WAY - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Waystar Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Sandy Draper, Head of Investor Relations. Please go ahead.

Alexander Draper

Thank you, operator, and good afternoon, everyone. to Earnings to Call. pleasure Third Holding my XXXX Quarter is welcome Waystar you Corporation's It our other Today's replay, of transcript on along is this with along call being the will webcast call. be the materials following related and a website, conclusion with available Officer, Matt Waystar's Financial Officer; me today. Oreskovich, Waystar's and Hawkins, joining Steve Executive Chief Chief are presentation accompany announcing After we issued today, prepared their your our results to financial questions. Earlier remarks, to we call will slide and remarks. a press our open release deck the a The materials the on available our website Investor of are Relations at section investors.waystar.com.

remind involve materially placed forward-looking Before and on in that not those undue of performance we get not margins. These include expectations started, and risks future I differ include statements that and these call these will these which forward-looking be are all statements of do may of reliance statements from guarantee you statements not results a future number should growth expressed contains statements. results, Examples Actual facts. historical and statements. this uncertainties, financial

that of as website. Any all such no of as full factors risks with release refer reports the this our on SEC press revise which of and statements law. date required provided forward-looking website our discussion to this are by Investor during are statements obligation of the or we the available with these file only June our filed the impact on this page update call made generally, the and except prospectus Relations of in to undertake call, evening's statements other XXXX, X please and and a business we forward-looking For and may other SEC,

evaluating believe useful discuss will financial certain we measures, in which call, may we financial non-GAAP today's performance. also be our During

our most share provided reconciliations the non-GAAP certain results our and or our non-GAAP should other explanations slide together and with measures per the for other income and accordance measures in have in earnings remarks in included net comparable to of these earnings with of appendix not the financial release. directly GAAP in be prepared presentation financial deck substitute measures We isolation a GAAP. considered and measures, non-GAAP These EBITDA adjusted as

pleased we that, in participation Connects in December over Francisco, I'll Miami where both it and Health Technology in Conference Evercore note Barclays the ISI are the turn Lastly, many San to with forward we our you. With of to Conference to Matt. in engaging look

Matthew Hawkins

our future four that you, I'll Thank and Thank QX good Today, topics Sandy, you joining direction. earnings key afternoon, and progress our cover call. everyone. for XXXX highlight

sustainable First, growth. discuss Waystar's and revenue compounding we'll

efficiency Second, driving our profitability I'll improvements operational and share across the business.

highlight I'll platform we'll over team and member annual innovations guidance value Steve, to of provide CFO, deliver the in fourth, view review experiences. turn our XXXX. financial Third, latest successes And the for to our our client recent software will our a our who I'll clients. detailed call and in Then that materials

delivered First, quarter sustainable QX, growth. strong line top growth. In revenue of Waystar another

retention, from that price effective in client $XXX reached and software's XX% We drove client growth through QX value. an year-over-year demonstrate revenue this 'XX. XX% cross-selling, the acceleration modest and million, Our a our growth increases solid increase representing new acquisitions

by we Our and our a our investment total is durable delivering evidenced proven retention that by ongoing on enduring growth and a metrics expansion. sustainable prioritizes drive return approach of key lowering performance client two fundamental This strategy strategy growth track tangible model. cost our of as building the reinforce and ownership, relationships product client part

This XXX% the result at First, with XX in historical of QX. retention came is in range our last consistent over XXX% to revenue net XXX% quarters.

X,XXX, of to trailing revenue generating grew clients XX% of year-over-year. than Second, in more XX-month the $XXX,XXX an increase number

event that success clearinghouse after Our the a seeking attracting a clients our cyber reflects reliable in February QX competitor. growth impacted

call, signed earnings resumed welcomed Waystar providers the capabilities. previous rapidly have shared new we expanding flow. their these business terms they implementing cash ensure than we quickly of to clearinghouse in platform XX,XXX of standard to Waystar use them Many beyond more are already our Waystar, agreements to providers As X- and X-year with

demonstrates to exchange advocates software sustainable clients' Our strategy commitment through system payers. that We system securely connections its lack to resiliency providers' and of cash and flow resiliency. measures contribute operations information advanced modern monitoring efficiently payers to ensuring that proactive enable investing growth operational essential restoration, in for and to Waystar protocols by nonexclusive clearing protect believe prioritizes exclusive continuity. cybersecurity. to Waystar generation. cybersecurity deploy that our may through houses between a and system some technical business resiliency with information providers rapid Waystar's is relationships

and So competitor's clearinghouse. These far direct connections. resiliency. dozens of of to improved our established new payers, network connections increase and of has a previously of speed direct extensive Many network were in XXXX, enhancing Waystar are exclusive payment these payer with the nonexclusive connections

of an care. exchange prioritize allowing to information, is focus efficient patient to Our create providers

