Waystar (WAY) 2026 年第三季法說會：新簽約額成長 25%，調升 EBITDA 展望

Waystar (NASDAQ: WAY) 公布 2026 年第三季營收年增 21%，得益於訂閱業務成長、客戶關係擴大以及對 Iodine 的收購。新簽訂單（Bookings）保持強勁，但較長的實施週期與營收組合的變化對近期展望帶來壓力。

重點速覽

• 第三季營收年增 21% 至 3.26 億美元，有機營收成長 10%。
• 調整後 EBITDA 成長 24% 至 1.39 億美元，利潤率達 43%。
• 年初至今新簽訂單成長 25%。金額超過 10 萬美元的商機訂單成長逾 30%，相關的待實施積壓訂單（backlog）擴增超過 50%。
• 截至第三季末，Waystar 過去 12 個月貢獻營收超過 10 萬美元的客戶達 1,488 家，年增 14%。這些客戶目前約占總營收的 75%。
• 管理層預計全年營收為 12.77 億至 12.87 億美元。預計有三大因素將使第四季成長率減少約 4 個百分點：從紙本轉向數位對帳單、Iodine 營收認列時程，以及去年同期的高基期比較。
• 公司將全年調整後 EBITDA 展望的中位數上調 600 萬美元，至 5.43 億至 5.49 億美元之間。

核心財務數據

業務與營運表現

Waystar 的商業成長動能仍是核心主題。年初至今新簽訂單成長 25%，其中現有客戶貢獻了約 60% 的新簽訂單。該公司贏得迄今最大的新客戶：一家年淨患者營收約 70 億美元的美東醫療系統，選擇採用 Waystar 的完整平台，並計劃取代 20 多家供應商。

過去 12 個月貢獻營收超過 10 萬美元的客戶數量達到 1,488 家，季增 2%，年增 14%。這些客戶關係約占總營收的 75%，高於兩年前的約三分之二。平均每家大型客戶使用約 5 個 Waystar 模組，而公司在六大產品系列中共提供 30 多個模組。

金額超過 10 萬美元的商機訂單年增超過 30%。相關的待實施積壓訂單增加超過 50%，兩年複合年增長率達 35% 左右。管理層表示，規模較大的平台部署可能需要 12 至 18 個月才能轉化為已認列營收。

Iodine 與中週期業務擴充

Iodine 的新簽訂單超出年初至今目標的 74%。臨床病歷完整性與帳單前異常檢測前九個月貢獻了近 3,000 萬美元的新簽訂單，其中第三季約占 1,500 萬美元。兩者的合計潛在訂單（pipeline）已超過 1 億美元。

採用 Iodine 功能的 Waystar 現有客戶在第三季貢獻了約 900 萬美元的新簽訂單，季增 50%。管理層指出，需求正日益轉向帳單前異常檢測，該服務採用基於績效的定價模式，比訂閱模式需要更長時間才能產生已認列營收。

AI 與平台開發

Altitude AI 驅動的產品約占第三季新簽訂單的 43%。超過 130 家客戶加入 Waystar 的早期採用者計畫，更有超過 100 家客戶參與對話式分析的早期體驗。早期使用者報告指出，資料分析時間最多可減少 75%。

Waystar 還推出了自主申報重送功能。根據初期申報類型和早期採用者結果，管理層預計該功能每年可自主重新提交高達 50 億美元被退回的申報，並每年減少超過 40 萬小時的人工作業。

該公司在近期產品路線圖中還規劃了 20 多項 AI 功能。管理層計畫透過推出新產品、現有模組的高階版本，以及基於績效或使用量的收費方案來實現 AI 商業化。

Waystar 每年處理超過 85 億筆交易，代表超過 3 兆美元的總申報金額，並連接約 150 萬家醫療提供者。在 2026 年期間，公司新增了 100 多個直接健康保險計畫連接，支援每年近 5,000 萬筆交易。

管理層業績指引

管理層將第四季營收成長承壓約 4 個百分點歸因於三大因素：患者對帳單從紙本轉為數位發送的速度加快、Iodine 基於績效的帳單前異常檢測產品的營收轉化較慢，以及去年同期有三家客戶導入速度異常快速所致的高基期比較。

公司維持其低雙位數營收成長以及調整後 EBITDA 利潤率至少 40% 的長期目標。公司計劃在下一季度提供正式的 2027 年指引，並補充有關新簽訂單與待實施積壓訂單轉化的更多細節。

風險與關注焦點

• 規模較大且涵蓋面較廣的平台交易可能需要 12 至 18 個月才能完成實施部署，進而延後新簽訂單與積壓訂單轉化為營收的時間。
• 從紙本轉向數位對帳單會減少近期的患者付款營收，但管理層認為數位發送對利潤率更為有利，並預期此轉型將持續數年。
• Iodine 的合約中，基於績效的帳單前異常檢測佔比增加，導致新簽訂單、實施部署與營收認列之間的間隔時間拉長。
• 第四季的基期比較包含去年同期三家大型客戶異常快速放量的影響。
• 由於患者已達到高自付額健康保險計畫的自付額限額，第四季的患者付款額通常低於第三季。
• 第四季調整後 EBITDA 金額預計將季減，主要原因是近期營收波動性、產品組合變化，以及對 AI 和產品開發的預期投資。

分析師問答亮點

新簽訂單與營收成長對比：管理層表示需求與得標率保持健康。新簽訂單成長 25% 與近期營收成長之間的差距，主要反映了大型客戶的上線實施時程較長，而非需求疲軟。

大型客戶成長驅動因素：Waystar 不僅在初始階段銷售更多模組，還鎖定擁有多個設施的大型機構。管理層也看到了巨大的交叉銷售潛力，因為大型客戶目前平均僅使用 5 個模組。

Iodine 營收能見度：管理層提到年初至今的新簽訂單約為 3,000 萬美元，潛在訂單（pipeline）超過 1 億美元，且早期採用者成果正面。管理層持續預計 Iodine 將在 2027 財年帶來正面獲利貢獻，但並未提供正式的 2027 年指引。

