Good day and thank you for standing by. Welcome to the Waystar Investor Update Conference Call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Greg McDowell, Investor Relations. Please go ahead.
Thank you John and good afternoon everyone. It is my pleasure to welcome you to Waystar's investor conference call. Matt Hawkins, Waystar's Chief Executive Officer, and Steve Oreskovich, Waystar's Chief Financial Officer, are joining me today. After their remarks, we'll open the call to your questions. This afternoon we issued a press release announcing a definitive agreement to acquire 100% of Iodine Software and a presentation slide deck to accompany our prepared remarks.
The materials are available on the Investor Relations section of our website at Investors. Before we get started, I will remind you that this call contains forward looking statements which are predictions about future events. Examples of these statements include the 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 filed with the SEC, all of which are available on the Investor Relations page of our website. Any forward looking statements provided during this call are made only as of the date of this call. During today's call we will also discuss certain non-GAAP financial measures.
With that, I'll turn it over to Matt.
Thank you Greg and good afternoon everyone and thank you for joining us on short notice this afternoon. Thank you. Today marks an important milestone in Waystar's journey. Earlier we announced a definitive agreement to acquire Iodine Software, a proven leader in AI-powered clinical intelligence software. This transaction is a strong strategic fit and a major step forward in our mission to simplify healthcare payments through modern AI-powered software. The addition of Iodine to Waystar strengthens our platform, expands our reach, enhances the meaningful outcomes we deliver to clients, and drives financial benefits throughout our time together. Today I will reference the presentation available on Waystar's investor relations website. As shown on slide 3, Waystar's strategic rationale for acquiring Iodine is straightforward and compelling.
The acquisition of Iodine accelerates Waystar's AI-powered transformation by expanding the impact of Waystar AltitudeAI with new capabilities that target long-standing friction points in the revenue cycle. The acquisition helps eradicate unnecessary denied claims at the source by integrating clinical intelligence into the Waystar platform so providers can avoid lost revenue and secure optimal reimbursement before claims are submitted. The acquisition of Iodine increases our total addressable market by more than 15% and strengthens Waystar's position with over 1,000 hospitals and health systems served by Iodine today. It deepens shared relationships and unlocks new bi-directional cross-sell opportunities across the combined client base. The acquisition also enhances revenue growth and profitability by strengthening our high-margin subscription-based model and reinforcing our long-term growth profile. We're confident the Iodine acquisition will advance Waystar's market leadership, accelerate innovation, and deliver durable value to clients and shareholders.
On slide 4, I'd like to highlight or share several notable aspects of the transaction. Waystar's acquisition of Iodine is expected to be immediately accretive to gross margin and adjusted EBITDA following closing and accretive to revenue growth and non-GAAP net income per diluted share by 2027. The purchase price of $1.25 billion, which represents a high teens enterprise value to adjusted EBITDA multiple on a pro forma synergy adjusted basis, will be funded through approximately 50% in cash and 50% in Waystar common stock. Following the transaction, we expect Iodine shareholders will own approximately 8% of Waystar stock. Importantly, and as a clear vote of confidence in Waystar, Advent, Iodine's largest shareholder, is expected to receive 100% of its transaction consideration in the form of Waystar common stock, and we look forward to adding one new director that Advent will nominate to the Waystar Board.
We expect the transaction to close by year end 2025. Until this transaction closes, we will continue to report Waystar's financial results and provide guidance on a stand-alone basis excluding Iodine. We look forward to updating investors on Waystar's Q2 performance as well as our outlook for full year 2025 during our regularly scheduled earnings call on Wednesday, July 30th. Now on Slide 5, we illustrate how the addition of Iodine strengthens our ability to deliver ROI to our clients. The acquisition of Iodine will rapidly accelerate Waystar's impact by expanding the intelligence and reach of our AI-powered platform to deliver even greater ROI for our clients. Iodine brings an award-winning, industry-leading AI platform recognized similarly to Waystar for its deep expertise, expansive capabilities, and proven results in transforming healthcare. Iodine's proprietary clinical AI engine continuously trains on millions of patient encounters and billions of clinical data points.