Moving to profitability efficiency. and

This growth. quarter that continue company adjusted and Adjusted management quarter XX% year-over-year EBITDA cost while make of This performance of expenses. long-term of highlights strategic performance. our strong our commitment to continues vigilant EBITDA a future position reached a including for million, and margin, investments $XX trend XX% increase software we public platform reflecting the to Waystar the full value EBITDA a

of debt flow QX and We The to model's QX. strong Our our we increased to to XXXX. $XX on million lowered a maximize internal which and debt. ratio in profile evaluate operational cash pay flexibility and compared conversion. to our free and QX highlights sustainable flow, cash improvement underscores the down, in focus also to X.Xx business in step-up cash quarter-over-quarter cash collections. Due performance efficiency successfully EBITDA investors. M&A Xx, flow our unlevered explore additional experienced continues year-over-year growth to to growth We end leveraging to strong value opportunities us for provide committed the the the position at Waystar's drive investments, remain and leverage net our reduce our

appetite adopters of health reduction conducted the forecasting XX% indicate for revealing addressing and of unsustainable. their Waystar The Next, intelligent a holds returns collaboration position adeptly this intelligence, strong solutions pressing care are early a leaders underscores that challenges I'll health need surge with manual in demonstrable solutions that work. ROI. with inefficiencies promote revenue delivering are next mission-critical industry landscape the highlighting care platform market artificial understaffed, for and by purpose-built XX in generative through Recent in AI automation research our significant to months. Waystar industry's for investments teams and substantial cycle automation a on in speak complex the software XX modern to innovation. over leading transformative

our uniquely nearly time more a payers generative denial spanning through Each designed management, client working X generative are on and intelligent AI and data operational thematically approximately AI deployment we expansive the decade more network successful AI and authorization interactions of the faster dozen and advancements which highly to payment. Innovation generative use additional use appeal Waystar's applications automation, to leverage providers cases launching in patients actively that conference we in September, AI which we case in expect facilitates We and promote anticipated with prevention demonstrated achieve power XXXX. in efficiencies, of achieve our United and Lab. At positioned ongoing patients over investments is help accurate of With a begin software to XX% to in than are States. are billion transactions, innovation,

the a is to across expanded and efficiently workflows accurately Pay. enhancements not missing tools receive promise impacting cloud-based hundreds than coverage commitment each to In payer ever, identify insurance more platform. innovation journey, reality. payment the These a new quarter operations. automated self-service including QX, of of our manage Our but faster, we launched more power enable positively features to that patient and launched just payments their use We throughout and software introduced providers in providers patient to expedite options, innovations and claims Apple payments financial

to all across innovative satisfaction commitment trusted settings to client us care positions our testament in providers. ranking #X partner a is and as for excellence a Our

our days of event understanding increase This in year. our AI to opportunity to displayed built lie which client connect our client I conference, a innovation believe latest In attracted provided all our the North, our best hosted our a lab software invaluable we and prioritize peers, our generative an At we recent community Clients engagement. and cybersecurity. modern enduring team like and alongside further confidence AI demonstrations deepen platform. At Waystar attendance Waystar's leaders our industry September, of commitment exchange software respondents A experienced AI best advancements to and survey in client conference, to and ahead, dedication trust. Waystar True fostering innovations previous that revealed successes. Waystar, hands-on annual Lastly, of highlighting our client in speak will for capabilities compared with clients the software, our XX% practices that to delighting and their on and reflecting XX% their secure generative platform. relationships innovation

convened Waystar's uniting AI We health on market payments. and also care of Waystar for a and our simplifying Advisory renowned from and care organizations health leading valuable health initiatives expertise. our nationwide insights guidance achievements care members executives product network mission challenges their Board, shared advance These provided of on innovations generative that

Award recognition ] Business earn achieving continued a Company of for sectors, in the the Healthcare Waystar We several the categories at in for International Stevie Payments received Gold a top and Award care within innovation the workplace. Awards, Best Gold quarter, as This and Stevie XXXX solution. in leader including Stevie honors to X and awards Year software health the [

the Additionally, Best an receiving Work celebrated awards from first. Chronicle Business we business choice, of as Louisville Place and employer our reputation to Atlanta

reinforce in a our conclusion, maintain the report certified accomplishments care. work. in year, outlook a and For continued future. In spot for exceptional in Fortune's great for fall, growth XXXX we are Together, the Fortune and commitment proudly our health And this value of to pleased place earned Workplaces consecutive Best future. delivering list position we the positive Waystar achievements second a to these on QX as us to

ahead. As target the lie substantial we we opportunities strategically recognize immense that addressable a market,

features generative uniquely advanced to durable increase capacity outpaces the but reinforce coming the cloud-based growth competitive exceptional evolving both advancements of with technology and years. sustained our our unwavering AI, not positions meet that to distinction, commitment us in also now combined These like our our Our market platform, clients. achieve software only the to client needs service, which

continue performance. compounder. With double-digit to our low affirm provide enduring of our a Steve Our normalized we as growth results that, of cultivate overview a growth detailed will stable now expectation financial

