Financial Data and Key Metrics Changes - Revenue for Q2 was $50.6 million, representing 21.4% year-over-year growth compared to 19.2% growth last quarter, and $1.4 million above the high end of the range provided in May [4][14] - Gross margin reached 71.9%, a 400 basis point increase year-over-year, marking the 10th consecutive quarter of gross margin improvement [4][16] - Adjusted EBITDA was positive for the first time in the company's history, landing just above breakeven at $5,000, a $3 million improvement year-over-year [20] Business Line Data and Key Metrics Changes - Revenue growth was driven by new customer additions, particularly in the specialty medical vertical, and increases in average revenue per location [15] - The average revenue per customer has steadily increased over the past three years due to successful sales of higher-priced bundles [15] - The net revenue retention rate improved to 97% in Q2, up from 96% last quarter, indicating effective upselling and price adjustments [16] Market Data and Key Metrics Changes - The total addressable market in the U.S. exceeds $7 billion, with specialty medical being the fastest-growing vertical [6] - The company welcomed 20 new integrations year-to-date, opening up the addressable market by more than 86,000 locations [9] - The company continues to see strong performance in lead generation across its four core verticals, with dental being the largest source of new customers [32] Company Strategy and Development Direction - The company aims to enhance healthcare experiences through a comprehensive customer experience software and payments platform tailored to small and medium-sized healthcare practices [5] - The introduction of Weave Enterprise is designed to help multi-location practices standardize operations and streamline revenue cycle management [12] - The company is investing in AI-driven solutions to improve operational efficiency and patient engagement [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's execution and the stability of its customer base, which is less affected by macroeconomic trends [49] - The company raised its full-year revenue outlook to a range of $201 million to $203 million, reflecting strong performance and demand for its platform [21] - Management highlighted the importance of partnerships, particularly with Patterson Dental, to drive growth and expand market reach [40] Other Important Information - The company continues to develop innovative solutions, including AI-driven assistance and enhanced marketing tools, to improve customer experience and drive long-term loyalty [8][12] - The company has been recognized for its commitment to customer experience and workplace culture, ranking first in multiple categories by G2 and being honored on Inc.'s Annual Best Workplaces list [13] Q&A Session Summary Question: What pockets of specialty medical are seeing the most traction? - Management noted traction in physical therapy, med spa, plastics, and general practice, with a go-to-market strategy focused on brand marketing and generating inbound leads [22] Question: Is there a timeline for the rollout of the new platform? - The new Weave experience is currently being demoed, with features designed to enhance usability for multi-location practices [23][24] Question: What is the size of the installed base not on integrated bundles? - Approximately 10% of customers are on non-integrated products, with upsell opportunities available as integrations are completed [28][29] Question: What drove the strength in subscription and payment revenue? - The increase was attributed to new customer acquisition, price adjustments, and growth in payments [35][36] Question: Can you provide insights on the Patterson Dental relationship? - The partnership allows for collaborative selling into approximately 100,000 locations, with early traction and leads already being generated [40] Question: What changes have occurred in sales leadership? - Management indicated that changes have been incremental, focusing on improving the middle market business and enhancing sales strategies [42][44] Question: How is the company addressing customer retention? - The company continues to see returning customers, with many coming back after trying competitors due to the superior functionality of Weave's solutions [45] Question: What gives the company better visibility into the second half? - Strong sales performance and the stability of the customer base provide confidence in the outlook, despite macroeconomic challenges [48][49] Question: How is the Call Intelligence product performing? - Call Intelligence is still in early stages but shows promise in helping customers understand call patterns and improve revenue capture [50][51] Question: Did any other verticals reaccelerate during the quarter? - Revenue reacceleration was observed across all verticals, with specialty medical being the fastest [53]

Company Overview - Weave Communications is part of the Zacks Communication - Network Software industry, which includes Ribbon Communications (RBBN) [1] - RBBN closed the last trading session at $3.84, reflecting a 3.5% increase, and has returned 25.3% over the past month [1] Financial Performance - Weave Communications is expected to report a quarterly loss of $0.02 per share, indicating a year-over-year change of +60% [2] - Revenues for Weave are projected to be $48.84 million, representing a 17.2% increase from the same quarter last year [2] - Weave's shares increased by 7.4% in the last trading session, closing at $9.69, with notable trading volume [3] Market Trends - The stock's price movements are correlated with trends in earnings estimate revisions, which are crucial for evaluating potential stock strength [4] - The consensus EPS estimate for Weave has remained unchanged over the last 30 days, suggesting that price increases may not be sustainable without earnings estimate revisions [6] Competitive Position - Weave is benefiting from increased adoption of its solutions across various markets, including dental, optometry, veterinary, and specialty medical, which is enhancing its average revenue per user [5] - Ribbon Communications has a consensus EPS estimate of $0.04 for the upcoming report, unchanged from the previous year, and also holds a Zacks Rank of 3 (Hold) [7]

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2024, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with accompanying notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, the company reported total assets of **$190.2 million**, a decrease from **$201.0 million** at year-end 2023, with total liabilities at **$116.7 million** and stockholders' equity at **$73.4 million**, alongside a significant decrease in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $30,609 | $50,756 | | Total current assets | $119,722 | $129,778 | | TOTAL ASSETS | $190,174 | $201,012 | | **Liabilities & Equity** | | | | Total current liabilities | $68,360 | $72,853 | | Total liabilities | $116,738 | $122,055 | | Total stockholders' equity | $73,436 | $78,957 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $190,174 | $201,012 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2024, Weave generated **$47.2 million** in revenue, a **19.2% increase** year-over-year, and reported a net loss of **$7.2 million**, an improvement from the prior year Condensed Consolidated Statements of Operations Highlights (in thousands) | Account | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenue | $47,173 | $39,565 | | Gross profit | $32,987 | $26,534 | | Loss from operations | $(8,155) | $(8,518) | | Net loss | $(7,203) | $(7,859) | | Net loss per share - basic and diluted | $(0.10) | $(0.12) | [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Total comprehensive loss for Q1 2024 was **$7.5 million**, compared to **$7.9 million** in Q1 2023, primarily driven by net loss and other comprehensive losses from foreign currency translation and unrealized investment losses Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Account | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net loss | $(7,203) | $(7,859) | | Other comprehensive loss | $(300) | $(16) | | **Total comprehensive