Iodine's software is powered by one of the most comprehensive data sets in the industry, including data from approximately 1/3 of the hospital stays each year in the U.S. These powerful capabilities enable providers to improve clinical documentation, increase coding accuracy, and accelerate reimbursement by integrating Iodine's clinical intelligence with Waystar's enterprise-scale software platform. Trusted by more than 1 million providers across every setting of care, Waystar will accelerate its product roadmap by nearly two years and unlock new levels of automation, accuracy, and performance for providers. Waystar will eradicate unnecessary denials and ensure full, timely, and efficient payments and deliver meaningful ROI. Slide 6 highlights the differentiated value Iodine brings to Waystar through its AI-powered clinical intelligence platform. These solutions help systems capture more revenue, reduce administrative burden, and improve both clinical and financial outcomes. Iodine has three software solutions that are all powered by AI. First, Medical Necessity.
This verifies that care is properly documented and justified, leading to fewer delays, fewer denials, and faster reimbursement. Second, Documentation Accuracy. This guides clinicians in capturing complete and accurate documentation in real time, ensuring providers are paid appropriately for the care they deliver to patients, and third, Post-Discharge Revenue Protection after a patient is discharged from a hospital. This solution identifies billing risks and revenue leakage, helping hospitals recover dollars that would otherwise be lost. Iodine enables hospitals to get paid faster and more accurately while reducing the manual work required. That's why many of the nation's leading health systems rely on Iodine and why it's such a strong strategic fit for Waystar. As shown on slide 7, the acquisition of Iodine is a force multiplier, amplifying Waystar's strategic advantages and accelerating Waystar's innovation engine.
Waystar will unlock faster go-to-market execution, a larger addressable market, and deeper value across all provider segments and care settings. With the acquisition of Iodine, both organizations bring a shared reputation for client success, a deep market presence, and award-winning software, positioning us to lead with an even greater impact. This alignment in strategy and culture strengthens Waystar's competitive edge and advances our mission to simplify healthcare payments. On slide 8, I'd like to emphasize Waystar's proven track record of successful integrations and synergy realization. As we've shared publicly, M&A is one of Waystar's five strategic growth pillars, and Waystar has a strong track record of execution. Waystar has successfully completed and integrated nine acquisitions, and we have exceeded more than 100% of our identified synergies as we have successfully united these acquisitions to Waystar.
This repeatable, intentional approach gives Waystar high conviction in the ability to unite Iodine with precision and speed while creating long-term value for clients, team members, and shareholders. Our proven playbook prioritizes key team member engagement, client continuity and delight, platform unification, and ambitious product innovation, and we approach all of this while working to reduce risk and maximize impact. We're confident this integration will deliver exceptional outcomes. Now onto slide 9. Waystar expects meaningful benefits to our financial profile from the acquisition of Iodine. As you know, Waystar has built a durable and predictable growth model anchored by strong recurring revenue with double-digit revenue growth every quarter since going public. We've also delivered strong adjusted EBITDA margin performance while consistently delevering our balance sheet. Iodine brings a similarly strong financial profile with all revenue from a subscription-based model, high gross margins, and similar adjusted EBITDA margins.
As Waystar, Iodine also adds a highly respected client base including many of the nation's leading hospitals and health systems. Our combined go-to-market team is well positioned to capitalize on bidirectional cross-sell opportunities, expanding Waystar's reach into Iodine's client base, introducing Iodine's platform to Waystar's clients, and unlocking greater value where we already intersect. In addition to these top-line growth opportunities, we expect cost synergies of more than $15 million over the first 18 - 24 months following transaction close. We will update you on our progress toward integration and synergy attainment on future earnings calls post-transaction close. Please note that Waystar expects the acquisition of Iodine to be immediately accretive to gross margin and adjusted EBITDA margin, and accretive to revenue growth and non-GAAP net income per diluted share in 2027. Waystar will continue to prioritize maintaining a strong balance sheet.