Steven Oreskovich

strong of the expanded in ability full our to This had in third to to successfully software the deliver resulting As more Matt quarter quarter indicated, double-digit increased Revenue growth growth. metrics $XXX of This million. and XX end with drive impressive our primarily to showing driven by financial X,XXX proven includes of our to clients compounding was and clients year-over-year continuing in to another and producing number strength revenue, our revenue clients. We low XXX%. model all an LTM XX% the the as retention to plan adding guidance. with rate increase growth, execute business XXX,XXX net quarter upsell we QX, cross-sell year than the increased of existing

revenue to Additionally, with durable that quarter, in sustained implemented these transactions recognize QX, the levels our a higher increase we model of cyber in for of clients prior existing revenue competitor positively results increase rapidly expectation the are our rapid by an clearinghouse we've than continue a million who quarter generated from normal of $X a above validates business from along normal faster event. Seeing second $XX impacted to results. last million These which impacted QX clients, the row notable revenue from the our baseline. and implementations, is

benefit Finally, third modestly to XXXX the second in year-over-year of two the rate. the growth quarter small half continued acquisitions

and just income double-digit net QX advancements. items accounting EBITDA loss QX, growth third strong, is year. in months a X XX% XXXX factors expenses first of of was the expectations technology the offices. meet on with quarter quarter $X for vast of third prior of a charge. majority normalized reflects to I relocation to planned $XX XX% $XX touched the for ensure revenue continue Adjusted growth of we growth XXXX these in year-over-year and investment increased XX% for periods are compared associated the includes of we business The for continued XX% million of adjusted noncash low of during in million, see million the XXXX which While The one to ongoing net when of year-over-year. million the EBITDA the Matt client $XX margin our noted. GAAP

target the down We capital beginning debt. of XX-month in a million the flow sequential meets quarter we quarter of in using ] XX% drove $XX $X in be X/X $XXX the single the billion EBITDA quarter continue free of year-to-date to debt. the including of our burden conversion quarter, the green XX% was in and bringing over our includes cash of adjusted reduced as in The previously payment long-term conversion Since along the a by continue million with a the articulated. Unlevered to the above improvement. with to quarter-over-quarter a for we proceeds free pay structure working net tax steadily we Unlevered ratio flow improve cash QX, which our leverage taxpayer. the [ full to debt from debt the the $XX was billion, Xx, quarter well Operating XX%. $XX cash On $X to long-term quarter, turn results target, of our third of is million to exercise, free $X.X shoe unlevered is flow XXXX. down net basis, trailing net along capital a ending with tax million year, already management, and quarterly EBITDA cash third million,

Our allocation remain the capital priorities same.

expect sheet, targeting X continue delever a balance the year. We turn approximately to to

We top growth. sustainable also line acquisition drive in based on the our for look inorganic business growth disciplined will opportunities to we at continue to criteria. invest And

of midpoint, benefit and raising are updated compared performance year are clients fiscal Looking $XXX processed XX% the million At to forward, second the fourth in which quarter. the million. first half payments impact range XXXX software have we we on a business this growth onboarding the uplift to patient of growth guidance continued the to platform, This of the year It revenue higher the rapid seasonal described. as our revenue XXXX $XXX durable of considers over also full XX% the of and incorporates for our of half. the represents the for typically range

a with pickup which sales and cadence, to lines nice continue while implementation expect we activities a Finally, we more and and are time in clients, reflect behaviors seeing prospective interactions existing buying forward. going normal

raising $XXX adjusted of are We of XXXX. $XXX range at XX% million a EBITDA the adjusted year-over-year with along our midpoint, to XX.X% an representing EBITDA for to also growth margin guidance million,

cybersecurity public company expenses, for go-to-market development, investments incorporate Our expectations EBITDA adjusted continued in and initiatives software excellence.

revenue this well will target, guidance normal thoughts it preliminary we revenue. call, pattern to on circumstances unique While our give our our provide be year above quarter year's not future given double-digit on of XXXX our third growth low will

XXXX in 'XX after expect double-digit the high approach guidance, XXXX, earnings unique $X subject revenue Compared billion. We This in planning initial process guidance fourth midpoint basis. the as-reported to adjusting an We plan the to digits XXXX the XXXX of of revenue basis. a quarter our on this outlook our normalized XXXX on change. to growth for And give our on represents circumstances to may low completion call. is growth full and single

We are to your ready questions. now answer

Operator

from Goldman of come Our Adam Hotchkiss will Sachs. line from Instructions] first the [Operator question

Adam Hotchkiss

talk elevated some about your in here? your on talked picture initial Matt, decisions the making you incremental the the then, sustainable mentioned. Could contemplate cyber lot maybe conference. And Particularly wave like the attack. post sustainable you customers demand a the as clearing some to did view XXXX September after new you of It Steve, how logo this quarter, you start, about seems remarks? [indiscernible] I updated how side of on that know larger just and benefit is change saw we've