loss** | **$(7,503)** | **$(7,875)** | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased from **$79.0 million** at year-end 2023 to **$73.4 million** as of March 31, 2024, primarily due to net loss and equity award settlements, partially offset by stock-based compensation - Total stockholders' equity decreased from **$78,957 thousand** at December 31, 2023, to **$73,436 thousand** at March 31, 2024[22](index=22&type=chunk) - The main drivers of the change were the net loss of **$7.2 million** and **$6.1 million** for common stock withheld for taxes, offset by **$6.8 million** in stock-based compensation[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$19.7 million** in Q1 2024, a significant negative shift from the prior year, primarily due to increased accounts receivable and decreased accrued liabilities, while investing activities provided **$6.1 million** and financing activities used **$6.6 million** Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(19,701) | $1,541 | | Net cash provided by (used in) investing activities | $6,131 | $(5,439) | | Net cash used in financing activities | $(6,577) | $(2,018) | | **Net decrease in cash and cash equivalents** | **$(20,147)** | **$(5,916)** | [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial statement components, including revenue disaggregation, the **$50.0 million** undrawn revolving line of credit, and **$6.8 million** in stock-based compensation expense for the quarter Disaggregation of Revenue (in thousands) | Revenue Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Subscription and payment processing | $45,092 | $37,692 | | Onboarding | $960 | $784 | | Hardware (embedded lease) | $1,121 | $1,089 | | **Total revenue** | **$47,173** | **$39,565** | - The company has a revolving line of credit with Silicon Valley Bank allowing for total borrowing capacity up to **$50.0 million**, with zero outstanding balance as of March 31, 2024[84](index=84&type=chunk)[85](index=85&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Cost of revenue | $239 | $213 | | Sales and marketing | $1,151 | $964 | | Research and development | $1,898 | $930 | | General and administrative | $3,484 | $2,406 | | **Total** | **$6,772** | **$4,513** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **19% year-over-year revenue growth** primarily to new customer acquisition, with gross margin improving to **70%**, while reporting a negative free cash flow of **$(20.5) million** and an improved Adjusted EBITDA loss of **$(0.4) million** - Revenue increased by **$7.6 million (19%)** year-over-year, with **87%** of the increase from new customers and **13%** from existing customers[147](index=147&type=chunk) - Gross margin improved from **67% to 70%** year-over-year, driven by reduced third-party costs, fully depreciated phone hardware for more customers, and operational efficiencies[148](index=148&type=chunk)[149](index=149&type=chunk) Key Business Metrics | Metric | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Dollar-based net retention rate | 96% | 97% | | Dollar-based gross retention rate | 92% | 93% | Non-GAAP Financial Measures (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Free cash flow | $(20,519) | $587 | | Adjusted EBITDA | $(358) | $(3,114) | - Free cash flow was negatively impacted by approximately **$15.0 million** due to a new billing system implementation deferring March billings, and by approximately **$7.0 million** due to the timing of annual bonus payouts[158](index=158&type=chunk)[159](index=159&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to market risk has not materially changed since December 31, 2023, with detailed information available in its Annual Report on Form 10-K regarding interest rate and foreign currency risks - As of March 31, 2024, the company's exposure to market risk has not changed materially since December 31, 2023[186](index=186&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting identified during the quarter - Management, including the CEO and CFO, concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective[187](index=187&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[189](index=189&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business, financial condition, or cash flows, though future litigation, particularly intellectual property, remains a possibility - The company is not presently a party to any legal proceedings that would be expected to have a material adverse effect on its business, results of operations, financial condition, or cash flows[192](index=192&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section details numerous risks, including the company's history of losses, dependence on SMB customers, intense market competition, reliance on third-party providers, potential security breaches, and evolving regulatory compliance challenges - The company has a history of net losses, including **$7.2 million** for Q1 2024, and may not achieve or sustain profitability in the future[211](index=211&type=chunk) - The business is highly dependent on attracting and retaining SMB customers, who are more susceptible to economic downturns and have higher failure rates[201](index=201&type=chunk)[208](index=208&type=chunk) - The company faces significant competition from a fragmented market of point solutions and larger platform providers[233](index=233&type=chunk) - There is substantial reliance on single-source or key third-party providers, including Stripe for Weave Payments and Google Cloud Platform (GCP) for cloud infrastructure, and any disruption could adversely affect business[257](index=257&type=chunk)[266](index=266&type=chunk) - The business is subject to stringent and changing regulations, including HIPAA, TCPA, and various data privacy laws (e.g., CCPA/CPRA), and non-compliance could result in significant liability and reputational harm[322](index=322&type=chunk)[334](index=334&type=chunk)[342](index=342&type=chunk) [Other Information](index=89&type=section&id=Item%205.%20Other%20Information) This section discloses that on March 6, 2024, Branden Neish, Chief Product and Technology Officer, adopted a Rule 10b5-1 trading plan for the potential sale of up to **100,000 shares** - On March 6, 2024, Branden Neish, Chief Product and Technology Officer, adopted a Rule 10b5-1 trading plan for the sale of up to **100,000 shares**[402](index=402&type=chunk) [Exhibits](index=90&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the amended loan and security agreement, CEO/CFO certifications, and financial statements formatted in Inline XBRL - The exhibits filed with the report include the amended loan and security agreement, CEO/CFO certifications (Rule 13a-14(a) and Section 1350), and financial statements in Inline XBRL format[404](index=404&type=chunk)

NYSE: WEAV Weave Overview Q1 2024 Safe Harbor Statement This presentation has been prepared by Weave Communications, Inc. ("Weave", "we", "us", or "our") for informational purposes only and not for any other purpose. This presentation contains "forward-looking statements" within the Private Securities Litigation Reform Act of 1995 that are based on our management's current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of ope ...

Weave Communications, Inc. (NYSE:WEAV) Q1 2024 Earnings Conference Call May 1, 2024 4:30 PM ET Company Participants Mark McReynolds - Head, Investor Relations Brett White - Chief Executive Officer Alan Taylor - Chief Financial Officer Conference Call Participants Jacob Staffel - Goldman Sachs Hannah Rudoff - Piper Sandler Alex Sklar - Raymond James Parker Lane - Stifel Mark Schappel - Loop Capital Markets Tyler Radke - Citi Operator Greetings and welcome to the Weave First Quarter 2024 Financial Results Con ...

Weave Announces First Quarter 2024 Financial Results LEHI, Utah—May 1, 2024 – Weave (NYSE: WEAV), a leading all-in-one customer experience and payments software platform for small and medium-sized healthcare businesses, today announced its financial results for the first quarter ended March 31, 2024. "Weave delivered another terrific quarter, providing a strong start to the year with solid top-line performance and significant improvements in gross and operating margin and adjusted EBITDA. Achieving greater ...