AI 商業化：Waystar 預期 AI 將透過新產品、現有軟體的高價版本、基於績效的方案以及提升客戶留存率來貢獻營收。管理層還認為，AI 能透過將目前由醫療提供者人工執行的工作自動化，來擴大總可服務市場 (TAM)。

利潤率：公司打算在持續投資產品、AI 及創新的同時，維持至少 40% 的調整後 EBITDA 利潤率。管理層表示，他們是以全年角度管理獲利能力，而非追求單一季度的最佳化。

淨營收留存率：108% 的淨營收留存率獲得 97% 的毛營收留存率支持。管理層指出對大型客戶進行交叉銷售是邁向歷史 NRR 區間高點的最明確途徑。

法說會逐字稿全文

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完整財報電話會議逐字稿

管理層陳述

Operator

Good day, and thank you for standing by. Welcome to the Waystar Third Quarter 2026 Earnings Conference Call.

[Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Edward Parker, Head of Investor Relations. Please go ahead.

Edward Parker

Thank you, operator. Good afternoon, everyone, and thank you for joining Waystar's Third Quarter 2026 Earnings Call.

Joining me today are Matt Hawkins, Waystar's Chief Executive Officer; and Alpana Wegner, Waystar's Chief Financial Officer.

This afternoon, we issued a press release announcing our financial results and published an accompanying presentation deck. You can find these materials at investors.waystar.com.

Before we begin, I would like to remind you that this call contains forward-looking statements, which are predictions or beliefs of future events or performance. Examples of these statements include expectations of future financial results, growth and margins. These statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed in these statements. For a full discussion of the risks and other factors that may impact these forward-looking statements, please refer to this afternoon's press release and the reports we file with the SEC, all of which are available on the Investor Relations page of our website. Any forward-looking statements made on this call are only as of today and will not be updated unless required by law.

We will also discuss certain non-GAAP financial measures. These measures are intended to provide additional insight into our performance and should not be considered in isolation or as a substitute for financial information prepared in accordance with GAAP. We have provided reconciliations of the non-GAAP financial measures included in our remarks in the most directly comparable GAAP measures, together with explanations of these measures in the appendix of the presentation slide deck and our earnings release.

With that, I'd like to turn the call over to Matt.

Matthew Hawkins

Thanks, Edward, and good afternoon, everyone. Thank you for joining our third quarter earnings call.

Waystar delivered another strong quarter. Revenue grew 21% year-over-year and 10% organically. Adjusted EBITDA grew 24% with an adjusted EBITDA margin of 43%, and we generated $150 million in unlevered free cash flow. We ended the quarter with 1,488 clients generating more than $100,000 of trailing 12-month revenue, up 14% year-over-year. Commercial activity reflected healthy demand and robust bookings across the business. We are establishing larger, broader client relationships as large health care organizations increasingly look to waste or to support more of the revenue cycle through a single connected platform. We made meaningful progress across our product road map, including new AI-powered and agentic capabilities that advance our vision of creating the industry's first autonomous revenue cycle.

This quarter reflects strong progress against our 3 execution priorities: driving broader adoption of the Waystar platform, extending our reach through partners and integrations and advancing AI and innovation. First, driving broader adoption of the Waystar platform. We're expanding our relationships with existing clients and moving further up market with new clients, our connected end-to-end platform gives us the opportunity to support the entire revenue cycle. Within our large client cohort, which we define as clients generating more than $100,000 in LTM revenue, the average client now uses approximately 5 Waystar product modules. With more than 30 modules across 6 product families, we see significant opportunity to continue driving broader platform adoption within these relationships.

Second, extending our reach. We're expanding our distribution through strategic partners and deeper integrations that bring Waystar into more provider workflows. Across our ecosystem of more than 200 channel partners, we have added more than 20 new integrations this year that expand our reach and create new opportunities for growth.

Third, advancing AI and innovation. We're advancing our product road map across the Waystar platform including expanding our position in the mid-cycle and bringing new altitude AI-powered and agentic innovations to market. Our near-term road map includes more than 20 planned AI capabilities accelerating the autonomous revenue cycle vision to reduce manual work, automate increasingly complex tasks and improve financial and operational outcomes for our clients.

We delivered another quarter of strong commercial momentum. Year-to-date bookings grew 25% year-over-year demonstrating continued demand and solid execution across the business. Let me bring that momentum to life with a few examples of what we're seeing in the market. This quarter, we secured the largest new client win in Waystar's history. In a competitive process, a major East Coast health system representing approximately $7 billion in annual net patient revenue selected Waystar's full platform across patient access, mid-cycle and back-end revenue cycle operations. The organization plans to replace more than 20 separate vendors with Waystar as it simplifies its technology infrastructure and streamlines operations.

We're also seeing strong momentum within our existing client base, which accounted for approximately 60% of our year-to-date bookings. One example is a large Texas-based health system that selected our prebill anomaly detection solution, expanding its relationship with Waystar and displacing 2 incumbent vendors. This organization already uses Waystar across claims management, patient access and clinical documentation integrity, demonstrating our ability to broaden strategic relationships across the revenue cycle. This is also a great example of the opportunity we saw in bringing Waystar and Iodine together. By combining Waystar's financial data, workflows and connectivity with Iodine's clinical intelligence, we're creating differentiated capabilities that allow us to solve more complex problems for our clients and expand our relationships over time.

We're seeing that strategy translate into strong commercial results. Iodine's bookings exceeded our year-to-date plan by 74%. A key driver has been our go-to-market strategy of bringing together clinical documentation integrity known as CDI, and prebuilt anomaly detection to address a broader set of mid-cycle needs. Across these 2 solutions, we generated nearly $30 million of year-to-date bookings including approximately $15 million in the third quarter alone with a combined pipeline of more than $100 million.