Matthew Hawkins

We Adam. been good business model important for We unique working XXXX a a successfully. see our to Thanks, year hear you. Yes. It's -- and from very Waystar. has

years the busy. they many hospital decision-makers' utilization things in the are market. We grow our progress market And in onboarding year, we built is course Waystar that functioning, that cases. We very pleased the of in in high-performing. many the their that that discussions. We've that uptick is continue other side make and and system that partner. seen through well RFPs. given Our tend rapidly ambulatory hospital example, event I'd the the a as health agreements, believe cyber of addressing we standard new number and we able and begin was our makers see that evaluate to use continue -- length. other and signed that see continuing. the how long-term referenceability complexity prospect invited the very clients They or seen many a the cyber -- delight We showcase opportunity getting They're high modules we're that Waystar We trend in and We look and the in more time the tick to remarks. to about the security, as the the the us. they're did teams with clients to client on one We've and at to one asked brand were just of in an software is we And to that more we software and comment rigorous highlighted to experience we've throughout we're X to can X said, process at clients of expect for clearinghouse built questions going there pipeline minds RFPs as we've those beginning already be trust up seen We've are other with phenomenon to occurred deploy reputation rapidly more modules of seen to and able as add we for Waystar prepared our and of to in we've those software decision in to table. phenomenal were platform.

a play look clients that hospitals as overall, People on to health the role we anticipated spend. we'd and well serve, smart major as we forward the IT future. is can focused Waystar are think systems So robust. at look and that ambulatory demand we We say with

Steven Oreskovich

have that process specific your would any appreciate provide comments, directionally can With to is to this is provide forward a speak -- we Yes. and there you I cadence. for time the what information, that them what that. comments quarter's buying patience finish to but normal more a to we the to seen said And for without as continue putting a regards to I on XXXX, and next specifics Steve. we going question back the prepared in line prepared Adam, in planning us for desire ask call. But the I line behaviors our your to plan reflect implementation bottom time expect to ranges

Adam Hotchkiss

And helpful. on your expectations things shake quick on just the QX useful. patient of be But Really a Where there felt then It follow-up Okay. in bit payments. out any better than expected a on base little in more financials came payment versus color some volume patient normalization did would the of a activity? the like side.

Steven Oreskovich

A Yes. of things. couple

That in are our of aware, deductibles, us deductible tend -- we [indiscernible] -- expectations. the increased well seen you're volume see care patients as half have particular, quarter, above seasonality above me, first and being our latter are tend of XXXX, As all third of pardon hit high and all across solutions in the the to reach second in that usage during health we those said, to services slightly year. half the in half between is of that our

Operator

Davis Our next of question Stephanie from from line Barclays. will come the

Stephanie Davis

Congrats on quarter. fantastic another

speed But experience forward, to looking have So never or from and could onboarding you this? this did again delighting leverage is for unsustainable, burn differentiate your there what those efficiency ] market client yourself? to was learnings you the year. accelerated you are [ improve with earlier mentioned forward on that you that something And accelerated thinking

Matthew Hawkins

time be in been to, use. had to who in business Waystar's into Yes, we move in learnings little be really to operations some were as of deploy grateful cases, and think software providers these lot as able X Thanks, we us, resume to we a a get so stand days, out help had to of were normal impacted, that to cloud-based quickly, able out period position this that come I Stephanie. of as

that's organization an focused continuous we're imagine on improvement. can process You

teams time, the clients. management that with have to things management and providers we to do thousands of solution incremental to that help been learnings, example, work project during for were so how automate on how we adoption to able our delight focused within project ensure And team that the strengthen certain all enrollments, our that our product

believe, showcase That we like during so created And even we've carries feel become it. our an and more we smarter that that us organization. speed adaptability the and focused forward. of I momentum because being the time, of momentum as to And able organization,

see sales we're that their where the referenceability bit friends, also are referring benefit We so and client clients our the as see we a to and and fact grateful we've that actually able we're to we examine associated now speak, been partnership, that for we demonstrate proven that with increase, getting see that. and of pipeline,

help So AI internally. as of referenceability, we go we learnings highlighted a forward, solutions. that couple generative us And

in us rules of rapidly to are Some those. those software to those and their begin rapidly place software, too. platform And deploy evaluate designed help clients payer in help contracts to deploy and effectively to waste they and as be be able the get able

for So question. thank the you

Stephanie Davis

I getting client getting. more to to of of the funds Or as and as word-of-mouth momentum we the Should in more growth anything guess clients uptick? order reflective else well? their in kind buying to call this is existing of related as that think buy large quarter inflection in there you're

Steven Oreskovich

Yes. Stephanie, this is Steve.

there's expansion a mix quarter. It's in achieve the at in outweighed quarter. those a some -- significantly is Transparently, there's of of the the to than was there or the There's expansion we that's total mix existing the I think $XXX,XXX number you that and clients see, [ of the within not we touched of should over you also of things. clients clients one LTM the onboarded of client normally other. expand, One base. ] revenue a the the both. healthy When of number and that say, time upon helped I rapidly solutions revenue of faster couple of revenue look