Part I [Business Overview](index=8&type=section&id=Item%201.%20Business) Weave Communications, Inc. is a leading all-in-one customer experience and payment software platform provider for small and medium-sized healthcare businesses, enhancing patient experience and optimizing operations through unified communications, online scheduling, payments, and review management. - Weave's mission is to enhance patient experience and improve business operations through a unified platform, enabling healthcare professionals to focus on patient care[23](index=23&type=chunk) - The company offers an all-in-one customer experience and payment software platform integrating phone, messaging, email marketing, insurance verification, online scheduling, reviews, payments, and digital forms[25](index=25&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) Customer Count (as of December 31, 2023) | Metric | Quantity | | :--- | :--- | | Subscription Locations | >31,000 | | Customer Count | >28,000 | | Primary Industries | Dental, Optometry, Veterinary, and other Medical Specialty Services | - The company attracts new customers through a combined strategy of direct sales teams, omnichannel marketing, and business development partnerships[47](index=47&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - Technologically, the company utilizes a microservices architecture and a highly containerized environment, leveraging Google Cloud Platform (GCP) for cloud-native services to ensure scalability and voice quality[54](index=54&type=chunk)[55](index=55&type=chunk) - The company operates in a highly competitive and fragmented market, primarily competing with combinations of existing single solutions, with competition factors including platform breadth, integrated solutions, ease of use, industry-specific features, and deep integrations[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - The company is subject to various regulations, including FCC regulations for VoIP services, consumer protection laws like TCPA and CAN-SPAM, and data protection laws such as HIPAA and CPRA[70](index=70&type=chunk)[72](index=72&type=chunk)[74](index=74&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks associated with investing in the company's common stock, covering business operations, industry competition, government regulation, intellectual property, taxation, accounting, and common stock ownership. - Company revenue was **$170.5 million** in 2023, **$142.1 million** in 2022, and **$115.9 million** in 2021, but rapid growth does not guarantee future growth and may make assessing future prospects difficult[83](index=83&type=chunk) - The company faces challenges in attracting new customers, retaining existing ones, and increasing platform usage by customers, which are crucial for its future revenue[86](index=86&type=chunk) - The company has incurred losses since its inception, with net losses of **$31 million** in 2023 and **$49.7 million** in 2022, and may not achieve or maintain profitability in the future[96](index=96&type=chunk) - Adverse economic conditions and macroeconomic uncertainties may negatively impact the company's business, operating results, and financial performance, particularly affecting small and medium-sized businesses that constitute its primary customer base[99](index=99&type=chunk)[100](index=100&type=chunk) - The company heavily relies on Google Cloud Platform (GCP) for its platform operations, and any interruptions or disruptions could adversely affect its business, operating results, and financial condition[149](index=149&type=chunk) - The company's products and services must comply with industry standards, FCC regulations, and state, local, national, and international regulations; changes in regulations may require service modifications, increase costs or prices, and harm the business[193](index=193&type=chunk) - The company handles commercial and personal information of customers and employees, subject to HIPAA and other strict and evolving federal, state, and foreign data protection, privacy, and security laws and regulations, with non-compliance potentially leading to liability and reputational damage[213](index=213&type=chunk)[214](index=214&type=chunk) - The company does not intend to pay dividends in the foreseeable future, requiring investors to rely on stock price appreciation for investment returns[258](index=258&type=chunk) [Unresolved Staff Comments](index=61&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments. - Not applicable[278](index=278&type=chunk) [Cybersecurity](index=61&type=section&id=Item%201C.%20Cybersecurity) The company has established comprehensive processes to identify, assess, and manage cybersecurity threats as part of its risk management system, overseen by a dedicated privacy, security, and safety team. - The company has comprehensive processes to identify, assess, and manage cybersecurity threats, overseen by a dedicated privacy, security, and safety team[279](index=279&type=chunk) - Significant cybersecurity incidents are regularly reviewed by cross-functional working groups and reported to senior management and the audit committee[280](index=280&type=chunk)[281](index=281&type=chunk) - To date, cybersecurity threats have not materially impacted the company's business strategy, operating results, or financial condition, but future impacts cannot be guaranteed[282](index=282&type=chunk) [Properties](index=61&type=section&id=Item%202.%20Properties) As of December 31, 2023, the company leases approximately 180,000 square feet of office space in Lehi, Utah, for its headquarters, with the lease extending until 2033. - As of December 31, 2023, the company leases approximately **180,000 square feet** of office space in Lehi, Utah, for its corporate headquarters, with the lease expiring in 2033[283](index=283&type=chunk) - The company also has an office in Noida, India, and believes its existing facilities are sufficient for current US needs, with additional space available for lease to support future business expansion[283](index=283&type=chunk)[284](index=284&type=chunk) [Legal Proceedings](index=62&type=section&id=Item%203.%20Legal%20Proceedings) As of December 31, 2023, and the date of this consolidated financial statement, the company is not involved in any legal proceedings expected to have a material adverse effect on its financial condition, operating results, or liquidity. - As of December 31, 2023, the company is not involved in any legal proceedings expected to have a material adverse effect on its financial condition, operating results, or liquidity[285](index=285&type=chunk) - The company may face future claims from third parties, including intellectual property infringement claims, and litigation, regardless of outcome, could adversely affect the business due to defense and settlement costs and diversion of management resources[285](index=285&type=chunk) [Mine Safety Disclosures](index=62&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no mine safety disclosures. - None[286](index=286&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=63&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock began trading on the New York Stock Exchange under the symbol "WEAV" on November 11, 2021, with 34 registered holders as of March 8, 2024, and no cash dividends have been declared or paid. - The company's common stock began trading on the New York Stock Exchange under the ticker symbol **“WEAV”** on November 11, 2021[289](index=289&type=chunk) - As of March 8, 2024, the company had **34** registered holders of its common stock[290](index=290&type=chunk) - The company has never declared or paid any cash dividends and expects to retain all future earnings for business development and general corporate purposes in the foreseeable future[291](index=291&type=chunk)[258](index=258&type=chunk) - The company has not engaged in unregistered sales of securities or issuer purchases of equity securities[297](index=297&type=chunk)[298](index=298&type=chunk) [Reserved](index=64&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved, with no specific information provided. - This item is reserved[299](index=299&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=64&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's financial condition and operating results for the year ended December 31, 2023, highlighting revenue growth, cost structure, key business metrics, and liquidity. - The company provides an all-in-one customer experience and payment software platform, primarily serving small and