Healthcare payment software maker Waystar reported first-quarter sales of $313.9 million, a 22% increase from the same period last year, as management reaffirmed its investment in artificial intelligence and innovation.
In first-quarter results released Wednesday afternoon, Waystar reported net income of $43.3 million, or GAAP net income of 22 cents per share. The company also reported first-quarter adjusted EBITDA of $135.4 million.
The company reported non-GAAP earnings per share of 42 cents, beating analyst estimates of 39 cents per share. Waystar’s first-quarter sales also exceeded Wall Street analysts’ expectations of $311.72 million for the same quarter.
Waystar provides healthcare payment and revenue cycle management tools to 30,000 clients representing more than 1 million individual providers, and its platform processes more than 7.5 billion healthcare payment transactions.
Analysts at William Blair said the company outperformed its first-quarter results, delivering “strong sales and earnings results.”
“In our view, Waystar continues to be the leader in end-to-end RCM software and is leveraging its overall position, scale and advantages to enhance its platform with new innovations,” Ryan Daniels, Group Head of Healthcare Technology and Services at William Blair, said in an analyst note.
On an April 29 conference call with investors to discuss first-quarter results, CEO Matt Hawkins said Waystar was “off to a solid start to the year,” reflecting “strong execution across the business and our innovation roadmap.”
“What makes Waystar different is the tangible value we deliver,” Hawkins said. “Our platform is purpose-built to drive meaningful ROI for healthcare providers by integrating powerful LLM into our core workflows, increasing accuracy, reducing friction, and lowering the total cost of operating the revenue cycle.”
Additionally, according to Hawkins, AI has become meaningful to “expand the overall market opportunity that Waystar can address.”
“We are building toward what we believe is the future of this industry: autonomous revenue cycle platforms,” he said.
Hawkins said AI-powered solutions make up about 50% of the company’s solutions, and nearly 40% of its revenue comes from AI-incorporated workflows.
“The traction of AI is accelerating,” Hawkins told investors on a conference call, noting that AI-powered features drove about 40% of new bookings in the first quarter. “Our clients relied on the platform for prevention, automation, and visibility rather than downstream rework,” he said.
Waystar is shifting its focus from task-level automation to agent workflows. “This change opens up greater opportunities for the approximately $100 billion in annual revenue cycle labor services currently performed across the industry. We believe we are well-positioned to automate a significant portion of this labor pool through the introduction of new AI-powered capabilities such as denials, pre-approvals and collections,” Hawkins said on the earnings call.
Waystar’s leadership reiterated patient volume trends noted by providers and payers in the first quarter, emphasizing that patient volume is down given a weaker-than-expected flu season, winter storms, and policy headwinds like those of last year.
The expiration of ACA subsidies impacted the company’s volume revenue. But executives said this was offset by strong subscription sales.
Hawkins said the company is “balancing targeted investments with profitability” in innovation and AI solutions, including the $1.25 billion acquisition of AI-driven RCM company Idoine Software. The acquisition will enable the company to leverage Iodine’s AI capabilities to further streamline provider management tasks, such as usage management and identifying pre-billing revenue leakage.
Mr. Hawkins said the early integration is “moving ahead of schedule” and that the company “continues to evaluate the strategic rationale for the acquisition.”
“Iodine extends waystar to mid-cycle, where clinical intelligence plays a critical role in preventing denials and ensuring compliant reimbursement,” Hawkins said.
The company continues to deploy new generative AI capabilities and advanced automation to manage RCM workflows. Most recently, it launched an AI solution earlier this month aimed at restoring revenue for providers lost due to payer adjustment. Hawkins told Fierce Healthcare that the tool reduces reconciliation time by more than 80% and provides 100% visibility into payer collections.