Operator

moment line question. the of Anne your next comes from Samuel JPMorgan. One question next for from Our

from line Markets. the Dodge Our of comes Sean from Capital RBC next question

Sean Dodge

great another Yes, on and congratulations quarter.

cadence 'XX understand fourth On the quarter. trying the just volume-based guidance, to revenue I'm the better for

bit should to means revenue up imagine $X a sequentially pretty like volume for sequentially get to million subscription end full if what that at probably step your order QX. even down then little guidance the significant in But for Your be base, a I that year. pretty look top of on I'd of the stable, implies the

So that squaring I I more the you this Steve, based QX? in But I you directionally, can help much just to know you was volume kind into that was think looking and -- seasonality, of modeling as volume there there's guess any appreciate do mentioned, based. think provide pulled in forward into volume QX? about all how for

Steven Oreskovich

Certainly, Yes. Sean.

to are amount seen We've you as now, it platform. from quarters our processed patient of activity being expectations. revenue for the seasonality on above volumes the X pertains the So correct payments the the and in software

fourth full So and year to a modeled say is as should we're from volume for back we're the year expected. I have looking what the and full at what a we've to getting we what guidance, in would it the what specifically thinking quarter, quarter, fourth implies for

running the full increase same-store, in for associated year from for rest expectations. X view better above But the have first to at of a approach the you that that of a take year, prudent are understanding term, a and our we lack volume Now an continued our are trying year-over-year when it so dollars far quarters basis. look

Sean Dodge

AI And efficiency. Okay. comments earlier and Matt, then, helpful. That's your on

If piloting could color beginning, to things can be? of it to kind any how or understand you're of those like from can some that boost next those, share drive think those plans about us now we there mentioned meaningful potentially is help just launch sounds you you the savings efficiency year. the You

Matthew Hawkins

Yes.

our we many What hold coverage, we now commenting for there's is that use point you had the on the that So say, cases specific real we've AI thank to show chance in in opportunity clients. time. we the launching question believe generative a at Sean, and this of will that anything would I and

And some benefit. co-development the have us. about that in traction how participating were clients in We thinking interest they that's We with know incremental we're are work and this. that informing getting

partner in some this trust. of are and What begin able to really potential the And to in as in if want time. software scale generative or to the generative was example, help at as efficiencies test XX% we we done, vast and these they new that For survey well point scale all. AI detailed operating they our modules of Sean. with are them specific suggests to are There that of study this future. AI we What it's comment suggested And that of okay, associated a that where like deploying really as not just clients and revenue and/or more around who will thought, XX%, majority AI near at at the pricing a efficiencies how with other participated internally. ourselves achieve new XX% decision-makers currently able the we that use one to that recent modules your makers they'd about question. I to AI with yet And inform think decision getting tactical work achieve. will

the that our have consistent be tangible launch being modules cautious with we same ] do how this sure of active we to positioned platform. and the all so time, is Waystar very we would very And momentum capitalize on that work that the That we are the and interest solutions that like on software here. investment, missed [ making doing. other within feel learning well return we're, And software and at will offer

Operator

from the come of line will Genuity. Close question Richard next Our from Canaccord

Richard Close

referenced Congratulations. new the to $XX Steve, related clients you million from rapid onboarding.

that. new to sounds me. I That existing contributing think somewhat also you about something to said

that do would million provided considering little you so sort just commentary down more, a explain here we hoping well? and I from pipeline And the bit you peak was is great. And $XX of that think the you that could ratchet the then as be

Steven Oreskovich

Richard. you, Yes. Thank

also -- guess the as couple that a as another had to question. $XX process were platform other onboarded impacted event, competitor's larger been portion a acquired Yes, our well otherwise, may of we of existing their software and those So both the your cyber organization the clients using for first impacted in includes I sister things term, have that have their business, by within or better million new our switching may transactions that lack company. of recently through to whether been clients or, the

a revenue, apologize to I those. a of items maybe based time but tell we pull-through respect million same setting to it implementation didn't those curve aperture these if of two last And the $X in craft both some new it's with last to of we've often when clarify that overall on a So our continued and pieces, of little from ball both to exactly normal is these couple or of I of sort that, mix as predicting the would mix quarter above our well. With of revenue. the I of what the expect a a quarters [ people, respect baseline, seen of crystal ] comes gains

slightly be normal multiple get complex month which be solutions expect continuation you look smaller that look to number and the time the pull-through, a if but larger, in a I we provide does line quarter? XX at a would to specific still So a next organization, there's as don't would to up or in more larger, could implementation, anywhere organization of to smaller typically, a it XX months. months. you with in a And have

Richard Close

can Are as that expanding guess, historically I pretty a then in or numbers, you attendees curious, XX% significant. up I along provide lines? was anything their with the conference attendance any And you relationships terms those is Okay. there of metrics follow-up, Matt,