medium-sized businesses in dental, optometry, veterinary, and other professional healthcare sectors[302](index=302&type=chunk)[303](index=303&type=chunk) Revenue and Cost Structure (as of December 31, $ thousands) | Item | 2023 ($ thousands) | 2022 ($ thousands) | | :--- | :--- | :--- | | Subscription and Payment Processing Revenue | 162,715 | 136,592 | | Subscription and Payment Processing Costs | (38,194) | (35,008) | | Subscription and Payment Processing Gross Profit | 124,521 | 101,584 | | Subscription and Payment Processing Gross Margin | 77% | 74% | | Onboarding Services Revenue | 3,232 | 1,288 | | Onboarding Services Costs | (8,710) | (9,612) | | Onboarding Services Gross Profit | (5,478) | (8,324) | | Onboarding Services Gross Margin | (169)% | (646)% | | Hardware Revenue | 4,521 | 4,237 | | Hardware Costs | (7,473) | (8,656) | | Hardware Gross Profit | (2,952) | (4,419) | | Hardware Gross Margin | (65)% | (104)% | Key Business Metrics (as of December 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Number of Locations | 31,002 | 27,193 | | Dollar-Based Net Retention Rate | 95% | 99% | | Dollar-Based Gross Retention Rate | 92% | 94% | Operating Results Overview (as of December 31, $ thousands) | Metric | 2023 ($ thousands) | 2022 ($ thousands) | Change Amount ($ thousands) | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Revenue | 170,468 | 142,117 | 28,351 | 20% | | Sales and Marketing Expenses | 70,765 | 65,378 | 5,387 | 8% | | Research and Development Expenses | 34,040 | 30,714 | 3,326 | 11% | | General and Administrative Expenses | 45,652 | 42,453 | 3,199 | 8% | | Operating Loss | (34,366) | (49,704) | 15,338 | (31)% | | Net Loss | (31,031) | (49,738) | 18,707 | (38)% | Non-GAAP Financial Measures (as of December 31, $ thousands) | Metric | 2023 ($ thousands) | 2022 ($ thousands) | | :--- | :--- | :--- | | Free Cash Flow | 6,531 | (15,893) | | Free Cash Flow Margin | 4% | (11)% | | Adjusted EBITDA | (7,846) | (27,203) | Cash Flow Overview (as of December 31, $ thousands) | Activity Type | 2023 ($ thousands) | 2022 ($ thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 10,221 | (12,766) | | Net Cash from Investing Activities | (7,739) | (54,026) | | Net Cash from Financing Activities | (13,723) | (7,207) | - As of December 31, 2023, the company had **$50.8 million** in cash and cash equivalents and **$58.1 million** in short-term investments, believing these resources are sufficient to meet working capital and capital expenditure needs for the next 12 months[361](index=361&type=chunk)[363](index=363&type=chunk) - The company repaid the **$10 million** outstanding balance under its Silicon Valley Bank credit facility in November 2023, with the entire **$50 million** credit facility available as of December 31, 2023[380](index=380&type=chunk)[381](index=381&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=80&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discloses the company's market risks, primarily interest rate risk and foreign currency risk, noting that its cash, cash equivalents, and short-term investments are not sensitive to interest rate changes due to their short maturities. - The fair value of the company's cash, cash equivalents, and short-term investments is relatively insensitive to interest rate changes due to their short maturities[386](index=386&type=chunk) - The company's credit facility has a floating interest rate (prime rate plus 0.25% or 3.50%, whichever is higher), so an increase in the prime rate would increase interest costs on any borrowings[387](index=387&type=chunk) - Most of the company's customer subscription agreements are denominated in US dollars, with a small portion in Canadian dollars; some operating expenses are denominated in foreign currencies like Canadian dollars and Indian rupees, subject to exchange rate fluctuations[388](index=388&type=chunk) - Foreign exchange rate fluctuations have not materially impacted the company's historical operating results, and the company currently does not engage in derivative or hedging transactions[388](index=388&type=chunk) [Financial Statements and Supplementary Data](index=82&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes the company's consolidated financial statements for the years ended December 31, 2023, and 2022, along with detailed notes explaining organizational structure, accounting policies, revenue recognition, fair value measurements, and other key financial information. - PricewaterhouseCoopers LLP issued an unqualified audit report on the company's consolidated financial statements for the years ended December 31, 2023, and 2022[393](index=393&type=chunk) Consolidated Balance Sheet Overview (as of December 31, $ thousands) | Metric | 2023 ($ thousands) | 2022 ($ thousands) | | :--- | :--- | :--- | | Total Assets | 201,012 | 208,349 | | Total Liabilities | 122,055 | 125,130 | | Stockholders' Equity | 78,957 | 83,219 | Consolidated Statements of Operations Overview (as of December 31, $ thousands) | Metric | 2023 ($ thousands) | 2022 ($ thousands) | 2021 ($ thousands) | | :--- | :--- | :--- | :--- | | Revenue | 170,468 | 142,117 | 115,871 | | Gross Profit | 116,091 | 88,841 | 66,499 | | Operating Loss | (34,366) | (49,704) | (50,391) | | Net Loss | (31,031) | (49,738) | (51,690) | Consolidated Statements of Cash Flows Overview (as of December 31, $ thousands) | Activity Type | 2023 ($ thousands) | 2022 ($ thousands) | 2021 ($ thousands) | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 10,221 | (12,766) | (20,370) | | Net Cash from Investing Activities | (7,739) | (54,026) | (9,800) | | Net Cash from Financing Activities | (13,723) | (7,207) | 110,400 | | Net Increase (Decrease) in Cash and Cash Equivalents | (11,241) | (73,999) | 80,200 | - The company adopted new lease accounting standards (ASC 842) on January 1, 2022, with retrospective adjustments to relevant financial statements[394](index=394&type=chunk)[464](index=464&type=chunk) - As of December 31, 2023, the company had federal and state net operating loss (NOL) carryforwards of approximately **$191.8 million** and **$139.6 million**, respectively, though their utilization may be limited by ownership changes[500](index=500&type=chunk) Stock Option Activity Under Equity Incentive Plans (as of December 31, 2023) | Metric | Number of Stock Options | Weighted-Average Exercise Price | | :--- | :--- | :--- | | Unexercised as of December 31, 2022 | 4,185,876 | $6.32 | | Exercised | (1,756,386) | $7.33 | | Forfeited and Expired | (588,755) | $9.62 | | Unexercised as of December 31, 2023 | 1,840,735 | $4.32 | - As of December 31, 2023, unrecognized share-based compensation expense related to unvested restricted stock units (RSUs) was **$38.4 million**, expected to be recognized over an average period of **2.01 years**[527](index=527&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=113&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) The company has no changes in or disagreements with accountants on accounting and financial disclosures. - None[543](index=543&type=chunk) [Controls and Procedures](index=113&type=section&id=Item%209A.%20Controls%20and%20Procedures) Company management, including the CEO and CFO, concluded that the disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2023, with this report not including an attestation report from an independent registered public accounting firm due to the company's "emerging growth company" exemption. - As of December 31, 2023, company management, including the CEO and CFO, assessed and concluded that the company's disclosure controls and procedures were effective[545](index=545&type=chunk) - As of December 31, 2023, company management assessed and concluded that the company's internal control over financial reporting was effective[546](index=546&type=chunk) - This annual report does not include an attestation report from the independent registered public accounting firm regarding the effectiveness of internal control, as the company qualifies as an "emerging growth company"[546](index=546&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the quarter ended December 31, 2023[547](index=547&type=chunk) - Management acknowledges that all control systems have inherent limitations and cannot provide absolute assurance, potentially failing to prevent or detect all errors and fraud[548](index=548&type=chunk) [Other Information](index=114&type=section&id=Item%209B.