We project our adjusted net leverage ratio to be approximately 3.5x following the transaction. As you know, Waystar has demonstrated our ability to delever quickly through strong free cash flow and adjusted EBITDA growth, and we expect to do so post-close. On slide 10, I'm pleased to preannounce Waystar's Q2 revenue to highlight our continued progress and momentum. To be clear, this is on a standalone basis. Waystar's Q2 revenue is approximately $271 million in the quarter, representing a 15% year-over-year increase. We look forward to sharing full Q2 results and commentary as well as our outlook on full year 2025 during our Q2 earnings call on Wednesday, July 30th. In closing, Waystar is thrilled to welcome Iodine. This acquisition strengthens Waystar's position as an AI-powered healthcare software platform driven by growth, innovation, and meaningful impact.
What excites us most is how this acquisition will help us accelerate our ability to achieve our mission to simplify healthcare payments by eradicating denied claims, automating manual work, and increasing transparency for providers and patients. This is a powerful step forward in advancing even better outcomes for our provider clients, patients, and shareholders. Operator, with that, we would be pleased to open the line for questions.
Thank you, ladies and gentlemen. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one. Again, we would like to kindly ask everyone to stick to one question only so we can take as many questions as possible.
We will pause for a moment to compile the Q&A roster. Thank you. Your first question comes from the line of Adam Hotchkiss with Goldman Sachs. Please go ahead.
Great, thanks so much for taking the questions. I'll keep it to one. Just would love any color on the overlap between the Iodine customer base and the Waystar customer base and how much of a consideration analysis of Iodine's customer base was when making the acquisition. Thanks so much.
Thanks, Adam. Thank you for the question about overlapping client bases. We're very impressed with the Iodine business. We've known the business and the leadership team for many years and have admiration for their impressive client list.
We won't comment too specifically prior to closing, but what we will say is, as we highlighted on the call, we believe that there are strong cross-sell opportunities in the scenario where it's a Waystar client. We have the chance to introduce Iodine's compelling software to that client. We know that the mid part of the revenue cycle, so to speak, that area between the patient encounter and ultimately on the other side where a claim gets formed and submitted, is appealing to many of the Waystar clients. We know there are cross-sell opportunities there.
We know on the other side a fair amount that we'll talk about more after we close, that there will be opportunities for us where Waystar is historically strong on the front end of the revenue cycle and on the back end of the revenue cycle for us to be able to take and cross-sell those solutions to Iodine's impressive clients. We also recognize that there's a meaningful overlap in that Venn diagram where we're just going to have the chance to dialogue and further strengthen our penetration, so to speak, in the instances where clients are using both. We do see that as being meaningful and look forward to talking more about that in the future.
Okay, great. Thanks, Matt. I'll hop back in queue.
Thanks. Adam.
Your next question comes from the line of Alan Lutz with Bank of America Securities. Please go ahead.
Good afternoon and thanks for taking the questions. Matt, how much is AI driving buying decisions for hospitals today when they're selecting a prospective vendor? And then what would you say the biggest area of differentiation is for Iodine? Thank you.
Thanks. Thanks, Alan. You know, we did a study a few months back with HS, where in that study we know that there's eagerness to adopt AI. As we talked about on previous earnings calls, I think it's something like 90% of clients want to use AI. We also note that in this survey it's clear that they want to work with a trusted partner. They worry about how do they deploy AI in a case where it might be one small, narrow solution, how does it connect everything else going on in their IT environment, so to speak.
We think that as far as what we're working on here is Waystar is a trusted partner to the clients that we serve. They trust our approach to cybersecurity. They trust our ability to deliver technology rapidly and seamlessly without disrupting their working environments or their cash flow. We know that Iodine's positioned much the same way. We work to be very thoughtful again. We've known this business, admired it for many years. We like the fact that Iodine, like Waystar, has had a decade-long history of leveraging advanced AI-powered capabilities. We believe that we're meeting the moment. We know there's providers, decision makers that are thinking about this. They would like to deploy it with the caveat that they work with a trusted partner, that it's cybersecure, that it can integrate successfully. Waystar and Iodine have both been doing that independently.
Now on a combined basis, we'll do it even more effectively.
Your next question comes from the line of Richard Close with Canaccord Genuity. Go ahead.
