Key Highlights

  • Revenue rose 21% to USD 325.6 million, with organic Revenue growth of 10% and subscription revenue up 34%.
  • Income from operations rose to USD 61.3 million from USD 60.2 million as operating expenses rose 27%.
  • Net income was USD 31.0 million, or USD 0.16 per diluted share, versus USD 30.6 million and USD 0.17.
  • The effective tax rate fell to 26.1% from 28.3%, and diluted shares rose to 195.9 million from 181.2 million.

Quarter in Numbers

Waystar Holding Corp. (NASDAQ:WAY), a provider of software for healthcare payments and revenue cycle management, reported third-quarter 2026 revenue of USD 325.6 million, up from USD 268.7 million. The chief financial officer said organic revenue grew 10%, which reflects about one point of pressure from three large client implementations that ramped unusually quickly in the prior-year period, and that subscription revenue was USD 181 million, up 34% and up 12% on an organic basis.

Cost of revenue, excluding Depreciation and amortization, rose to USD 99.2 million from USD 85.1 million, sales and Marketing to USD 52.0 million from USD 45.2 million, general and administrative to USD 51.4 million from USD 32.4 million, and Research and Development to USD 20.3 million from USD 12.4 million. Depreciation and amortization rose to USD 41.5 million from USD 33.3 million. Total operating expenses were USD 264.4 million versus USD 208.4 million, a 26.8% increase by our calculation.

Earnings

Income from operations was USD 61.3 million versus USD 60.2 million. Interest expense, net, rose to USD 18.2 million from USD 16.6 million, and related party interest expense was USD 1.1 million versus USD 0.9 million. Income before income taxes was USD 42.0 million versus USD 42.7 million, income tax expense was USD 10.9 million versus USD 12.1 million, and Net Income was USD 31.0 million versus USD 30.6 million. Diluted Earnings per share were USD 0.16 versus USD 0.17.

Expenses grew faster than revenue, so by our calculation Operating Margin was 18.8% versus 22.4% a year earlier. General and administrative expense grew about 58% and research and development about 64%, well ahead of revenue growth of 21%, while cost of revenue grew about 17%. Subscription revenue was about 56% of total revenue.

Nine Months and Details

For the nine months, revenue was USD 959.2 million versus USD 795.7 million, income from operations was USD 217.8 million versus USD 190.3 million, and net income was USD 115.2 million versus USD 92.1 million, or USD 0.59 per diluted share versus USD 0.51. The company recorded fees to channel partners of USD 22.8 million versus USD 19.8 million in the quarter and capitalized USD 9.5 million of software development costs versus USD 4.6 million, with amortization of capitalized software of USD 4.7 million. Revenue recognized from beginning deferred revenue was USD 10.9 million versus USD 0.8 million, and sales commission asset amortization was USD 4.2 million versus USD 3.3 million. Interest income on Investment securities was USD 2.1 million.

Growth and Margin Indicators

Management said it remains confident in the underlying business, with commercial momentum translating into low double-digit revenue growth, continued investment in the platform and adjusted EBITDA margins of 40% or greater. It also referred to near-term revenue dynamics that affect its outlook. Items to track include the gap between reported and organic growth, expenses rising faster than revenue, research and development growth and client implementation timing.