Matthew Hawkins

the in it's North. that We Richard. participation. hosting we but what numbers And don't fantastic. We an specific Thanks, say It here love Waystar conference. second call True I'd it in-person year uptick was disclose our is of

For looking and examining hands-on really participants. creating peer-to-peer and and of clients training feedback on community us, these our we're a learning, focused products of and getting from these

had oftentimes of where have ] that people virtual learnings. in we And or those We a us longer history [ and them will join North. True virtual have participate waste of hosting thousands call sessions we'll

of like of that efficiency, hundreds as better. on of just days, and and we make best kind to sharing hundreds practices see we're the out operating how theme this bringing look in early And so this talking getting focused love my benefit from we're automation for and peer-to-peer community still this things momentum and people transforming We can we're care that feel fairly of to other a you health perspective, each bringing creating. but to part learning. We probably and appreciate to love the

we're to help So pleased bring to be able together. that

Operator

Our next Evercore line ISI. from Elizabeth question the will come from Anderson of

Unknown Analyst

This Samir to the bit you to Elizabeth you Are like I pay? to related adding products other bit modules quarter. talk customers disruption. early? still about [ the the on newly and if too could upsell conversations patient starting is little you're is on traction Congrats these have was us wondering about on onboarded ] Anderson. a a additional that Patel Or seeing for

Matthew Hawkins

cross-selling that and another team that. We we portion you, teams dedicated I'll Well, focus question. very of growth and to to are market. our focused team. speak have our client our Samir. absolutely high-performing by your and to a on on thank specific is market -- new upselling disciplined, to team focused, We acquisition team way organize our is then focused go only

question, Eligibility software we to also that insurance us to much patient and begin when began software to them ambulatory much as remit we showcasing they several focused deposit growth we these on play. them, change, new to so what an we payment core many grateful prior immediately is why team team additional claims automation, the management, There our there's so specific embedded reaching are the begins that's these authorization, team, clients your our are I'd and client, clients a work We onboard there's get about. And modules as there's soon modules same. And other about talk and platform. we're Because to talking they that's are use, kind including a of others. -- that's coverage onboarded came to system And management. say we focused that consistently to just could think them. out, So health hospital very solutions. -- with then detection module, from but the we

introduce to have client. profiles client layering client showing others power are then harness we're of to that the very that new the of chance show testimonials. clients calculators And working type to any kind of also that ROI are succeed. with, able And software and on of we will We module each kind similar and we're to how others that have these the incremental

that's cross-sell, opportunities. helping us And and that's so engagement client and platform. drive the embedded upsell growth existing believe in why we on our

Unknown Analyst

of contribution like that Got existing the Or onboarding this the put upsell? just rapid maybe house color customers. at of Is that some $XX point? you any from it. related from of is can then clearing And revenues That switch around sense. makes million strictly if the

Steven Oreskovich

Yes. is clearing [indiscernible]. that The vast of majority

Operator

Our Brian line from next the Raymond of from question will James. come Peterson

Unknown Analyst

is [ McCary This for ] here. Jonathan Brian on

durable to an then levers metric drove would you rank quarter. saw mentioned up more impressive I that products [indiscernible] wanted quarter? acceleration NRR how pricing, expansion So this going you forward? do I we expansion how in of broadly be but know could that that ask you and think the the stack just this

Matthew Hawkins

Brian Thanks, Jonathan, Please well. joining. as best give for our

revenue consistent. retention think net our is I -- very

As we quarters XXX%. retention our think, and XXX% noted in XX I net revenue between consistent of remarks, prepared

So we of gross with. It around XX%. did all an which we're for little notice pleased a of retention us last this starts with revenue uptick quarter, bit

we of the algorithm the unpack there and to then our you modest start price a cross-sell So and given it work upsell is increase we're function that we growth value always typically do. delivering a that as clients

that for quarter of bit or a on how that's noticed we anything about specifically so it. Steve, comment overview there in is little you'd think we observed? And the

Steven Oreskovich

Yes. I'd say, metric. an based Jon, is LTM it

quarter. in any activity So single not to it's a specific

volume-based component, that running I rate. made for our quarters now, bridging net the the the about the think another you're the Matt about and gross few two mentioned comment the had is higher when prior expectations you with retention revenue along that piece have past If between than gap

that to think seen third we've quarter helpful the what I number. is So in also

Unknown Analyst

laying -- how guys and on great versus then players performing update appreciate you we the legacy. you legacy, to think share And get Okay. you hoping hearing from I'm job actually Waystar a out Very more I helpful. have gain think also versus to done modern seeing looking you're more an RFPs. complex

hearing share what on So that anything Waystar you're on solutions? can from you modern clients there versus the or is rates win more there