We're also seeing encouraging cross-sell momentum. Existing Waystar clients adopting iodine capabilities contributed approximately $9 million of bookings in Q3, up 50% sequentially. Taken together, these results demonstrate the opportunity we have to bring more of Waystar's capabilities to our installed base, expand our strategic client relationships and drive durable growth across the platform.

We're also extending our reach through strategic channel relationships, particularly across the ambulatory market. During the quarter, we expanded our partnership with a leading physical therapy practice management system giving Waystar distribution into an additional segment of its client base. This expansion displaces 3 incumbent revenue cycle vendors and extends Waystar's reach to nearly 4,000 providers across more than 2,500 sites, representing approximately 17 million claims annually. Decisions like these reflect the trust we've built with channel partners, the breadth of our platform and our ability to deliver real ROI.

These wins demonstrate how our platform strategy is translating into competitive success. We are winning large new clients, replacing fragmented incumbent solutions and expanding relationships with clients and channel partners select Waystar to tackle more of their revenue cycle challenges.

Our trusted, connected and independent platform is built on 4 structural foundations we've discussed before: mission-critical infrastructure, proprietary data and extensively deployed network and deep domain expertise. Together, these strengths enable us to connect providers, payers and patients across the revenue cycle. Our network continues to grow in both scale and depth. Waystar now processes more than 8.5 billion transactions annually, representing more than $3 trillion in gross claims. We connect approximately 1.5 million providers and our clinical intelligence spans approximately 1/3 of U.S. hospital discharges.

We continue to deepen our payer connectivity. In 2026, we've added more than 100 direct connections to health plans, supporting nearly 50 million transactions annually. These deeper integrations increased the value of our network for clients and further strengthen Westar's role as the connected financial operating layer for health care. And we believe these advantages become even more valuable as AI accelerates across health care. We're moving beyond AI that identifies opportunities and recommends actions toward AI agents that can execute increasingly complex work on behalf of our clients.

We continue to make meaningful progress advancing AI and innovation across the Waystar platform. As AI accelerates across health care, we believe the value of a trusted, connected and independent platform becomes even greater. The revenue cycle doesn't operate within a single application. It spans providers, payers, patients and thousands of financial workflows. Waystar is the system of action that sits at the intersection of those workflows. One example is the industry's first autonomous claim resubmission capability, which we launched this quarter and is now in production as part of our premium claims management offering, powered by Altitude AI, the capability interprets payer responses, applies peer specific intelligence to determine next action and autonomously resubmit eligible rejected claims with minimal human intervention.

Based on early adopter results and the initial claim types supported, we estimate this capability could autonomously resubmit up to $5 billion in previously rejected claims annually with the potential to eliminate more than 400,000 hours of manual work each year. For clients, that means lower administrative costs, faster reimbursement and improved financial performance. For Waystar, we believe it creates opportunities to expand adoption of our premium offerings and drive additional transaction volume across the platform.

We're putting AI to work in new ways across the Waystar platform. More than 100 clients are participating in early access for conversational AI within our premium analytics offering, clients can quickly analyze complex revenue cycle data by simply asking questions in natural language. Early adopters have reported up to a 75% reduction in time spent on data analysis. Mid-cycle is a strategic part of how we're expanding the Waystar platform. We're combining Waystar's financial data, payer intelligence, workflows and connectivity with Iodines clinical intelligence to bring greater automation earlier in the revenue cycle, as quality comes an increasingly important component of reimbursement, will extend our prebill anomaly detection capabilities into quality-related workflows, further connecting clinical and financial performance.

We're seeing this innovation translate into commercial momentum. Altitude AI-powered offerings represented approximately 43% of third quarter bookings. More than 130 clients have joined our early adopter program, helping us test and refine new capabilities as we bring them to market. We also saw strong client engagement at our recent Waystar True North conference, where a majority of surveyed attendees said they were more likely to expand the number of Waystar products their organizations use following the event.

Taken together, these proof points reinforce our long-term opportunity ahead as we bring AI more deeply into the revenue cycle. To help lead this next phase, we recently welcomed Amit Khanna as our Chief Product and Technology Officer. Amit brings more than 25 years of enterprise technology experience, most recently leading health care at Salesforce, where he helped bring agent force for health to market. His experience strengthens our ability to accelerate AI innovation and execute against our long-term vision.

We're pleased with the progress we're making across our platform, product road map and commercial execution. A key part of our strategy is signing larger, broader platform relationships, and we're seeing strong success here. As we sign more of these larger deals, we are seeing implementation and revenue ramp periods that are longer than we originally anticipated. These relationships represent significant long-term revenue opportunities with revenue building as clients implement and adopt more of the Waystar platform.

Other factors are also affecting our near-term revenue outlook, which Alpana will discuss. We are confident in the underlying business and focused on translating our commercial momentum into low double-digit revenue growth while continuing to invest in the Waystar platform operate with discipline and deliver adjusted EBITDA margins of 40% or greater. Alpana will walk through our updated outlook, the near-term revenue dynamics and how we're thinking about the business from here.

Alpana, over to you.

Alpana Wegner

Thank you, Matt, and good afternoon, everyone. It's great to be here for my first earnings call as Waystar's CFO. Since joining Waystar, I've been impressed by the depth of the team the strength of the Waystar platform and the opportunity ahead.

I'll start with our third quarter results and then cover our updated outlook. Revenue was $326 million, an increase of 21% year-over-year. Organic revenue grew 10%, and as anticipated, reflects the approximately 1 point of pressure from 3 large client implementations that ramped unusually quickly in the prior year period. Subscription revenue was $181 million, an increase of 34% year-over-year. On an organic basis, subscription revenue grew 12%, reflecting continued strength in the core Waystar business. Volume-based revenue was $143 million, an increase of 8% year-over-year. Volume-based revenue improved from the second quarter and was in line with our expectations. Provider revenue was $243 million, an increase of 28% year-over-year.