Yes, thanks for the questions. Congratulations, Matt, on the transaction. Just want to dive a little bit deeper into, I guess, something you said in response to the first question on customer overlap with respect to the product overlap. You mentioned there is some between Waystar and Iodine. Can you go into a little bit detail in terms of where you might have overlap and maybe like the holes that Waystar had that Iodine is filling specifically.
Sure, yeah. I mean, thanks Richard for the question, and I'd like to clarify that to make sure that we're crystal clear on the fact that we don't see there being much of any overlap today.
The analogy that I give is when you're sitting around the holiday table working on a thousand-piece puzzle and you can't find that one piece, and then all of a sudden you find it and everybody around the table goes, yes, this is a perfect fit. We kind of feel that way about this, and we think Iodine has market-leading solutions in areas such as clinical documentation, improvement, utilization management, and post-discharge revenue capture. Those are all new spaces and new opportunities for Waystar and very complementary that fit nicely into our platform, so to speak. Waystar, where we are in the mid-revenue cycle, that place where Iodine competes so well, we have revenue capture. Our charge integrity solution, for example, leverages machine learning algorithms and predictive analytics to, I guess, really automatically identify incorrect or under-coded claims as well as identify missing potential charges.
We're not in an area where Iodine is today. Said differently, Iodine's not delivering great software with AI in areas where Waystar is today. We view this as that perfect puzzle piece and a really good strategic fit.
Thanks, that's very helpful. Congrats.
Thanks Richard.
Your next question comes from the line of George Hill with Deutsche Bank. Please go ahead.
Hey, good morning Matt. Thanks for taking the question. Just one of the things I wanted to ask about was we talked a little bit about customer overlap, and I'd be interested more about how do you think about the cross-sell of Waystar's products into the Iodine footprint. I think of Iodine as having a bit more of an inpatient footprint versus Waystar's more outpatient footprint.
I'd kind of be interested to hear you talk about do you see the greater opportunity to add the Iodine functionality to the Waystar base or to bring the Waystar products to the Iodine base?
Yeah, thank you George. It's a really thoughtful point. What I'd say is Iodine's business is exclusively hospitals and health systems. They serve over 1,000 hospitals and health systems and a very impressive group of providers and clients. As you know, part of Waystar's business is ambulatory or non-hospital, and yet part of it is also hospital-focused, and it's about 30% of Waystar's revenue today. As we've highlighted in previous calls today, as you know, Waystar serves 16 of the top 20 hospitals and health systems in the U.S. That's a very important part of our business and a growing part of our business.
As we think about cross-sell opportunities, there are things we won't speak about until we close, but we do look forward to highlighting them further when we can. What we know now is that in the hospital segment that both Iodine and Waystar serve, there's meaningful and substantial opportunity. As you'll recall, this is a large addressable market for Waystar. We serve about 4% - 5% of this large addressable market. We've got a long room to run right in front of us. In Iodine solutions, there's a large addressable market there. I think we think about Iodine 's clients again being able to utilize Waystar software, plenty of cross-sell opportunities there. On the inverse of that, Waystar's clients today, us being able to introduce Iodine solutions to them, meaningful opportunity.
We'll talk at some future point about how we would potentially take some of Iodine's compelling solutions to the broader ambulatory market as well. It's clear that they're solving real pain and struggle for providers as they work to accurately document a clinical encounter and convert that into a successful claim. There's opportunity for us to unite now and drive cross-sell, but do it through product integration. That just makes sense for the hospital and health system market and perhaps longer term to the non-hospital and health system market.
I appreciate the call, thank you.
Thanks, George.
Your next question comes from the line of Elizabeth Anderson with Evercore ISI. Please go ahead.
Hi guys. Thanks so much for the question. I have two questions. One, could you talk a little bit more about the Iodine revenue model? Is it subscription-based? Is it claims-based? Is there a combination?
That would be helpful. Two, can you talk about any interaction with your current AltitudeAI offerings and if we should think about any product overlap there, and then also how do we sort of think about the integration, the timeline from a tech perspective? Sorry, that was actually three questions.
