Fitch Upgrades Waystar's Credit Rating to 'BB+' on Lower Leverage Outlook

Fitch Ratings upgraded Waystar Holding Corp.'s (NYSE:WAY) credit rating on Tuesday, reflecting the agency's expectation of significantly lower debt levels for the healthcare payments technology company. The Long-Term Issuer Default Rating for Waystar and its subsidiary, Waystar Technologies, Inc., was raised to 'BB+' from 'BB', with a Stable outlook.

Details of the Upgrade

The ratings agency's decision was primarily driven by a forecast that Waystar's Fitch-adjusted EBITDA leverage will decline to below 3.0x in fiscal 2026. This projection surpasses Fitch's previous positive sensitivity threshold for the company. The report noted that leverage has already decreased, hitting 3.3x for fiscal 2025 and 3.1x for the last twelve months ending in the first quarter of 2026.

In a related move, Fitch also upgraded Waystar's first lien term loan to 'BBB-' from 'BB+', assigning it a Recovery Rating of 'RR2'. The Stable outlook indicates that Fitch views the new rating as sustainable over the medium term.

Strong Financial Metrics

Fitch highlighted Waystar's robust operating profile as a key factor supporting the upgrade. The company's financial strength is underpinned by a highly predictable business model and strong profitability.

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Key metrics cited by Fitch include:

• Recurring Revenue: Approximately 99% of Waystar's revenue is from recurring sources like subscriptions.
• Customer Retention: The company boasts a gross retention rate exceeding 95% and a net retention rate above 110%.
• Profitability: EBITDA margins are in the low 40s, placing Waystar at the high end of its healthcare IT peer group range of 28%-47%.
• Cash Flow: Strong margins and low capital needs have improved free cash flow (FCF) margins to around 25% as of fiscal 2025.

Market Position and Context

Waystar operates a large-scale platform within the U.S. healthcare system, processing over 7.5 billion insurance transactions and managing more than $2.4 trillion in gross claims annually. According to Fitch, this scale effectively serves about 60% of the U.S. population.

Fitch anticipates that Waystar will continue to benefit from positive industry trends, including increased healthcare spending due to an aging population, higher service utilization, and rising drug costs. For investors, the rating upgrade signals increased confidence in Waystar's ability to manage its debt and generate consistent cash flow.