%20Other%20Information) During the fiscal quarter ended December 31, 2023, no company director or officer informed the company of the adoption or termination of any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement". - During the fiscal quarter ended December 31, 2023, no company director or senior officer informed the company of the adoption or termination of any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement”[549](index=549&type=chunk) [Disclosure Regarding Foreign Jurisdiction that Prevent Inspections.](index=115&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdiction%20that%20Prevent%20Inspections.) The company has no disclosures regarding foreign jurisdictions that prevent inspections. - Not applicable[550](index=550&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=116&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The information required for this item is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023. - This information is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders[553](index=553&type=chunk) [Executive Compensation](index=116&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023. - This information is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders[554](index=554&type=chunk) [Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=116&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) The information required for this item is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023. - This information is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders[555](index=555&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=116&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The information required for this item is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023. - This information is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders[556](index=556&type=chunk) [Principal Accounting Fees and Services](index=116&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The information required for this item is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023. - This information is incorporated by reference into the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders[557](index=557&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=117&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits included in the company's annual report, with financial statement information incorporated by reference and all financial statement schedules omitted as not applicable or already included. - Financial statement information is incorporated by reference into Item 8, "Financial Statements and Supplementary Data," of Part II of this annual report[560](index=560&type=chunk) - All financial statement schedules have been omitted because the information is not applicable or is included in the financial statements or notes thereto[560](index=560&type=chunk) - The company has filed or incorporated by reference a list of exhibits to this annual report[561](index=561&type=chunk) [Form 10-K Summary](index=120&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has no Form 10-K Summary. - Not applicable[567](index=567&type=chunk) [Signatures](index=121&type=section&id=Signatures) This annual report is signed by authorized representatives of Weave Communications, Inc., including CEO and Director Brett White and CFO Alan Taylor, on March 13, 2024, and includes a power of attorney. - This annual report is signed by Brett White, Chief Executive Officer and Director, and Alan Taylor, Chief Financial Officer of Weave Communications, Inc., on March 13, 2024[571](index=571&type=chunk)[574](index=574&type=chunk) - This section includes a power of attorney authorizing designated individuals to sign any amendments to this annual report on behalf of the signatories[572](index=572&type=chunk)

Overview - Weave's mission is to elevate the patient experience through a unified platform that improves business operations so healthcare professionals can focus on patient care and realize their dreams[10] - Weave provides an all-in-one customer experience software platform for dental, optometry, veterinary, and medical practices[11] - Weave has a strong balance sheet with $108.8 million in cash and short-term investments as of December 31, 2023[12] Market Opportunity - Weave estimates its total addressable market (TAM) at $12.5 billion, including all US healthcare SMBs and service-oriented SMBs[19] - The company estimates the dental, optometry, and veterinary TAM at $5.0 billion[19] - Weave's trailing twelve months revenue from Q1'23 through Q4'23 was $0.17 billion[19] Product Impact - Weave offices schedule an average of 9 additional patients a week after joining[41] - Weave's texting feature saves offices an average of 2 hours & 50 minutes per day[41] - Weave helps increase revenue by $3,708 per month on average by reducing no-show rates and last-minute cancellations[41] Financial Performance - Weave achieved 21.2% year-over-year revenue growth in Q4 2023[56] - The company has shown 8 consecutive quarters of improving non-GAAP gross margin, with a 300 bps improvement in Q4'23 compared to Q4'22[55] - Weave has also shown 8 consecutive quarters of improving non-GAAP operating margin, with a 740 bps improvement in Q4'23 compared to Q4'22[55] - Weave's Q1-24 revenue guidance is between $45.2 million and $46.2 million, with a non-GAAP loss from operations between $(2.5 million) and $(1.5 million)[86]

[Fourth Quarter and Full Year 2023 Financial Results Overview](index=1&type=section&id=Fourth%20Quarter%20and%20Full%20Year%202023%20Financial%20Results%20Overview) [Company Introduction](index=1&type=section&id=Company%20Introduction) Weave (NYSE: WEAV) is a leading all-in-one customer experience and payments software platform designed for small and medium-sized healthcare businesses - Weave (NYSE: WEAV) is an all-in-one customer experience and payments software platform for **small and medium-sized healthcare businesses**[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Brett White highlighted Weave's strong performance in Q4 2023 and excellent full-year results, with continuous improvements in revenue growth, gross margin, operating margin, Adjusted EBITDA, free cash flow, and customer acquisition, positioning the company for continued success in 2024 - CEO Brett White noted strong Q4 2023 performance and excellent full-year results, with continuous improvements in **revenue growth, gross margin, operating margin, Adjusted EBITDA, free cash flow, and customer acquisition**[3](index=3&type=chunk) - The company is poised for continued success in 2024, leveraging **growing market opportunities, customer base economic resilience, and platform innovation**[3](index=3&type=chunk) [Fourth Quarter 2023 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%202023%20Financial%20Highlights) Weave achieved strong financial results in Q4 2023, with total revenue increasing 21.2% year-over-year to $45.7 million, positive cash flow from operations and free cash flow, and narrowed GAAP and non-GAAP operating and net losses Key Financial Highlights for Q4 2023 | Metric | Q4 2023 (million USD) | Q4 2022 (million USD) | Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---- | | Total Revenue | $45.7 | $37.7 | +21.2% | [4, 5] | | GAAP Gross Margin | 69.1% | 66.2% | +2.9 pp | [5] | | Non-GAAP Gross Margin | 69.7% | 66.7% | +3.0 pp | [5] | | GAAP Operating Loss | $(8.0) | $(9.7) | Improved | [5] | | Non-GAAP Operating Loss | $(1.7) | $(4.2) | Improved | [5] | | GAAP Net Loss | $(7.0) | $(9.3) | Improved | [5] | | GAAP Net Loss Per Share | $(0.10) | $(0.14) | Improved | [5] | | Non-GAAP Net Loss | $(0.8) | $(3.7) | Improved | [5] | | Non-GAAP Net Loss Per Share | $(0.01) | $(0.06) | Improved | [5] | | Net Cash from Operating Activities | $3.7 | $(2.8) | Improved | [4, 5] | | Free Cash Flow | $2.9 | $(3.8) | Improved | [4, 6] | [Full Year 2023 Financial Highlights](index=2&type=section&id=Full%20Year%202023%20Financial%20Highlights) For fiscal year 2023, Weave's total revenue grew 19.9% to $170.5 million, achieving positive cash flow from operations of $10.2 million and free cash flow of $6.5 million, a significant turnaround from 2022's negative figures, with substantially narrowed GAAP and non-GAAP operating and net losses Key Financial Highlights for Full Year 2023 | Metric | FY 2023 (million USD) | FY 2022 (million USD) | Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---- | | Total Revenue | $170.5 | $142.1 | +19.9% | [4, 9] | | GAAP Operating Loss | $(34.4) | $(49.7) | Improved | [9] | | Non-GAAP Operating Loss | $(11.5) | $(31.0) | Improved | [9] | | GAAP Net Loss | $(31.0) | $(49.7) | Improved | [9] | | GAAP Net Loss Per Share | $(0.46) | $(0.76) | Improved | [9] | | Non-GAAP Net Loss | $(8.2) | $(31.0) | Improved | [9] | | Non-GAAP Net Loss Per Share | $(0.12) | $(0.48) | Improved | [9] | | Net Cash from Operating Activities | $10.2 | $(12.8) | Improved | [4, 9] | | Free Cash Flow | $6.5 | $(15.9) | Improved | [4, 9] | [Recent Business Highlights](index=2&type=section&id=Recent%20Business%20Highlights) As of December 31, 2023, Weave reported a Dollar-Based Net Revenue Retention (NRR) of 95% and Dollar-Based Gross Revenue Retention (GRR) of 92%, adding 3,809 new customer locations for a total of 31,002, while appointing David McNeil as Chief Revenue Officer, enhancing the platform with ACH debit and payment plans, and receiving multiple industry recognitions Key Business Metrics (as of December 31, 2023) | Metric | Value | Source Chunk | | :--------------------------------- | :------ | :---- | | Dollar-Based Net Revenue Retention (NRR) | 95% | [9] | | Dollar-Based Gross Revenue Retention (GRR) | 92% | [9] | | Cash and Cash Equivalents plus Short-Term Investments | $108.8M | [9] | | New Customer Locations in 2023 | 3,809 | [9] | | Total Customer Locations as of Dec 31, 2023 | 31,002 | [9] | - David McNeil appointed Chief Revenue Officer, bringing over **25 years of SaaS business scaling experience**[9](index=9&type=chunk) - Platform enhanced with **ACH debit and payment plans**, improving transaction security, reducing costs for healthcare providers, and offering flexible payment options for patients[9](index=9&type=chunk) - Recognized by G2 as a leading platform in patient relationship management, ranking **first in 27 different categories**, and named a 'Best Workplace' for the **fifth consecutive year**[9](index=9&type=chunk) [Financial Outlook for Q1 and Full Year 2024](index=3&type=section&id=Financial%20Outlook%20for%20Q1%20and%20Full%20Year%202024) Weave projects total revenue for Q1 2024 to be between $45.2 million and $46.2 million, and for the full year 2024 between $194.0 million and $198.0 million, with non-GAAP operating loss expected to be between $(2.5) million and $(1.5) million for Q1, and between $(6.0) million and $(2.0) million for the full year Financial Guidance for Q1 and Full Year 2024 | Metric | Q1 2024 (million USD) | FY 2024 (million USD) | Source Chunk | | :-------------------------- | :-------------------- | :--------------------------- | :---- | | Total Revenue | $45.2 - $46.2 | $194.0 - $198.0 | [10] | | Non-GAAP Operating Loss | $(2.5) - $(1.5) | $(6.0) - $(2.0) | [10] | | Weighted Average Shares Outstanding | 70.5 | 71.7 | [10] | - Non-GAAP operating loss guidance excludes stock-based compensation expenses, which are difficult to predict and subject to change[11](index=11&type=chunk) [Supplemental Information and Non-GAAP Financial Measures](index=3&type=section&id=Supplemental%20Information%20and%20Non-GAAP%20Financial%20Measures) [About Weave](index=3&type=section&id=About%20Weave) Weave is an all-in-one customer experience and payments software platform designed for small and medium-sized healthcare practices, connecting the entire patient journey from first call to final invoice, helping local healthcare professionals attract, communicate with, and engage patients to grow their businesses - Weave provides an **all-in-one customer experience and payments software platform** serving small and medium-sized healthcare practices[13](index=13&type=chunk) - The platform connects the entire patient journey, helping healthcare professionals **attract, communicate with, and engage patients** to grow their businesses[13](index=13&type=chunk) [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This press release contains forward-looking statements, including financial estimates for Q1 and full year 2024, which are subject to risks and uncertainties such as the ability to attract and retain customers, manage growth, economic conditions, competition, and platform enhancements, potentially causing actual results to differ materially, and the company undertakes no obligation to update these statements - This press release contains forward-looking statements, including estimates for **Q1 and full year 2024 revenue and non-GAAP operating loss**[14](index=14&type=chunk) - These statements involve risks and uncertainties, such as the ability to **attract and retain customers, manage growth, economic conditions, competition, and platform enhancements**, which may cause actual results to differ materially from forward-looking statements[15](index=15&type=chunk)[16](index=16&type=chunk) - The company undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of publication[17](index=17&type=chunk) [Channels for Disclosure of Information](index=4&type=section&id=Channels%20for%20Disclosure%20of%20Information) Weave Communications fulfills its Regulation FD disclosure obligations through its investor relations website, blog posts, press releases, public conference calls, webcasts, and social media platforms (X/Twitter, Facebook, LinkedIn), encouraging investors and media to monitor these channels for information - Weave fulfills Regulation FD disclosure obligations via its **investor relations website, blog, press releases, public conference calls, webcasts, and social media (X, Facebook, LinkedIn)**[18](index=18&type=chunk) [Supplemental Financial Definitions](index=4&type=section&id=Supplemental%20Financial%20Definitions) This section provides definitions for Weave's key supplemental financial metrics, including Dollar-Based Net Revenue Retention (NRR), Dollar-Based Gross Revenue Retention (GRR), and Number of Locations, which help investors understand the company's customer growth and retention [Dollar-Based Net Revenue Retention (NRR)](index=4&type=section&id=Dollar-Based%20Net%20Revenue%20Retention%20(NRR)) NRR is calculated by dividing the adjusted monthly revenue (AMR) of a base group of active customer locations in the same month of the following year (Comparison Month) by their AMR in the Base Month, with annual NRR being the weighted average of monthly net retention rates over the past twelve months, and AMR including subscription revenue and the average recurring payment revenue over the past three months - NRR is calculated by comparing the **adjusted monthly revenue (AMR)** of a base group of active customer locations in the same month of the following year to their AMR in the base month[19](index=19&type=chunk) - AMR includes **subscription revenue** and the **average recurring payment revenue** over the past three months[19](index=19&type=chunk) [Dollar-Based Gross Revenue Retention (GRR)](index=4&type=section&id=Dollar-Based%20Gross%20Revenue%20Retention%20(GRR)) GRR measures the retained revenue from a base group of subscribed customer locations from a Base Month by calculating their remaining AMR twelve months after the Base Month and dividing it by the Base Month's AMR, reflecting revenue reduction due to customer churn but excluding changes from revenue expansion, contraction, or new customer locations - GRR is calculated by comparing the **remaining adjusted monthly revenue (AMR)** of a base group of subscribed customer locations twelve months after the base month to their AMR in the base month[20](index=20&type=chunk) - GRR reflects revenue reduction due to **customer churn**, but excludes changes from revenue expansion, contraction, or new customer locations[20](index=20&type=chunk) [Number of Locations](index=4&type=section&id=Number%20of%20Locations) The number of customer locations refers to the total active subscribed customer locations on the Weave platform at the end of each month, where a single organization with multiple departments, branches, or subsidiaries, each with a separate subscription, is counted as multiple locations, and this information is only provided in annual and Q4 performance reports - 'Number of Locations' refers to the **total active subscribed customer locations** on the Weave platform at the end of each month[21](index=21&type=chunk) - A single organization with multiple subscribed departments or offices is counted as **multiple locations**[21](index=21&type=chunk) - Customer location information is provided only in **annual and Q4 performance reports**[22](index=22&type=chunk) [Non-GAAP Financial Measures Definitions and Limitations](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20Definitions%20and%20Limitations) Weave utilizes several non-GAAP financial measures, such as non-GAAP net loss, gross profit, operating expenses, operating loss, Adjusted