Thank you, Elizabeth. I'm going to ask Steve to speak to the revenue-related question and we appreciate your question there. We'll speak to both. Steve?
Yeah, thanks, Matt. Elizabeth, if you think about the revenue composition for Iodine, it is almost 100% subscription based. We like that because it makes it extremely sticky. As you think of that in comparison to Waystar, our revenue composition has historically been about 50% subscription and 50% volume based.
We believe the acquisition and post acquisition allows us to shift now our composition to becoming a majority of it from subscription based, which should add to the forward visibility that we have at any point in time and period.
To the second question, thank you Steve for clarifying that to the second part of your question, Elizabeth. As we think about Waystar AltitudeAI and the progress that we're seeing there, we won't speak to that on this call. We'll highlight some thoughts next week. What I'd say is focusing mostly our commentary on Iodine's impressive AI. Your second part of that was what's the timeline for integrating and uniting these capabilities? First, we do see Iodine Software harnessing the power of AI.
They're really applying the right AI at the right moment in use case, everything from similar to what Waystar is doing and now kind of focusing on with AltitudeAI. We're deploying everything as is Iodine from machine learning, data science, leveraging their impressive clinical data set. It's a fact that these large language models really benefit from large data sets. As we contemplate what Iodine's doing with its impressive data set, what we could possibly do together as we combine or unite the clinical data and information with Waystar's financial and administrative data set information, there are some wonderful things that we are contemplating around harnessing the power of large language models and doing some things with autonomous work with generative AI and also agentic AI. Those are things that Iodine's doing today.
We view them as complementary to what Waystar will do and is doing and not a lot of overlap at all, more complementary as we bring these companies together. We'll talk more about that in our future. What I would say is from a technical integration perspective, as you know, we take the high road and we're going to work to integrate and unite the technology so that we create a very consistent user experience for our clients. We take the data assembly and management and curation of that data seriously and that takes real work. Typically for us, when we've done acquisitions where we're really working to unite the technology, that's typically an 18- month exercise for us. The work that we've done to get familiar with this, we're pleased with it.
We have a sense of confidence in our ability to integrate the companies technically, culturally, and process wise in a way that will be minimally disruptive to clients, but really maximize the longer term opportunity here to create a special company.
Thank you.
Your next question comes from the line of Brian Peterson with Raymond James. Please go ahead.
Thanks gentlemen and congrats on the deal. Is there anything that you can share on the growth trajectory of the business, even if it's kind of a rough sense? I'd also love to understand what their go to market looks like, primarily direct or if there's any incremental partnership opportunities for you guys, either from a technology perspective or a consulting perspective. Thanks guys.
Yeah, certainly. Brian, this is Steve. As Matt had mentioned, Iodine's financial profile is pretty similar to Waystar's.
We just covered off that the revenue is almost entirely subscription based and probably as a helpful data point you can probably back into it from the information that's provided. Just to give a little bit more helpful data point, we probably expect Iodine's revenue for 2025 to be approximately $120 million - $125 million. If you think about it going forward and why we talk about the expansion of the growth rate in 2027, it comes back to what we had talked about earlier about the client base primarily consists of health systems and hospitals. They have similar sales cycles and lead times as Waystar does when it comes to not only the sales cycle but then the time to revenue.
We believe the cross sell efforts that we spent a lot of time talking about earlier here on the call into the respective client bases allow for expansion of our long term low double digit revenue growth target starting in 2027. Why we pegged that period of time is really based upon the sales cycle of those cross sell opportunities and then the associated time to revenue on that. Hopefully that gives you a little bit of context that you're looking for there, Brian.
Brian, let me take the second part of that question about go to market and our thoughts there. You'll recall that Waystar has a go to market engine that's very focused on each provider segment that we serve, from ambulatory and non-acute to the hospitals and health systems.
We think one of the compelling things about this acquisition is the ability to give more solutions to our go to market engine on the hospital and health system front in the near term and then longer term potentially the ambulatory front as I've highlighted. It's kind of like making sure that we're able to deliver more and more to this group and supplement that with solutions that we already offer and have to offer as we address this tremendous market opportunity. What we'd also say, our work is direct in the hospital and health system front. To your question, is it direct or indirect or through partners?
