Waystar (WAY) Q3 2024 earnings summary

Executive summary

• Achieved Q3 2024 revenue of $240.1 million, up 22% year-over-year, with net income of $5.4 million and adjusted EBITDA of $96.7 million at a 40% margin.

• Net revenue retention was 109%, with 1,173 clients generating over $100,000 in trailing twelve-month revenue, up 14% year-over-year.

• Growth driven by client retention, cross-selling, new client acquisitions, platform innovation, and rapid onboarding after a competitor's cyber event.

• Paid down over $1 billion in debt year-to-date, reducing annual interest expense by more than $100 million and improving credit ratings.

• Completed an IPO in June 2024, raising over $1 billion in net proceeds.

Financial highlights

• Q3 2024 revenue was $240.1 million, up 21.7%–22% year-over-year; adjusted EBITDA was $96.7 million, with a 40% margin.

• Net income for Q3 2024 was $5.4 million, compared to a net loss in the prior year; non-GAAP net income was $25.3 million.

• Unlevered free cash flow for Q3 2024 was $89 million, with a 92% EBITDA to free cash flow conversion.

• For the nine months ended September 30, 2024, revenue was $699.4 million, up 19.7% year-over-year.

• Cash and cash equivalents at September 30, 2024 were $127.1 million.

Outlook and guidance

• Full-year 2024 revenue guidance is $926–$934 million, representing 17–18% growth over 2023.

• Adjusted EBITDA guidance for 2024 is $374–$378 million, with a 40% margin.

• Non-GAAP net income expected to be $47–$50 million, with diluted non-GAAP EPS of $0.30–$0.32.

• Preliminary 2025 revenue expected to approach $1 billion, with high single-digit as-reported growth.

• Management expects continued growth in subscription and volume-based revenues, supported by client expansion and adoption of additional solutions.