On an organic basis, provider revenue grew 11%. The Patient payments revenue was $82 million, an increase of 5% year-over-year, reflecting the shift from print to digital statements we have discussed throughout the year. Net revenue retention was 108%, consistent with our historical range, demonstrating continued expansion with our existing client base. As we execute our strategy to drive broader Waystar platform adoption, our large client relationships are becoming an increasing important driver of our business. These relationships now represent approximately 75% of revenue compared with roughly 2/3 just 2 years ago.

We are seeing momentum across 3 indicators: growth in the number of clients, strong bookings and expansion in our implementation backlog. Specifically, clients generating more than $100,000 of trailing 12-month revenue increased to 1,488 during the third quarter, up 2% sequentially and 14% year-over-year. Year-to-date bookings from opportunities greater than $100,000 grew more than 30% year-over-year. And implementation backlog associated with these larger opportunities increased more than 50% year-over-year and have grown at a mid-30% 2-year CAGR.

These trends are important because they provide visibility into the commercial activity that will contribute to future revenue growth. Larger, broader platform implementations naturally have longer revenue conversion times, which can extend to 12 to 18 months. As we move through our planning process, we are focused on providing investors with greater insight into how the commercial momentum translates to recognized revenue. We expect to provide additional context with our formal outlook next quarter.

Adjusted EBITDA was $139 million, an increase of 24% year-over-year and adjusted EBITDA margin was 43%. Adjusted EBITDA performance reflects continued operating leverage in our business, disciplined expense management and gross merchant expansion from efficiencies across the Wear platform. and favorable revenue mix, inclusive of the shift away from lower margin revenue. GAAP net income was $31 million or $0.16 per diluted share. Non-GAAP net income was $87.1 million and diluted non-GAAP net income per share was $0.44.

Turning to the cash flow statement and balance sheet. Our business continues to generate strong high-quality cash flow. Cash flow from operations was $104 million and unlevered free cash flow was $115 million. Capital expenditures, including capitalized internally developed software, were $10 million in the quarter. We continue to invest meaningfully in our platform, AI and automation capabilities. as we advance our vision for the autonomous revenue cycle while maintaining strong profitability and disciplined investment across the business. For modeling purposes, we currently expect capital expenditures for fiscal year 2026 to be $55 million to $60 million. As a reminder, we can have variability in capital expenditures from 1 quarter to the next primarily due to timing of investments in our platform infrastructure.

We ended the quarter with approximately $277 million of cash and short-term investments. Our net leverage ratio was 2.2x at quarter end, representing more than 1 full turn of leverage reduction over the past 12 months and ahead of the commitment we made. Our capital allocation priorities remain unchanged. During the quarter, we repurchased approximately $21 million of Westar stock bringing accurate repurchases under our $200 million authorization to approximately $33 million through September 30. We continue to be focused on investing organically in the business complemented by selective M&A, maintaining a disciplined balance sheet through debt reduction and returning capital to shareholders through our share repurchase program.

Turning to our outlook. We now expect full year revenue of $1.277 billion to $1.287 billion, with a midpoint of $1.282 billion. This implies fourth quarter revenue of approximately $323 million and revenue growth of approximately 6%. I want to walk you through the 3 dynamics that are informing and shaping our expectations for Q4. We First, the impact of the transition from printed patient statements to digital delivery within our patient payment business has increased from our expectations earlier in this year. We continue to view the shift towards digital as the right long-term direction for providers, patients and Waystar. Digital delivery offers a better patient experience and more attractive unit economics.

Second, the mix of commercial activity for iodine has shifted towards prebill anomaly detection, where implementation performance-based revenue model creates a longer period between booking and recognized revenue. As a result, we are seeing lower levels of revenue from Iodine than previously anticipated in full year 2026. Importantly, our view of the strategic opportunity and our expectations for the accretion in fiscal year 2027 are unchanged. Given the strong commercial momentum we're seeing in iodine bookings and increasing demand for prebuilt anomaly detection. Third, our fourth quarter growth comparison reflects 3 large client implementations that ramped unusually quickly in the prior year period.

Taken together, these 3 factors will impact our expected revenue growth rate for the fourth quarter by approximately 4 points. Without these 3 factors, our normalized fourth quarter growth rate would be approximately 10%. On a full year basis, our guidance at the midpoint implies normalized organic revenue growth of approximately 11%, consistent with our low double-digit long-term growth target. Importantly, many of the comparison dynamics discussed throughout 2026 will roll off as we exit the year, providing a cleaner underlying comparison going forward. As a reminder, consistent with prior years, we typically see seasonally lower patient payment volumes in the fourth quarter compared with the third quarter as patients meet their high deductible health plans.

Turning to profitability. We are raising our full year adjusted EBITDA outlook to $543 million to $549 million, with a midpoint of $546 million, an in base of $6 million from our prior midline. This apply fourth quarter adjusted EBITDA of approximately $135 million, representing a margin of approximately 42% and full year EBITDA margin of approximately 42.5% at the midpoint. Our margin reflects the scalable nature of our platform and disciplined cost management, balanced against planned ongoing investments in advancing AI and innovation.

In closing, we delivered strong third quarter results and executed across our strategic priorities. The commercial traction we're seeing reinforces the strength of our competitive position, our underlying business and the opportunity ahead. the revenue dynamics we discussed are largely driven by timing and year-over-year comparisons rather than changes in underlying demand. We believe this distinction is important in understanding our near-term performance.

Looking ahead, our focus remains on converting strong bookings and expanding backlog into durable revenue growth while maintaining our financial discipline and profitability. We are confident in our long-term opportunity and strength of our financial model.

With that, operator, we're ready to take your questions.

Operator

[Operator Instructions] Our first question comes from Brian Peterson with Raymond James.