What we've learned in getting to know Iodine and admiring their work is they have an impressive go to market engine as well that's direct in nature and they have great connectivity to all the large EHRs that serve the hospital market, as does Waystar. We think there's complementary strength there and scale that we can bring to these EHRs as good partners. I think that will be very important here. The other thing I'd highlight, and it's perhaps more future out year facing, is Waystar serves over 200 active channel partners across all the different care settings and we have integration to over 500 different EHR and administrative systems in healthcare. We have a number of channel partner relationships and work to sustain those.
We think for us to meet the broader market opportunity, we want to be connected to as many EHRs and partners as we can to ensure that our solutions are used in the most successful ways. I think that there's opportunity to now, as we unite Iodine with Waystar, to leverage the partner approach as well as to harness the power that these direct go to market teams are already showcasing.
Great answer. Thanks, Matt.
Thank you.
Thanks, Brian.
Your next question comes from the line of Ryan Daniels with William Blair. Please go ahead.
Yeah, guys, thanks for taking the questions and congrats to both the teams on completing the RCM Christmas puzzle here. I guess one area I want to dive into a little bit deeper, and you hit on this already, but I think this is an important data point.
There's so much data on your platform and now you're acquiring an asset that does more than one in three inpatient discharges. I'm curious, as you think about the product roadmap post deal over the next two, three years, how much opportunity do you see to kind of shift your internal R&D budget towards AI and how much of the Iodine platform and learnings and large language models can be moved over to Waystar and vice versa. I'm just trying to get a feel for how transformative this really could be longer term to kind of amplify, as you said, the broader product portfolio. Thanks.
Thanks, Ryan. Thank you for recognizing how joyful it is to find that puzzle piece. It's special and we feel that way about this.
What I'd say is we won't cover off in detail on aspects of how we're viewing this opportunity from a product vision perspective beyond what we've said in our prepared comments. I would say again, you're thinking about it the right way. Harnessing the power of the AI-powered capabilities that Iodine has today, given their impressive data set and then combining that with Waystar's impressive data set, we believe that there is unlocked opportunity and impact ahead of us here and that was one of the big drivers in us kind of thinking about this special puzzle piece and thinking about it on a combined basis. We look forward to sharing more with you when we can when the transaction closes. It's something that we're excited about and I appreciate you highlighting it.
As a reminder, please only ask one question. Thank you.
Your next question comes from the line of Jailendra Singh with Truist Securities. Please go ahead.
Thank you. This is Jailendra Singh from Truist Securities. Congratulations on the deal. I want to dive deeper into the thought process of buy versus build on this projection. Clearly some of the capabilities you guys talked about for Iodine being around denials management, revenue capture, maximizing revenue reimbursement. You guys have talked about similar stuff as well. You might not have exact project on those lines. Just how did you go about deciding between going deeper into backend solutions via M&A versus expanding into new areas such as content patient facing solutions where Waystar doesn't have any presence. Just give us thought process on buy versus build and front end versus back end.
Sure. Thank you.
I'd say just at a kind of basic understanding level, we have a team of product managers that own various software products that exist on the Waystar software platform, and they are responsible for identifying the entirety of all the things that could be developed on this software platform and then putting it all together without going into a lot of detail. You could appreciate the fact that we meet regularly to talk about areas of innovation and investment and opportunity. Supplementing that organic product management, product development roadmap work, we also have a dedicated corporate development team that takes a very disciplined approach to looking at areas within the product roadmap. They're sitting in the room with us when we're talking about our platform, and they're looking at areas with us of potential future build or potential future acquisition opportunity.
I won't share all of our secret sauce with you, so to speak, but we do look at what is compelling, what's going to make the biggest impact for clients, for the providers that we serve. We've been talking about the middle part of the revenue cycle, that area from where the patient sees the doctor and a clinical encounter incurs to the successful submission of a claim that can get adjudicated and rapidly reimbursed. We're doing that, you'll recall, on the back end. We're submitting claims with the first pass claim acceptance rate that's approximately 99% across the million providers that we serve in the 6 billion insurance transactions that we're processing.