Matthew Hawkins

operating solutions, I'd that and realizing like manual We lot and we pursuing of on what solutions and point rates the are seeing, we're approach. you. to platform go We're the the thank comment is more bear some platform and or many player heroic of make testimonials how their we're a decision on so any things, fact these that competitor partner and and a point we're on seeing lot very to -- that's replacing a homegrown won't decision there. And table. day focused including factors I case into that a client there. What thing Yes, well we They legacy in ROI. market provider start in we begin of even rodeo, to bring increased clients all fragmented. then speak, studies the automation. platform there. a they in track are What's a opportunity they efficiency, scale want large trending positioned. Knowing momentum decision-makers specific win of we're day and bring our tangible focused prospects one believe It's that going decisions. can one Jonathan, very that approach. thematically, approach. solution a cloud-based like to we are work somewhere see. What is, the on this advantages services. Internally, can minds think there to want cases that that they're more addressable that the in modern we we the And out, trusted and a software we isn't will a first that efforts, expand say they're we're a And their making the go-to-market of that how do bit are versus there's we In more use of decision makers that and these that Waystar we And say is are and software

work And specific with how do Waystar. caliber, do I modern that we see there an and modern like I thing, more might might only enterprise toward one so decision-makers leaning be while some software software a scaled, more vendor think

And so are we like several reported We how in with we've that to our the up we compete. what quarters. consistent win rates last set think

Operator

Our of Bank. Deutsche Liz of Lee is from the next question line

Unknown Analyst

role whether trends about claim in or decrease Can provider the any claim seeing helping rates meaningful these We have providers both denials and you're reconcile denials? either in lot claim hearing been a an increase payers of talk organizations about about and from chatter talk of appeals. company's denial about you

Matthew Hawkins

we is you, And trust the lowering there claim payers we efficiency we efficiency Thank occur side. about payer industry. in of denial accurate that. an the from deliver perspective, to industry provider a are acceptance first-pass an mid-service we the begin prevent claims can And deliver we do quickly claims talk to The platform, rate. When we pass are most Yes. is using the abuse, to Liz. that software measure rates. payer we what software refer entire that to the From you one Denied submits have claim a and understand internally the correlate the first understand that's to waste that rates of on fraud, claim measure correlated Waystar's that across things as would work trying and focused payer look adjudicate. clients and denial focused to helping market-leading we And all unfortunate is how acceptance do lower accurately on rates waster platform. that that the first pre-service that cloud-based And to time. believe when the

management really cases software have denial rate. But are and we as offer claim the a event efforts a then, clients much automate helps that Additionally, Waystar's providers, in a offer use a appeal denied that and helping claim in denied, module our does is even many to and claim we get how reduce providers solution to get of that showcase help denied, to reduce management when follow-up appeal, that. able does the their that we

In efforts today. Waystar to fact, there's internal

once for clients follow-up focusing working automating appeal effort we're they interest the think even we help in we of our and an them that use and for up even deserve more work process providers to rapidly with. of One that, management And that the that that Gen have the particular AI perform and they on revenue the is with, the that follow health further will taking get service. receive to cases

Operator

comes question Daniels Ryan the Our next line from Blair. from William of

Ryan Daniels

maybe the one on for strong performance. Matt, Congrats you.

deals. You've discussed parties in when you're more the those involved and highlighting seeing also in RFPs, complexity more uptick

I'm if deals. surface, that at cycle thing or kind But extending the don't sounds for area on you or of see urgent happening? investment, rate more platform-oriented curious the close again, a it such the that still a with be impacting it's So all that's larger, also could sales like good if

Matthew Hawkins

to Thank from you. is We I hear -- complex. well. is doing becoming you, Good that I'd Ryan. what hope it you're say

it's so don't normally And in extending rapid, on know this would beyond those hospital experience. and quickly. Depending a time system, There up to so the decisions we make or it cycles. that I XX-month organization. so we was were cycle year If XX- following what it's earlier certainly sometimes was health sales organizations the where a

appropriate process. decision. a working people to it's discovery We're involved the And the in identify very so much all

are committees. Sometimes there

stakes approach oriented case studies. right our table right expertise tools bear, ] discover the we're proactively references matter we've then Modern So to subject leading with that technology in we're the in. that, to [ recognize cybersecurity. bring living and the world to We and that's

we things that we're that will with the maintain ROI the that of cycle. along calculators in So using, combine all sales us think help will consistency

the continuing, and to win compete can good we rates feel in continue experienced, as continued to And cycle resume then momentum of and see we I types have pipeline. is to that the normal market. we've are about sales the We assuming fashion, we our in earlier, to have of the opportunity sales that mentioned this a more growth

Ryan Daniels

successful outlook meet you mentioned? Obviously, then And highlighted or clients. your that are earlier, kind pain than if with very broader, as those your the really your M&A Okay. curious platform? there's things R&D is maybe I'm we points Very Or can there helpful. with think And event of maybe if North go picture clients bigger that even True that key what impacting any you've other And question. a you current forward?