分析師問答

Brian Peterson

So maybe just wanted to start on some of these really strong bookings numbers that you gave. Matt, those are well above your normalized growth rates that you've called out that are in the low double digits. Like can you kind of just walk us through the disconnect between the bookings and the revenue growth? I know there's going to be some variability on implementations. But bookings is the best leading indicator. So just kind of want to understand how that's going to translate into the revenue growth going forward.

Matthew Hawkins

You bet. Yes. Thanks, Brian. We're really pleased with the year-to-date bookings growth. As we highlighted in the prepared remarks, 25% year-over-year growth including the largest new client win in our company history. We're seeing really nice installed base growth. We're growing with existing clients. [indiscernible] with that. And that is, as you said, that is leading to large client implementation backlog of 50% year-over-year growth.

So the front portion of that, the bookings converting to backlog, contracted backlog, now looking ahead to converting that to revenue, gives us confidence in our long-term low double-digit revenue growth rate. I would just say qualitatively, and then I'll turn it to Alpana for perhaps a comment.

We are seeing strong demand. We're not seeing a change in the competitive environment for our win rates, and we're pleased with that. What our focus is on is converting these larger bookings, which, as we've highlighted, tend to have longer implementation ramp time. This is in part because -- so a client who's joining us, especially if they're larger, they may have their own planning cycles. So they're selecting a vendor well in advance of when they're actually going to implement software. We can implement very rapidly, and we have a dedicated team of people focused on ramping that implementation to realize revenue as quickly as possible. But that's the phenomenon that we're experiencing.

So I just would summarize by saying a lot of confidence and a sense of momentum as we convert sales activity to strong bookings results. And now as we move out through the system, we're excited about the long-term double-digit opportunity to drive revenue.

Brian Peterson

Great. Maybe just a follow-up, Alpana. Did you size the impact of the shift from print to digital? And I appreciate that's the better way to address value for customers. But any help on what that change in mix could potentially be going forward? Is this something that we should expect to continue into 2017 and beyond?

Alpana Wegner

Yes. Thanks, Brian, for the question. From a saving perspective, what I can share with you is, as I mentioned, we see a couple of dynamics in Q4, largely timing and year-over-year comp. One of them is the print digital shifts that we're seeing. And I would say that from a long-term perspective, we see our customer base continuing to use both print and digital. So we see this as a quarter of volume variability that we're seeing in the near term. But from a longer-term perspective, I would say that what we've been talking to you about all year has not changed, which is we continue to see a mix there taking place. And we've got solutions in the market that are there to meet the demand from a digital perspective as well.

And I think as you know, we also see this as being very margin friendly to us in terms of that shift being in the near term, contributing from the margin, but even longer term, seeing that being accretive to our business.

Matthew Hawkins

Right. And I would add, Alpana, I would add that we view this as a multiyear transition. This isn't something that is more sudden than that, we could view it over several years, and we have solutions that address both. And the important thing is the value of keeping the provider connected to the patient in the way they want to be communicated too. And in order for that provider to help the patient understand financial responsibility and secure payment from that patient.

Operator

Our next question comes from Ryan Daniels with William Blair.

Ryan Daniels

Yes. Congrats on the strong bookings performance. I appreciate the new metrics as well. So I don't know if that's, Alpana, but I really appreciate that. So I guess 1 of the questions is going to be in regards to the bookings strength. I'm curious if you're seeing customers buying more modules at once and that's driving this uptick in larger bookings? Or are you seeing kind of larger clients with higher net patient revenue, like the example you gave of the $7 billion client locking into the funnel and converting to bookings, which of those 2 is kind of more impactful for the growth algorithm?

Matthew Hawkins

Thanks, Ryan. We see it both actually. We see -- we're focused on offering more of our platform at the outset. As you'll recall, we have a robust sales discovery process, where we really try to understand what the needs of the prospect or the client are. And increasingly, we're promoting or showing more of the Waystar platform at the house. So that's off the leading to more solutions packaged together. It's great that we have solutions across the front, middle and back. And as we showcase the strong ROI that we're able to deliver, we're excited about the phenomenon of having clients or prospects select us and then replace the point solutions that they have been using with a single platform approach.

So that's 1 thing. The other thing is we're calling on larger accounts. And because we do and because of our robust discovery process, we go into these accounts. We understand what their current operating metrics look like, and then we're able to call it those accounts. Certainly, we're promoting more of the Waystar platform and packaging those solutions. But it's still often the case that just because the account is larger, they may be working across multiple facilities. And that's often contributing to the stronger and higher average sales size.

Alpana Wegner

Yes. And Ryan, Alpana here. I would just share a couple of other points there. Just underscore the opportunity from a cross-sell. We did share that the larger customers who we do see as having both strategic value from a long-term retention perspective, as well as expansion opportunities. What we see today in that client base of the larger clients that are over $100,000 is on average 5 products, which, against a portfolio of 25 plus products across 6 categories, we see as having meaningful cross-sell opportunities. Just connect back, and I will take credit for the metrics that were over whatever here. But just to connect it back to a few of the metrics that we shared with you today.

Ryan Daniels

All right. Well, we do appreciate it. Look forward to some other new ones when we get the guidance. I'll hop back in the queue in the interest of time.

Operator

Our next question comes from Stan Berenshteyn with Wells Fargo Securities.

Stanislav Berenshteyn

Maybe stepping back a bit from the quarter's results. I'm wondering how are providers approaching large outsourcing contracts now that AI can do more of the work? And when you are competing against those vendors, are you seeing any of your wins replacing outsourced labor?

Matthew Hawkins

Thanks, Dan. We -- what I'd say is we think that the outsourced portion of the market is somewhere between 15% and 20% of the total market today. And then the in-source part of the market tends to be the remainder. Included in the in-sourced or the market is technology and labor spend, as you know. And so what we would see, we don't necessarily see those outsourced vendors showing up in the in-source side. We have relationships with several of them. So as they attempt to grow, we would grow with them, which we're grateful for. What we are seeing is the AI definitely expands the Waystar opportunity. And when you think about how we view the market ahead of us, we believe that the big unlock is that AI can replace more and more labor.

