the subscription revenue and the volume-based revenue, like is the expectation that like either the volume-based revenue. I'm sorry, the subscription-based revenue tracks back meaningfully or the volume based revenue because if the subscription revenue doesn't, the volume based revenue would really have to backtrack in order to see Q3 and Q4 down meaningfully to kind of get to the. The guidance targets. So what I would just love kind of more interplay on like which revenue lines are moving in which direction and why as it relates to the guidance, which is looking pretty conservative. Sorry for the long question.

Question: George Hill - Deutsche Bank AG - Analyst : Okay, I appreciate the call. I'll hop back in the queue.

Question: Elizabeth Anderson - Evercore ISI - Analyst : Hi guys, thanks so much for the question. I don't know if I can get such a sound bite out of you, as George can, but I was hoping you could help me understand the math that you were, talking about the, one big beautiful bill math we're talking about sort of the 15% of Medicaid funding and the HICS funding as well, with the 1% impact, obviously that's the key question, in terms. Of how people are thinking about a bunch of healthcare services companies for 2026. So I was wondering if you could just sort of help us flesh out like how to think about those assumptions and obviously, there isn't a one to one impact with the volume, so maybe you could just walk us through that again as well and make sure we all understand your thinking there.

Question: Elizabeth Anderson - Evercore ISI - Analyst : Great, thank you very much.

Question: Brian Tanquilut - Jefferies LLC - Analyst : Hey, good afternoon guys and congrats on the Quarter. Maybe just to follow up on Elizabeth's question, as I think about EAPTCs, the health insurance exchange subsidies expiring, have you looked into how that would look or what that quantification would be? I know the one big bill is less than 1%, but EAPTCs will be more relevant. I just curious how you think about that. Thank you.

Question: Ryan Daniels - William Blair Capital Partners - Analyst : Yeah guys, thanks for taking the questions. Matt, one for you hit on this a little bit in your prepared comments, but earlier this week we effectively heard from one of your competitors that their techno technology is falling behind the curve and really impacting market performance. I'm curious if you could dive a little bit deeper about what you're seeing on the competitive front and perhaps any color on recent win rates or how your modern platform is impacting the sales pipeline versus what you've seen in past years against your peers. Thanks.

Question: Ryan Daniels - William Blair Capital Partners - Analyst : Okay perfect I appreciate it thank you.

Question: Jeering - Tru Securities - Analyst : Thank you and congratulations on a strong Quarter. I want to follow up on your comments around health plans, pledge around reducing the need for prior authorization, given your deep partnership with health systems and providers. What is the early feedback on this development? Are providers making any changes in their workflow in response? Is it too early to say? And related to that we have heard about that concern among providers that this might drive more denials post-patient interaction which could be actually good for your platform denial management, but just curious, like any feedback from providers on that.

Question: Jeering - Tru Securities - Analyst : Great, thanks, matt.

Question: Lucas - - Analyst : Hi, this is Lucas on for Charles. Thanks for taking the questions and congrats on the Quarter. Recently we've heard that the competitor impacted by the cyberattack has recently been reaching out to customers that have left as a result of the outage, pushing hard for them to return after them. Are back online possibly using contractual obligations to do so. I guess one, are you experiencing this? And then two, you noted earlier seeing excellent retention amongst these customers from that competitor but curious if it's possible that you see this as a risk going forward.

Question: Lucas - - Analyst : Thanks, appreciate it.

Question: Daniel Grosse - - Analyst : Hi guys, thanks for taking the question. I'd like to go back to the 3 large client wins that helped boost volume revenue this Quarter. Were those wins contemplated in guidance last quarter, and so, the upside is really coming from onboarding them faster than anticipated. And then I'm curious if you can provide a bit more detail on those clients, namely for these competitive takeaways? Are they health system or ambulatory clients and Is there opportunity for further cross sales this year? Thanks.

Question: Daniel Grosse - - Analyst : Yeah, and were these competitive takeaways?

Question: Daniel Grosse - - Analyst : Okay great thank.

Question: Steven Valiquette - Mizuho Securities USA LLC - Analyst : Thanks. Yeah, hi, it's Steven Valiquette from Mizuho. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2025 / 8:30PM, WAY.OQ - Q2 2025 Waystar Holding Corp Earnings Call So yeah, obviously at this point a lot of key topics have already been talked about. One thing I was kind of curious about, you're really in the clearinghouse solutions market really most of the back end of a revenue cycle continuum. Some of your biggest competitors are obviously still owned by managed care payers. One's been talked about a lot in this call, but there's other ones too. So I guess really with the results you're seeing in some of the wins you've had. Curious if you're getting more feedback that in this environment the way stars independence is really resonating just as strong, if not even stronger, in 2025 versus 2024. You know it's hard to, quantify something like that but any qualitative color. You know somebody mentioned, that competitor talked about kind of falling behind from a technology innovation standpoint, but really just on the independence part in particular, just curious to hear more about that and whether that's resonating really against, a lot of your other competitors that are owned by payers. Thanks.

Question: Steven Valiquette - Mizuho Securities USA LLC - Analyst : Okay, that's helpful. Thanks.

Question: Destiny Jackson - JPMorgan Chase & Co - Analyst : Hi, this is Destiny one for Lexi. Thanks for taking the call. And 1225 you mentioned, 10 million revenues boosts coming from client migration post-chain cyberattack. Has there been any benefit in Q2. Or it's now completely over and are we back to intentional business decision making? Thank you.