Matthew Hawkins

Thanks, Ryan.

conferences. One of these advantages real of the hosting

to We management from pain big of that the and and also have bring you rates question to listen, concern. to mentioned a team lives them mentioned and and do an that we product gather the are one we conference point hear And we to Bank exceptional technology the Deutsche feedback. Denial team earlier.

so address mentioned. -- we're Another and actively working to as that, I

and utilization fact one, resources less. Another sometimes or more of amount provider the still same organizations, that they're these they're just increase is Ryan, even having with manage seeing to that the

a And they how always as do automation my more introduce so I organization. form they're to within -- operating gain seem be of looking efficiency for

that these type have clients same new And do team. checking by inform they to reduce we I so long. The we that M&A we of at conference some that for because in the is the disciplined to way AI we work that. burdens seen then reason on on have pain that points. that we're software and that to think the encouraged already the to that showed already work box points we by generative and to a that face attack hearing conference, these of user at interactions, dedicated so offer some we've I'd have informing the head we're listening we learning things was of modules, are all approach the interest so in with And say last we're and thing things much that our our and use information of is the these pain little pods designed we're product the development our we're of where some innovation And also have but

the active are We in market.

the a We they these add face we each the -- And address we've waste day. we successful believe disciplined evaluating history we've to M&A, every had -- pain that will could M&A. be a technologies software our certain platform points very help take that we of providers through to to and think we had will approach

Operator

of Samuel come the Anne And our line question next will from from JPMorgan.

Anne McCormick

tempered just curious, relative And to out where revenue, to now, looking is kind where levels on said surprise expecting expectations? And Maybe of to kind expecting XQ had and call. it you were customers of high. next had earlier, to upside quarter the maybe hold? stay upside think high similar single-digit come that your that year, to your still be I was just utilization to you utilization I your to if utilization then in on would target? stay the were not volume-based you second expectations did were

Steven Oreskovich

the Yes, Ann, question. is appreciate this Steve. I

and growth are volume in continued and to software obviously our think, the continuing the yes, we generate utilizing strong interactions, see above that which volume-based the between patients minimums are strong interactions contract. providers, I to

demand to expectations. To were QX's question actuals about did than in continue, to trying care we our not those would specific -- speak could question, So health that current greater, much the see XXXX, your system to while if your within if what come expectations did that greater be. carry-through too opportunity, to our overly or -- above be

Anne McCormick

That's that really well. you've around to threshold. XX% seen as dollar just nice beats EBITDA some margin revenue stayed that's obviously -- And helpful. then translated But really of kind and outperformance, you

the versus reinvestment So faster leverage potential leverage? on about balancing guess, is there philosophy from just, growth? model do your I curious, how we And think in a

Matthew Hawkins

Annie. Thanks,

So we're pleased.

company That public we looking First quarter highlighted we being EBITDA as we operating full think having public nice said, efficiency. we expenses. a on for being took always of we're EBITDA all, a as XX% that margins, margin, especially of and

operating orient in ourselves efficiencies and dedicated could We how across about cash business. generate focused I'd our we the team fees. the talk active several highlight well. We're reducing towards One, to focused we then patient have as on payment X, on philosophically innovation with and or projects couple. transaction what business we incremental members X with back driving do a that

lowering and payments. interchange -- patient So -- processing with fees exchange associated

great have focused We that. team on a

are providers or other third, approach with direct optimize years. that's a get patients. two is, is the reductions connections longer for to where there connecting most increase in term, to the Annie The then and many with our that payer to one efficient holistic taken much highlight the that digital to We've that. And more patients engagement I'd fee continuing we network, typically highlight I'd payers, associated

we're for and evaluating, that more far we further kind it it harvest cash that performing talk other of as described. things, longer interaction paper-based digitize we in delever do that of be we're see opportunity is for the our We Some and about. But business. pleased to M&A innovation, reinvest reinvest thus and is disciplined commitment as for to do, with go over do driving And and we're how to to we disciplined efficiency our market, business. efficiency operational of we in to do we've constantly use a period in there's vigilant create as time,

Operator

I'm now turn Matt call not this remarks. for time. showing the closing over to questions any any would back I further like at to

Matthew Hawkins

you, Thank Vincent.

people great who I'm We take want So incredible to to a incredible dedicated our alongside. great really companies work we team conclude just grateful setting take I as call, in moment and quickly, thank to have today's this Waystar members. people we -- software

our help We have is do our for they -- caring company admire can public earnings of cost. do make are we're anything company and remarkable journey. inspires them to to on our -- their constantly second public be and this we clients who time patients. for more for our existing more we prioritize to they that productive can and so the just patients. And care both heroes, grateful we're new mission investors And This work it purpose

our the opportunities game confident looking ability far. before We're thus remain strong our about performance lie execute with performance deliver and So ahead, focused on plan. there. pleased We're the And our results way our and in We that we're learning excited executing ahead. quarters in we're to us.

evening. today. all have joining So thank you We you a hope us for great

Operator

in for today's does program. This participation you your Thank conclude conference. the

disconnect. now a have may You Everyone, great day.

Waystar Holding (WAY) 6 Nov 242024 Q3 Earnings call transcript