On the front end, we do an exceptional job at identifying the patient, clearing that patient financially, helping ensure that the patient has insurance eligibility, often detecting coverage when they don't even know if they have access to it or not. That helps the provider a lot. We've got really good software on the front and the back. What we've seen in our discussion with our advisory board members, as our product managers go to work in market and meet with clients and prospects, this middle part of the revenue cycle, so to speak, there's opportunity there. We've engaged with Iodine over several years. We've been admirers of this business, and we're in the build versus buy of things. Their technology has advanced their clinical data set, the connectivity they've developed to many hospitals as we've highlighted.
There wasn't a chance for us in the near term to build that ourselves and to deliver the impact that we expect in the time period that we expect. We said let's go to work and let's acquire, and we're just thrilled to be in this situation. The other thing that I'd highlight, and it really carries over from the question before, is as we were looking at build versus buy versus acquire, one of the things we also observed was that this clinical data that Iodine has today will refine and strengthen the AltitudeAI platform to drive even greater end-to-end efficiencies across the revenue cycle and will further strengthen Waystar's current products. Think about the front-end patient access, such as prior authorizations, that has a clinical element to it that will be strengthened by Iodine.
We could not have built that ourselves in the near term and got the same type of impact that we believe we'll get successfully in this acquisition. I'd also highlight the denial and appeal management suite. Sometimes there's clinical information that is used in the appeal process. This accelerates our effort to bolster that product even further and to strengthen the results for the provider clients that we serve and the patients that they meet with. We're pleased with this opportunity and thrilled about the acquisition and the announcement today.
Great, thanks a lot.
Your next question comes from the line of Charles Rhyee, TD Cowen, please go ahead.
Yeah, thanks for taking the question. If I heard correctly earlier, I think you guys mentioned that with the acquisition and the cross-sell opportunity, we should see sort of an acceleration of revenue growth in 2027.
In particular, does this, does Iodine fundamentally change then the growth algorithm? If we think about how you've kind of talked about in the past of, you know, from sort of net retention + cross-sell + new logos, et cetera, does that cross-sell piece of the algorithm, is that now sort of permanently increased and something that you haven't talked about perhaps is, you know, what percent of the Iodine customer base are or perhaps clearinghouse customers of Waystar, is that also an opportunity? Thanks.
Yeah, thanks, Charles. Again, what I'd say is there's more work for us to do before we provide any thoughts on any future period. It's probably prudent for us to wait until we get this transaction closed before we start to highlight what we believe is opportunity in 2026 and 2027 beyond what we've commented.
We do believe this will be accretive to revenue in 2027, but we'll work to further clarify that and to talk about the metrics that we would expect to contribute to that once we close this transaction. Again, to your second question about are there Iodine clients who are Waystar clients, for example, in the clearinghouse area? The answer is yes. We are not disclosing how much at this point. If you'll let us continue to do our work between now, announcement, and close, we'll work to be thoughtful in how we describe the cross-sell benefit and the opportunities we see in front of us at some future point.
Great. Thanks and congrats.
Thanks so much, Charles. Appreciate it.
Your next question comes from the line of Daniel Crosslight with Citi. Please go ahead.
Hi guys. Thanks for taking the question and congrats on the acquisition.
I was wondering if you can provide a bit more detail on where the $15 million of cost synergies will come from and what the cadence could potentially look like over the next couple of years. Secondly, Iodine's CEO is going to be a significant shareholder here. I'm curious if he's also going to assume an operational role at the company. Thanks.
Thank you. We appreciate the curiosity on the synergy number, the $15 million synergy number and the time horizon and over what period we expect to realize that. The second question about the Iodine CEO, I'll reserve any comments on him. We're sure impressed with him and the business that he has built and the team, but you can appreciate we're talking about different things and we'll hold any commentary on that for now.