And so that expands the addressable market for us. And as you look over the longer term, that's what is causing most of our excitement. So we can grow with the outsourcers as they use our solutions internally in their organizations. We -- we don't necessarily see a competitive dynamic shift in the market that we're pursuing today. And we see longer term the opportunity for us even on the insert side, to displace labor that is resident inside these provider organizations with intelligent AI-powered capabilities that lead to smarter solutions higher return on investment and overall lower cost to collect. So that's our focus.

Stanislav Berenshteyn

Got it. And just as a quick follow-up. Just in terms of bookings, obviously, strong performance that you called out. But -- can you maybe share how much of your bookings came from channel partners versus maybe more of the internal sales efforts?

Matthew Hawkins

We don't necessarily disclose the portion that comes from channel partners, Stan. What I would highlight is most of our channel partner relationships tend to be on the ambulatory side of the market versus the acute side of the market. We feel like part of our addressable market is reachable because of the really strong channel partner relationships that we do have. I would characterize -- without disclosing specifically, I would characterize that we do have a strong channel partner relationships and a fair amount of the ambulatory oriented sales bookings come through a trusted channel partner relationship.

Operator

Our next question comes from George Hill with Deutsche Bank.

George Hill

I'll say Alpana, I will echo my thanks on the new metrics, especially the product density metrics, which I know I mean a lot of investors have been looking for.

My question is, given the bookings and backlog growth that you guys discussed and at this distance, is there any reason why 2027 growth shouldn't be at least in line with the company's long-term growth algorithm, if not faster, given kind of the step down in Q4 expected growth.

Alpana Wegner

Yes. Thanks for the question, George. And -- how we think about 2027 is, as we've shared in my comments, -- we are still in the planning process, and we're still reviewing our overall view of 2027. I am happy to just anniversaried my first 90 days. And I'm, as you can imagine, spending a lot of time on 2027, and the things that are shaping our thinking around 2027 are exactly what you've commented on, what we have in contracted backlog? What do we have in bookings momentum and the pipeline and the demand. I did share we see [indiscernible] accretive in 2027, and so that is also shaping our thinking as well as what we're seeing from a shift mix in print to digital.

That all to be said, right now, our focus is finishing Q4 strong. and making sure we deliver against our commitments and execute well against the business priorities. And I'm very much looking forward to next quarter coming back with a view of 2027 with some better or more complete context and color around the growth drivers.

Operator

Our next question comes from Michael Cherny with Leerink Partners.

Michael Cherny

Maybe if we can just dive in a little bit on the growth dynamics? Iodine, I hear you on some of the components related to the timing and elongation of revenue recognition, how do you get visibility into that getting better? And if you could just dive a little bit more into the why behind it, that would be great.

Alpana Wegner

Yes. I'll maybe start and then Matt, please do add on. In terms of what gives us confidence and visibility into Iodine, I'd share with you a couple of data points. One is we see strong bookings and demand, that demand is through the pipeline. So as we shared, $30 million of bookings through the first 9 months of the year, is exceeding our expectations that is 74% above plan.

So having the contract booked and sitting in backlog give us a reasonable amount of visibility into our thinking around Iodine and in particular, around 2027. And as Matt shared, we also see the demand continuing with $100 million of pipeline. And we've got several strategic go-to-market motions underway to optimize against that demand. And that is really the question of the why. The why is we are viewing this as a long-term strategy and execution. We view it as there is packaging and opportunity right now, particularly as we see mid-cycle demand to combine CDI and our prebuilt anomaly detection offering.

The combination of those 2 are naturally elongating a bit of the cycle time from bookings to revenue, but we continue to be confident around 2027 and the accretive value and the underlying thesis of the iodine acquisition.

Matthew Hawkins

Yes, we are really cross-sell motion pick up. That was another key part of our original thesis as Alpana was alluding. And so that $100 million of go-forward pipeline of opportunity, that was -- that's the behavior that we've wanted to see that we believe was possible. as we identified a tremendous cross bilateral cross-sell, Iodine solutions into Waystar clients and Waystar solutions into Iodine clients. We highlighted an example of that in our prepared remarks. So we feel good about the position of iodine. And now the way that it unites our whole platform.

Operator

Our next question comes from Elizabeth Anderson with Evercore ISI.

Elizabeth Anderson

Can you talk to us a little bit more about the margin I know you talked about some timing elements and some of the cost savings running ahead of some of the planned reinvestments. But like that seems to be consistently the case. So I guess, can you help us think about how you think about those as a jump-off point and if there's any sort of triggers that might change that in terms of investment spend?

Alpana Wegner

Yes. It's good to talk to you a little bit. And margin is definitely a place in which we want to continue to be very intentional and disciplined around how we think about the profitability profile as we continue to invest in growth. And so what I would say is our long-term targets of EBITDA margin of 40% plus are -- continue to be our target that we are investing from a position of strength today in terms of how we see the profile of business. And those investments are very intentional in terms of our priority around organic growth. So the places that we are investing right now really are in product, in AI and in innovation.

As Matt talked about, we've got several new features, functionalities and capabilities in market, and that's evidence of where we have been prioritizing the spend. I do see a continued opportunity to see efficiencies in optimizing our operating costs. And so we'll continue down that path. But right now, we see the current profile being healthy, strong and in line with our overall long-term target.

Operator

Our next question comes from Alexei Gogolev Gallo with JPMorgan.

Alexei Gogolev

SP-6 Everyone. I wanted to ask about NRR. It that 108 this quarter, what are the biggest factors keeping NRR at this level today? And what do you see as the clearest path to moving it back towards the higher end of your historical range?

Alpana Wegner

Yes. Alexei, thanks for the question. We do view the 108% this quarter as being healthy in terms of where within our range, we would want in our RTB, we shared that our longer-term range of that 108% to 110%. Underpinning that continues to be strong, GRR of 97% and -- and as I mentioned earlier in the call, we see extensive and a very significant expansion opportunity. So as I think about your question of where do we see the opportunity of getting from where we are today, 108% to something higher, we see it in particular around expansion. And as I shared earlier, that large customer cohort of ours that is over $100,000 in revenue.

