Waystar Holding (WAY) risk factors, FY2024 10-K

Risks Related to our Business and our Industry

1. 01We operate in a highly competitive industry
2. 02We must retain our existing clients and attract new clients
3. 03We must be able to successfully execute on our business strategies in order to grow
4. 04We have historically acquired, and in the future may acquire, businesses, technologies, product lines, and other assets. The successful integration of any businesses and assets we have acquired or may acquire may be critical to our business and growth strategy
5. 05Our business depends on our ability to establish and maintain strategic relationships
6. 06Our revenues rely, in part, on the growth and success of our clients and overall healthcare transaction volumes, which are subject to factors outside of our control
7. 07Consolidation in the healthcare industry could adversely impact our business, financial condition, and operating results
8. 08We face a selling cycle of variable length to secure new client agreements
9. 09We face an implementation cycle that is dependent on our clients’ timing and resources
10. 10We depend on our senior management team and certain key employees and must continue to attract and retain highly skilled employees
11. 11The estimates and assumptions we use to determine the size of our total addressable market may prove to be inaccurate

Risks Related to our Products and Solutions

1. 12We may not be able to develop and market new solutions, or enhance our existing solutions, to respond to technological changes or evolving industry standards
2. 13Our business depends on the interoperability, connectivity, and integration of our solutions with our clients’ and their vendors’ networks and infrastructures
3. 14The successful operation of our business depends upon the performance and reliability of internet, mobile, and other infrastructure, none of which are under our control
4. 15Our business would be adversely affected if we cannot obtain, process, use, disclose, or distribute the highly regulated data we require to provide our solutions
5. 16We rely on certain third-party vendors and providers
6. 17Any errors or malfunctions in our products and solutions could result in liability to our clients
7. 18Failure by our clients to obtain proper permissions or provide us with accurate and appropriate information may result in claims against us or may limit or prevent our use of information
8. 19Certain of our solutions present the potential for embezzlement, identity theft, or other similar illegal behavior by our employees or vendors and a failure of our employees or vendors to observe quality standards or adhere to environmental, social, and governance standards could damage our reputation
9. 20We must comply with the applicable rules of the National Automated Clearing House Association (“NACHA”), and we, our clients, and our sales partners must comply with the applicable requirements of card networks
10. 21We are subject to increases in card network fees and other changes to fee arrangements
11. 22We are subject to the effect of payer and provider conduct which we cannot control

Risks Related to Information Technology Systems, Cybersecurity, Data Privacy, and Intellectual Property

1. 23We and our vendors are subject to attacks of such information technology systems, including cyber-attacks, security breaches, or other incidents impacting the information Processed through our platform
2. 24Our business is subject to complex and evolving laws and regulations regarding privacy, data protection, and cybersecurity
3. 25If our intellectual property rights are not adequately protected and enforced, we may not be able to build name recognition or protect our technology and products
4. 26Our business depends on our ability to use or license data and integrate third-party technologies
5. 27We also integrate into our proprietary products and solutions and use third-party software to maintain and enhance, among other things, content generation and delivery, and to support our technology infrastructure
6. 28Our use of “open source” software could adversely affect our ability to offer our products and solutions and subject us to possible litigation
7. 29Third parties may initiate legal proceedings alleging that we are infringing or otherwise violating their intellectual property rights
8. 30We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties

Risks Related to Legal and Governmental Regulation

1. 31We conduct business in a heavily regulated industry
2. 32sale of these technologies, or their use by us or by our clients or partners, may also subject us to additional risks, including reputational harm, competitive harm, or legal liabilities
3. 33The healthcare regulatory and political framework is uncertain and evolving
4. 34We are subject to health care laws and data privacy and security laws and regulations governing our Processing of personal information, including PHI, personal health records, and payment card data
5. 35We may be a party to legal, regulatory, and other proceedings that could result in adverse outcomes
6. 36We are contractually required to comply with Bank Secrecy Act and Anti-Money Laundering (“BSA/AML”) laws and regulations as a payment facilitator in certain instances
7. 37Existing laws regulate our ability to engage in certain marketing activities
8. 38We must comply fully with website accessibility standards
9. 39We could be subject to changes in our tax rates, the adoption of new tax legislation or exposure to additional tax liabilities
10. 40Our ability to use our net operating losses (“NOLs”) to offset future taxable income may be subject to certain limitations
11. 41Goodwill and other intangible assets, net represent approximately 89% of our total assets as of December 31, 2024 and we could suffer losses due to asset impairment charges

Risks Related to our Indebtedness

1. 42We have a substantial amount of debt, which could adversely affect our financial position and our ability to raise additional capital and prevent us from fulfilling our obligations under our obligations
2. 43Restrictive covenants in the agreements governing our Credit Facilities may restrict our ability to pursue our business strategies
3. 44As a result of these covenants and restrictions, we are and will be limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities
4. 45Interest rate fluctuations may affect our results of operations and financial condition
5. 46We intend to continue to make significant investments to support our business growth, respond to business challenges or opportunities, develop new products and solutions, enhance our existing products and solutions, enhance our operating infrastructure, and potentially acquire complementary businesses and technologies
6. 47Our business is significantly impacted by general macroeconomic conditions
7. 48We have a history of losses and we may not achieve or maintain profitability in the future

Risks Related to Ownership of our Common Stock

1. 49The Institutional Investors hold a significant percentage of our outstanding common stock and their interests may be different than the interests of other holders of our securities
2. 50We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors
3. 51We have incurred significant increased costs and become subject to additional regulations and requirements as a result of becoming a public company, and our management is required to devote substantial time to compliance matters
4. 52Failure to comply with requirements to design, implement, and maintain effective internal controls could have a material adverse effect on our business and stock price
5. 53The market price of our common stock has been volatile and may continue to fluctuate substantially, which could result in substantial losses for purchasers of our common stock
6. 54Future issuances of our common stock may dilute the percentage ownership of existing owners, which could reduce their influence over matters on which stockholders vote
7. 55Because we have no current plans to pay cash dividends on our common stock, stockholders may not receive any return on investment unless they sell their shares of common stock for a price greater than that which they paid for it
8. 56Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price for our common stock to decline
9. 57If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline
10. 58Anti-takeover provisions in our organizational documents could delay or prevent a change of control
11. 59Our board of directors is authorized to issue and designate shares of our preferred stock in additional series without stockholder approval