What I'd say is in addressing the $15 million of synergy opportunity, I think the most helpful thing we can reinforce is that as we have purpose-built Waystar into a market-leading healthcare software business over nine acquisitions where each one of those has had a synergy target, we are more than 100% on an attainment basis in synergies realized and so it's certainly embedded into our playbook. As I highlighted on the prepared remarks portion of things, this is something that we have dedicated team members at Waystar focus on and they have a lot of experience and we look forward to updating our progress as we go forward. You can anticipate that on future earnings calls once this closes that we'll talk about synergy attainment and progress on the integration and unification of these of Iodine to Waystar. We'll reserve any further comment on that for right now.
Appreciate the curiosity.
Thank you.
Your next question comes from the line of Steven Valiquette with Mizuho Securities. Please go ahead.
Thanks. Let me offer my congrats on the transaction as well. I guess my question is really just understanding that the KLAS rankings are really not the be all end all within healthcare IT. Iodine has consistently ranked pretty high on the KLAS rankings for CDI. They used to be number one a few years ago, but they don't seem to show up in any other categories outside of CDI, at least for now. I guess can you just confirm whether or not CDI is really the core offering within Iodine? You sort of touched on this.
As far as for ways to start trying to round out your RCM platform approach, how critical is CDI within some of the places where you're trying to build out that platform versus other areas that you still may be looking to fill out as well. Thanks.
Yeah, thanks Steven. We try to measure client satisfaction and delight in a number of areas. I know Iodine does the same. We both use Net Promoter Scores and there's all sorts of impressive metrics within Iodine that at some future point once closed we may choose to highlight on the Waystar side, Net Promoter Scores, successful on time on budget implementations, for example, the ways that we delight our clients, being a great place to work for our team members, the most trusted company type score that we were just so thrilled to earn those honors.
Iodine's earning similar honors, and they're certainly well ranked in KLAS and have been best in class, and we're grateful for that. Culturally, you can tell in meeting with this team, they care a lot about working to delight their clients and delivering modern software that harnesses the power of AI to deliver real impact. We feel that in our dialogue, in this process of getting to know them and reaching this point. I'd say on the first point of things, we feel really good about the alignment there and the conviction that we have that we can continue to delight clients and serve them effectively. When you look at their solutions, I'll reserve a lot of commentary around clinical documentation improvement. We know that's a very important part of the middle part of the revenue cycle, and we admire Iodine's position there.
We believe that there will be some things for us to work on together that will strengthen ability to get to an accurate code set that will inform a claim, will strengthen the ability to leverage, as we highlighted in our prepared remarks, utilization management capabilities. We also highlighted one other area that I think is a newer capability for Iodine. We talked about Medical Necessity that really speaks to care being properly documented and justified. That leads to fewer delays, fewer denials, and faster reimbursement. We highlighted a newer capability around Post-Discharge Revenue Protection. After a patient is discharged from a hospital, Iodine's introducing a new solution that identifies billing risk and revenue leakage. We think there's a lot of opportunity there to help hospitals recover dollars that would have otherwise been lost.
All in, we're excited about the capability set, the way that Iodine's thinking about the product roadmap, and how nicely it complements what we're doing at Waystar and the opportunity to unite them together.
All right, that's great. Thanks.
Thanks, Steven. As there are no further questions at this time, that concludes the question and answer session. I would like to turn the call back over to Mr. Matthew Hawkins for closing remarks.
Thank you so much for joining on short notice, everybody. As you can sense, we're thrilled about this opportunity and we're confident in what lies ahead. We've taken a very disciplined approach here to get to know this business and this area within the revenue cycle for a long time. The acquisition of Iodine marks a significant step forward for Waystar, our first public company acquisition as a public company.
We believe it will strengthen our ability to deliver exceptional results. We're focused, as you can tell, on driving meaningful impact for clients, creating new opportunities for team members across Waystar and Iodine, and ultimately generating long-term value for our shareholders. Thank you for being with us today. We look forward to our earnings call on July 30th. We're grateful to preannounce revenue today and you can sense the momentum that we're building in the business. We look forward to giving you a more fulsome update on Q2 as we normally do, and also to provide our thoughts on outlook for full year 2025 next week. Thanks so much. Hope you guys all have a great night.
Ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may now disconnect. Have a blessed day everyone.