To date, on average, has about 5 products per customer. When we look forward and we see the amount of backlog and bookings momentum in that cohort, we see a mix of both new business as well as expansion opportunity and would expect that to impact and influence the 108% NRR consistent with our broader growth algorithm that we've shared longer term.

Operator

Our next question comes from Brian Tanquilut with Jefferies.

Brian Tanquilut

Maybe, Matt, when you talk about the near-term road map having 20 planned AI capabilities, -- does that translate to new SKUs? Or maybe said differently, how should we think about waste capabilities contributing to revenue growth? Is that just upselling the new SKUs? Or is that allowing people to price the additional value.

Matthew Hawkins

Thanks Brian. It's both. So we have our offering and have launched a new brand new SKUs, including our recruitment product, our prebill anomaly detection solution, and we have other exciting SKUs in our, and we look forward to launching those. Those create new revenue moments for us that can be cross-sold into our installed base. It's one of the advantages of having the scale that we do is we have a massive distribution and in that we can create something new and take it new AI capability, take it to our installed base of clients. I'd add a quick comment. I it needs a place -- it needs somewhere to act. And so when we talk about Waystar's platform being the financial execution layer, as we deliver new SKUs, we can -- their AI power, we can turn them on to our -- on our platform and distribute those rapidly.

So we're excited about that. We also have a premium approach. So in addition to new SKUs, we'll take current modules of ours and supercharger with AI capability, and then we'll charge a premium for those solutions. And Altitude AI has several examples of that as well in our claims management suite and our prior authorization capability in our eligibility automation capabilities. Those are all our dial-in appeal management solution. Those would be examples of modules of ours that we supercharged with AI that we've created a premium offering for that AI-powered solution.

And so when we think about monetization overall, it is a function of new SKUs. It's a function of premium versions of software capability. And then it's also things that drive retention and a long-dated relationship with the client and allow us to price the value I'd say the last thing that I would highlight is our -- an example of a volume-oriented AI-powered solution, our anomaly detection product. That's revolution that identifies anomalies and in a cohort of 10,000 discharges. We find millions of dollars of anomalies that the AI corrects and identified and delivers to the client. That's an example of a volume-based relationship, a performance-based relationship that's focused on the outcome, and so we have that capability within the AI-powered solutions that we're delivering to market.

Operator

Our next question comes from Richard Close with Canaccord Genuity.

Richard Close

Congratulations. Just maybe to dive in deeper in terms of the anomaly you were just discussing that. But just with respect to the ADI impact that you cited for the fourth I just want to better understand exactly what is going on there. Is that a different revenue model than you previously thought about on CDI or just specifically, what has changed and maybe what the expectations were before would be helpful.

Matthew Hawkins

Sure. So Richard, we priced the CDI offering on a subscription basis. in the vast majority of the clients that we serve there. As we were uniting the business, it's been a very fast and important year for us to integrate in with Waystar. And one of our core initiatives that we were excited about was iodine have been working on a prebuild anomaly detection solution. and initially had planned to launch that last Q4 of 2025. We made a tough decision at the time, but we made the decision to pad the launch of that prebuilt solution so that we could add financial and administrative and payer-related insights to the clinical data that was comprised to drive the value in the prebuilt anomaly detection solution.

So we really strengthened that offering. And we also made the decision in learning about the market and what the market expected to instead of pricing pre-bill as a subscription, we would price it on a performance basis. So we price it based on the outcomes that it generates. -- and the solution, the found revenue dollars are found changes that could be made to improve the accuracy of a claim. And so we've made the decision to price our prebilled anomaly detection solution on that basis because we see some competing offerings in the market that are also priced on outcomes or a performance basis as well. Feel like we have a very strong product offering.

And so the thing that we highlighted in our Q4 commentary is that we're very pleased with the robust bookings that we're driving. We're pleased with the pipeline of opportunity that we have as you've heard us say. As we implement this solution, we're finding that because it is a performance-oriented revenue model, it's taking us slightly longer to actually convert that implementation to revenue. Is there anything you'd add to that Alpana? The only thing, Richard, I would add is just in terms of Q4 itself, w

Alpana Wegner

The only thing, Richard, I would add is just in terms of Q4 itself, what changed or what has shaped our view as it relates to Q4 specifically. It's really, as Matt just mentioned, the momentum we're seeing in prebuilt and extending that CDI, we, in the quarter, made a strategic go-to-market decision and executed on it based on the demand we're seeing to package those together. And so the combination of those 2 in the near term is creating a slight incremental shift in timing. But again, this is really about timing and just in the near term because we continue to see iodine on a combined basis, accretive in 2027.

Matthew Hawkins

Yes. I think it was really important for us to share with you the demand environment and the momentum that we're seeing there. So you could get the same sense as we do. And now we have a dedicated team of people focused on implementing that and ramping these solutions to revenue realization through the performance criteria.

Richard Close

If I could ask a follow-up on that. Have you tested the performance-based portion of this in terms of against any past claims that you feel extremely confident you're going to be able to achieve the performance metrics in order to recognize that revenue?

Alpana Wegner

The short answer to that, Richard, is yes. We've got some early adopters that have already begun to start transacting with us, we are seeing the outcomes in line with our initial estimates as it related to those early adopters, which is giving us further confidence on the longer-term outlook.

Matthew Hawkins

And I'll say as we expand the cohort of clients that we're bringing solution. It actually strikes the product. So we're finding more and more because of the data that we're able to use and the data science associated with it, the AI associated with it, we're finding more revenue dollars for the client and more anomalies avoided, and that bolsters the products. So yes, we have conviction that we have a strong product offering.

Operator

Our next question comes from Ryan Halsted with RBC Capital Markets.

