Waystar (WAY) Q2 2025 earnings summary

Executive summary

• Achieved 15% year-over-year revenue growth in Q2 2025, with Q2 revenue of $271 million and adjusted EBITDA margin of 42%, driven by AI-powered innovations and strong client relationships.

• Net income for Q2 2025 was $32.2 million, compared to a net loss of $27.7 million in Q2 2024; non-GAAP net income was $65.7 million.

• Announced agreement to acquire Iodine Software for $1.25 billion, expected to expand the total addressable market by over 15% and accelerate product roadmap by nearly two years.

• Raised full-year 2025 guidance for both revenue and adjusted EBITDA, supported by strong client retention and robust demand.

• Completed IPO in June 2024, raising $914.3 million in net proceeds, and paid down $1.0 billion in debt, significantly reducing interest expense.

Financial highlights

• Q2 2025 revenue was $270.7 million, up 15% year-over-year; adjusted EBITDA was $113 million with a 42% margin.

• Net income margin was 12% in Q2 2025; adjusted EBITDA margin for the six months ended June 30, 2025, was 41.8%.

• Subscription revenue grew 17% year-over-year to $131.1 million; volume-based revenue grew 14% year-over-year to $138.3 million.

• Unlevered free cash flow for Q2 was $110.8 million, with a 98% conversion ratio to adjusted EBITDA, aided by delayed federal tax payments.

• Interest expense dropped 63.9% year-over-year in Q2 2025, reflecting $1.0 billion in debt repayment post-IPO.

Outlook and guidance

• Raised 2025 revenue guidance to $1.03–$1.042 billion (midpoint $1.036 billion), representing 10% year-over-year growth.

• Adjusted EBITDA guidance increased to $418–$426 million (midpoint $422 million), with an expected margin of approximately 41%.

• Non-GAAP net income guidance at $254 million and non-GAAP EPS at $1.38, both up significantly year-over-year.

• Guidance excludes impact from the pending Iodine Software acquisition, which is expected to close by year-end 2025.

• Iodine Software expected to contribute $120–$125 million in 2025 subscription revenue at 75% gross margin and 40% adjusted EBITDA margin, with $15 million in cost synergies within two years post-close.