Ryan Halsted

Maybe just sticking with this topic. Should we be assuming that most of the iodine bookings is going to be priced on this basis? And should we be thinking about the timing, the ramp time to be following in the same cadence as you're describing for the prebill anomaly detection? Or are various models being priced differently? And if so, I would love to get a little bit of more color as to your visibility in ramp time for the rest of the iodine offerings? I appreciate the clarification.

Alpana Wegner

Yes. Not a problem. So from a clarification perspective, I'd say we do have multiple models in markets as an offering. -- but the model in which Matt just articulated in terms of outcome base is the 1 that we are seeing certainly in the bookings as well as the pipeline, getting the greater traction and getting stronger momentum. So I would say that we are in a directional sense, I'd say the majority is in the outcome-based pricing model.

In terms of what gives us the confidence in and conviction around how are we going to see this translate? Like I just mentioned, we've got some early adopters that we've got some positive signals off of as well as we do continue to see the models getting smarter and continue to give us returns in terms of indicators and performance that would underpin our continued confidence in it.

Matthew Hawkins

[indiscernible] other products, utilization management and CDI are tend to be subscription type products. Prebilled anomaly action is a performance outcome-oriented product.

Operator

Our next question comes from Charles Rhyee with TD Cowen.

Charles Rhyee

If I could maybe ask the question a little bit differently, which is if we are having this outcomes-based pricing and you have signals for next year, is that fair to think that we should have maybe more outsized growth related to ID next year as the revenues are starting to get recognized for the implementation that we already have. And then secondly, is -- are we carrying costs related to deploying dilutions such that because when I look at the EBITDA guide for the rest of the year, it looks like the mid implied 4Q range is a little bit lower consensus and is down sequentially. Just curious if that is what's kind of driving that for EBITDA as well.

Alpana Wegner

Yes. Thanks, Charles. I'll tackle both of those. So on Iodine, the way that I would think about it is we've not we're not giving formal guidance on 2027. We're going to wait until our normal cadence to do that. But in terms of the contribution, we do see Iodine being accretive. And I'd say, as I just mentioned, pretty anomaly detection is where we are seeing tremendous amount of demand strength and bookings coming from, and that is on this outcome base. And so in terms of outsized, hard to say in terms of how you think about what is rightsized versus outsized.

But what I would say is we are -- we see a path and have line of sight to Iodine being accretive in 2027. As it relates to EBITDA margins, I would say we do not and look at this from a -- we're not optimizing to a particular quarter. And so what you're seeing in Q4 is the timing related to iodine. You're also seeing a bit of timing related to natural spend that comes towards the end of the year. We feel confident in the 43% EBITDA margin on a full year basis. And that's how I would think about the EBITDA margin profile.

Charles Rhyee

Great. And if I could just have 1 follow-up. You mentioned, right, some of the factors impacting revenue. One was the lapping of large fast expected mutations in '25. Does any of that carry into the first part of next year? I'm just trying to recall if some of that impacted on 26 such that we would have of comp into next year.

Alpana Wegner

Yes. As I look forward to 2027, I see much of the year-over-year comp-related challenges it had in 2026 that we've spoken to throughout the year. being behind us and look forward to sharing maybe a bit of a cleaner, simpler view and go into 2027.

Operator

Our next question comes from Jailendra Singh with Truist Securities.

Jailendra Singh

You've given us a lot of detail on the headwinds affecting the fourth quarter revenue outlook. On the flip side, what are the potential upside drivers you think could happen in Q4? I mean could faster implementation equity, like stronger transaction volumes or maybe better conversion of the existing backlog, and which of these drivers do you have the greatest visibility into today?

Matthew Hawkins

Yes, we -- we're always focused on converting the strong demand and strong bookings and continued expansion within existing clients and larger platforms that we see due to revenue. So we have dedicated teams focused on finding incremental opportunities to perform better than what we're communicating and to create upside to our plan. I just would reinforce what we've highlighted is mostly a timing and a mix issue in Q4, but we're always looking to do better than, but we want to kind of call it like we see it. We're focused on performing in and setting ourselves up for a strong 27 and a go-forward plan.

Operator

Our next question comes from Steven Valiquette with Mizuho Securities.

Steven Valiquette

5 Sorry for my raspy voice slipping out of the weather here. But just another quick question on EBITDA. Want to focus just a bit more on the EBITDA dollars as opposed to EBITDA margin. I think the last 4 years in a row, you had a sequential increase in EBITDA dollars in the calendar fourth quarter each year versus the calendar quarter. Obviously, for 2026, you're guiding for EBITDA dollars to be down sequentially. I think you just talked about the reasons why 1 of the questions a couple of minutes ago. But I guess the question is really, is that the normal seasonal pattern? Should we expect that in years going forward that for Q will go back up? And also what is the single biggest factor driving that lower sequential EBITDA among all the things you mentioned?

Alpana Wegner

Yes. Thanks for the question. I'd say a couple of things there in terms of how we're thinking about Q4 EBITDA. The answer to the question on the single largest factor, I would say, is the top line, near-term variability that we're seeing. The print to digital certainly is a lesser impact to the margin. than, for example, the iodine timing as it is a much higher margin. So I'd say the mix of product there is being reflected in the EBITDA line. And the other thing I would say is all year, we've been looking to continue to invest from an AI and product perspective. We are not necessarily optimizing for 1 quarter is how I think about it. I look at it more on a full year and on an annualized basis and being at a 43% at the midpoint of our guidance, I think, would be reflective of how we think about EBITDA margins going forward.

Operator

That concludes today's question-and-answer session. I'd like to turn the call back to Matt Hawkins for closing remarks.

Matthew Hawkins

Well, thank you all for joining us today. We're pleased with the results in Q3, a testament to a strong and robust business with a good demand environment that we're converting to commercial momentum. And we're very appreciative of our team for working so hard to take care of our clients, and we look forward to being in touch with you all, and thank you for your time today.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.