EBITDA, and free cash flow, to analyze financial performance and evaluate operational results, providing additional investor insight despite inherent limitations that necessitate they not be viewed in isolation or as substitutes for GAAP reported results - Weave uses non-GAAP financial measures (e.g., **non-GAAP net loss, gross profit, operating expenses, operating loss, Adjusted EBITDA, and free cash flow**) to analyze financial performance and evaluate operational results[23](index=23&type=chunk) - These non-GAAP metrics have limitations and should not be viewed in isolation or as substitutes for GAAP financial results[23](index=23&type=chunk) [Non-GAAP Net Loss, Margin, and Per Share](index=5&type=section&id=Non-GAAP%20Net%20Loss,%20Margin,%20and%20Per%20Share) Non-GAAP net loss is defined as GAAP net loss adjusted to exclude stock-based compensation expense, with non-GAAP net loss margin being the percentage of non-GAAP net loss to revenue, and non-GAAP net loss per share calculated by dividing non-GAAP net loss by the diluted weighted-average shares outstanding - Non-GAAP net loss is the result of **GAAP net loss excluding stock-based compensation expense**[24](index=24&type=chunk) - Non-GAAP net loss margin is the percentage of non-GAAP net loss to revenue, and non-GAAP net loss per share is calculated by dividing non-GAAP net loss by the **diluted weighted-average shares outstanding**[24](index=24&type=chunk) [Non-GAAP Gross Profit and Margin](index=5&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Margin) Non-GAAP gross profit is defined as GAAP gross profit adjusted to exclude stock-based compensation expense, with non-GAAP gross margin calculated as the percentage of non-GAAP gross profit to revenue - Non-GAAP gross profit is the result of **GAAP gross profit excluding stock-based compensation expense**[25](index=25&type=chunk) - Non-GAAP gross margin is the percentage of **non-GAAP gross profit to revenue**[25](index=25&type=chunk) [Non-GAAP Operating Expenses](index=5&type=section&id=Non-GAAP%20Operating%20Expenses) Non-GAAP operating expenses, whether in total or by component (i.e., sales and marketing, research and development, or general and administrative), are defined as the corresponding GAAP operating expenses adjusted to exclude applicable stock-based compensation expense - Non-GAAP operating expenses (sales and marketing, R&D, general and administrative) are the corresponding GAAP operating expenses excluding **applicable stock-based compensation expense**[26](index=26&type=chunk) [Non-GAAP Loss from Operations and Margin](index=5&type=section&id=Non-GAAP%20Loss%20from%20Operations%20and%20Margin) Non-GAAP loss from operations is defined as GAAP loss from operations less stock-based compensation expense, with the non-GAAP loss from operations margin being this non-GAAP figure as a percentage of revenue - Non-GAAP loss from operations is the result of **GAAP loss from operations less stock-based compensation expense**[27](index=27&type=chunk) - Non-GAAP loss from operations margin is the percentage of **non-GAAP loss from operations to revenue**[27](index=27&type=chunk) [Adjusted EBITDA](index=5&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA is defined as earnings before interest expense, interest income, other income/expense, provision for income taxes, depreciation, and amortization, further excluding stock-based compensation expense, and is used by management and investors to measure financial and operational performance and for budgeting, providing consistency and comparability with past financial results - Adjusted EBITDA is earnings before **interest, taxes, depreciation, amortization, and stock-based compensation expense**[28](index=28&type=chunk)[29](index=29&type=chunk) - This metric provides management and investors with **consistency and comparability** in financial performance, and is used for measuring operational performance and budgeting[29](index=29&type=chunk) [Free Cash Flow](index=6&type=section&id=Free%20Cash%20Flow) Free cash flow is calculated as net cash provided by (or used in) operating activities, less purchases of property and equipment and capitalized internal-use software costs, serving as a useful liquidity measure that, even when negative, provides information about the amount of cash consumed by operating and investing activities - Free cash flow is **net cash from operating activities** less purchases of property and equipment and capitalized internal-use software costs[30](index=30&type=chunk) - It is a useful liquidity metric, providing information on cash consumed by operating and investing activities, even when negative[30](index=30&type=chunk) [Limitations of Non-GAAP Financial Measures](index=6&type=section&id=Limitations%20of%20Non-GAAP%20Financial%20Measures) Non-GAAP financial measures have several limitations, including potential incomparability with other companies' calculations; specifically, free cash flow does not reflect future contractual commitments or total increases/decreases in cash balances, while Adjusted EBITDA excludes non-cash stock-based compensation expense and working capital needs, all of which may reduce their analytical usefulness - Non-GAAP financial information may differ from other companies' calculations, leading to **incomparability**[31](index=31&type=chunk) - Free cash flow does not reflect **future contractual commitments** or total increases/decreases in cash balances[31](index=31&type=chunk) - Adjusted EBITDA excludes **non-cash stock-based compensation expense** and working capital needs, potentially reducing its analytical usefulness[31](index=31&type=chunk) [Condensed Consolidated Financial Statements (GAAP)](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(GAAP)) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2023, Weave's total assets were $201.0 million, down from $208.3 million in 2022, with total liabilities also decreasing from $125.1 million to $122.1 million, and total stockholders' equity at $79.0 million, lower than the previous year's $83.2 million Condensed Consolidated Balance Sheets (Key Data, in thousands USD) | Metric | Dec 31, 2023 (K USD) | Dec 31, 2022 (K USD) | Y-o-Y Change (K USD) | Source Chunk | | :--------------------------------- | :----------- | :----------- | :--------- | :---- | | Total Assets | $201,012 | $208,349 | $(7,337) | [34] | | Total Liabilities | $122,055 | $125,130 | $(3,075) | [34] | | Total Stockholders' Equity | $78,957 | $83,219 | $(4,262) | [34] | | Cash and Cash Equivalents | $50,756 | $61,997 | $(11,241) | [34] | | Short-Term Investments | $58,088 | $51,340 | $6,748 | [34] | | Current Portion of Long-Term Debt | $0 | $10,000 | $(10,000) | [34] | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For fiscal year 2023, Weave's revenue increased to $170.5 million from $142.1 million in 2022, with gross profit rising from $88.8 million to $116.1 million, and the company significantly narrowed its GAAP operating loss to $(34.4) million from $(49.7) million, and net loss improved from $(49.7) million to $(31.0) million Condensed Consolidated Statements of Operations (Key Data, in thousands USD) | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | Revenue | $170,468 | $142,117 | +19.9% | $45,692 | $37,685 | +21.2% | [36] | | Cost of Revenue | $54,377 | $53,276 | +2.1% | $14,111 | $12,751 | +10.7% | [36] | | Gross Profit | $116,091 | $88,841 | +30.7% | $31,581 | $24,934 | +26.7% | [36] | | Total Operating Expenses | $150,457 | $138,545 | +8.6% | $39,574 | $34,679 | +14.1% | [36] | | Loss from Operations | $(34,366) | $(49,704) | Improved | $(7,993) | $(9,745) | Improved | [36] | | Net Loss | $(31,031) | $(49,738) | Improved | $(7,039) | $(9,266) | Improved | [36] | | Net Loss Per Share | $(0.46) | $(0.76) | Improved | $(0.10) | $(0.14) | Improved | [36] | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In fiscal year 2023, Weave's cash flow from operating activities turned positive at $10.2 million, a significant improvement from negative $12.8 million in 2022, while net cash used in investing activities decreased to $(7.7) million, primarily due to changes in short-term investments, and net cash used in financing activities increased to $(13.7) million Condensed Consolidated Statements of Cash Flows (Key Data, in thousands USD) | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | Net Cash from Operating Activities | $10,221 | $(12,766) | Improved | $3,742 | $(2,841) | Improved | [39] | | Net Cash from Investing Activities | $(7,739) | $(54,026) | Improved | $(3,021) | $(51,841) | Improved | [39] | | Net Cash from Financing Activities | $(13,723) | $(7,207) | Increased | $(13,256) | $(1,679) | Increased | [39] | | Net Increase (Decrease) in Cash and Cash Equivalents | $(11,241) | $(73,999) | Improved | $(12,535) | $(56,361) | Improved | [39] | | Cash and Cash Equivalents, End of Period | $50,756 | $61,997 | $(11,241) | $50,756 | $61,997 | $(11,241) | [39] | [Disaggregated Revenue and Cost of Revenue (GAAP)](index=10&type=section&id=Disaggregated%20Revenue%20and%20Cost%20of%20Revenue%20(GAAP)) Weave's primary revenue source, 'Subscription and Payment Processing,' saw significant growth in 2023, with revenue increasing from $136.6 million (74% gross margin) in 2022 to $162.7 million (77% gross margin), while 'Onboarding' and 'Hardware' segments remained at negative gross margins but showed improvement in 2023 compared to 2022 Disaggregated Revenue and Cost of Revenue (GAAP, in thousands USD) | Business Segment | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | **Subscription and Payment Processing** | Revenue | $162,715 | $136,592 | +19.1% | $43,726 | $36,163 | +20.9% | [41] | | | Gross Profit | $124,521 | $101,584 | +22.6% | $33,505 | $27,530 | +21.7% | [41] | | | Gross Margin | 77% | 74% | +3 pp | 77% | 76% | +1 pp | [41] | | **Onboarding** | Revenue | $3,232 | $1,288 | +150.9% | $824 | $428 | +92.5% | [41] | | | Gross Profit | $(5,478) | $(8,324) | Improved | $(1,198) | $(1,665) | Improved | [41] | | | Gross Margin | (169)% | (646)% | Improved | (145)% | (389)% | Improved | [41] | | **Hardware** | Revenue | $4,521 | $4,237 | +6.7% | $1,142 | $1,094 | +4.4% | [41] | | | Gross Profit | $(2,952) | $(4,419) | Improved | $(726) | $(931) | Improved | [41] | | | Gross Margin | (65)% | (104)% | Improved | (64)% | (85)% | Improved | [41] | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) [Non-GAAP Gross Profit Reconciliation](index=11&type=section&id=Non-GAAP%20Gross%20Profit%20Reconciliation) For fiscal year 2023, non-GAAP gross profit was $117.1 million, up from $89.6 million in 2022, with non-GAAP gross margin at 69%, an increase from 63% in 2022, primarily achieved by adding back stock-based compensation expense Non-GAAP Gross Profit Reconciliation (in thousands USD) | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | GAAP Gross Profit | $116,091 | $88,841 | +30.7% | $31,581 | $24,934 | +26.7% | [44] | | Stock-Based Compensation Expense Add-back | $971 | $723 | +34.3% | $249 | $209 | +19.1% | [44] | | Non-GAAP Gross Profit | $117,062 | $89,564 | +30.7% | $31,830 | $25,143 | +26.6% | [44] | | GAAP Gross Margin | 68% | 63% | +5 pp | 69% | 66% | +3 pp | [44] | | Non-GAAP Gross Margin | 69% | 63% | +6 pp | 70% | 67% | +3 pp | [44] | [Non-GAAP Operating Expenses Reconciliation](index=11&type=section&id=Non-GAAP%20Operating%20Expenses%20Reconciliation) In fiscal year 2023, non-GAAP sales and marketing expenses were $66.5 million, non-GAAP R&D expenses were $28.5 million, and non-GAAP general and administrative expenses were $33.6 million, with all non-GAAP operating expense categories showing year-over-year growth, albeit at a lower rate than GAAP figures due to the exclusion of stock-based compensation expense Non-GAAP Operating Expenses Reconciliation (in thousands USD) | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | **Sales and Marketing** | | | | | | | | | GAAP | $70,765 | $65,378 | +8.2% | $18,291 | $16,118 | +13.5% | [45] | | Stock-Based Compensation Expense Exclude | $(4,233) | $(3,436) | +23.2% | $(776) | $(1,105) | -29.8% | [45] | | Non-GAAP | $66,532 | $61,942 | +7.4% | $17,515 | $15,013 | +16.7% | [45] | | **Research and Development** | | | | | | | | | GAAP | $34,040 | $30,714 | +10.8% | $9,133 | $8,185 | +11.6% | [45] | | Stock-Based Compensation Expense Exclude | $(5,590) | $(4,576) | +22.1% | $(1,863) | $(1,654) | +12.6% | [45] | | Non-GAAP | $28,450 | $26,138 | +8.8% | $7,270 | $6,531 | +11.3% | [45] | | **General and Administrative** | | | | | | | | | GAAP | $45,652 | $42,453 | +7.5% | $12,150 | $10,376 | +17.1% | [45] | | Stock-Based Compensation Expense Exclude | $(12,029) | $(10,017) | +20.1% | $(3,359) | $(2,557) | +31.4% | [45] | | Non-GAAP | $33,623 | $32,436 | +3.7% | $8,791 | $7,819 | +12.4% | [45] | [Non-GAAP Loss from Operations Reconciliation](index=12&type=section&id=Non-GAAP%20Loss%20from%20Operations%20Reconciliation) For fiscal year 2023, non-GAAP loss from operations significantly improved to $(11.5) million, down from $(31.0) million in 2022, with the non-GAAP operating loss margin also improving from (22)% to (7)%, primarily due to the exclusion of stock-based compensation expense Non-GAAP Loss from Operations Reconciliation (in thousands USD) | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | GAAP Loss from Operations | $(34,366) | $(49,704) | Improved | $(7,993) | $(9,745) | Improved | [47] | | Stock-Based Compensation Expense Add-back | $22,823 | $18,752 | +21.7% | $6,247 | $5,525 | +13.1% | [47] | | Non-GAAP Loss from Operations | $(11,543) | $(30,952) | Improved | $(1,746) | $(4,220) | Improved | [47] | | GAAP Operating Loss Margin | (20)% | (35)% | Improved | (17)% | (26)% | Improved | [47] | | Non-GAAP Operating Loss Margin | (7)% | (22)% | Improved | (4)% | (11)% | Improved | [47] | [Non-GAAP Net Loss Reconciliation](index=12&type=section&id=Non-GAAP%20Net%20Loss%20Reconciliation) For fiscal year 2023, non-GAAP net loss significantly improved to $(8.2) million, down from $(31.0) million in 2022, with non-GAAP net loss per share also improving from $(0.48) to $(0.12), reflecting the exclusion of stock-based compensation expense Non-GAAP Net Loss Reconciliation (in thousands USD, except per share data) | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | GAAP Net Loss | $(31,031) | $(49,738) | Improved | $(7,039) | $(9,266) | Improved | [48] | | Stock-Based Compensation Expense Add-back | $22,823 | $18,752 | +21.7% | $6,247 | $5,525 | +13.1% | [48] | | Non-GAAP Net Loss | $(8,208) | $(30,986) | Improved | $(792) | $(3,741) | Improved | [48] | | GAAP Net Loss Per Share | $(0.46) | $(0.76) | Improved | $(0.10) | $(0.14) | Improved | [48] | | Non-GAAP Net Loss Per Share | $(0.12) | $(0.48) | Improved | $(0.01) | $(0.06) | Improved | [48] | [Free Cash Flow Reconciliation](index=13&type=section&id=Free%20Cash%20Flow%20Reconciliation) In fiscal year 2023, Weave achieved positive free cash flow of $6.5 million, a substantial improvement from negative $15.9 million in 2022, primarily driven by the turnaround in cash flow from operating activities and effective capital expenditure management Free Cash Flow Reconciliation (in thousands USD) | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | Net Cash from Operating Activities | $10,221 | $(12,766) | Improved | $3,742 | $(2,841) | Improved | [50] | | Less: Purchases of Property and Equipment | $(1,691) | $(1,895) | Improved | $(178) | $(704) | Improved | [50] | | Less: Capitalized Internal-Use Software Costs | $(1,999) | $(1,232) | Increased | $(629) | $(229) | Increased | [50] | | Free Cash Flow | $6,531 | $(15,893) | Improved | $2,935 | $(3,774) | Improved | [50] | [Adjusted EBITDA Reconciliation](index=13&type=section&id=Adjusted%20EBITDA%20Reconciliation) For fiscal year 2023, Adjusted EBITDA significantly improved to $(7.8) million, down from $(27.2) million in 2022, which reflects enhanced operational performance and the exclusion of non-cash expenses like stock-based compensation Adjusted EBITDA Reconciliation (in thousands USD) | Metric | FY 2023 (K USD) | FY 2022 (K USD) | Y-o-Y Change | Q4 2023 (K USD) | Q4 2022 (K USD) | Q4 Y-o-Y Change | Source Chunk | | :--------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :------------ | :---- | | Net Loss | $(31,031) | $(49,738) | Improved | $(7,039) | $(9,266) | Improved | [51] | | Interest Expense | $1,923 | $1,441 | +33.4% | $438 | $436 | +0.5% | [51] | | Provision for Income Taxes | $260 | $104 | +150.0% | $112 | $22 | +409.1% | [51] | | Interest Income | $(2,196) | $(1,155) | +90.1% | $(639) | $(549) | +16.4% | [51] | | Other Income/Expense, Net | $(3,322) | $(356) | +833.1% | $(865) | $(388) | +122.9% | [51] | | Depreciation | $2,441 | $2,609 | -6.5% | $625 | $606 | +3.1% | [51] | | Amortization | $1,256 | $1,140 | +10.2% | $332 | $289 | +14.9% | [51] | | Stock-Based Compensation Expense | $22,823 | $18,752 | +21.7% | $6,247 | $5,525 | +13.1% | [51] | | Adjusted EBITDA | $(7,846) | $(27,203) | Improved | $(789) | $(3,325) | Improved | [51] | [Investor and Media Information](index=3&type=section&id=Investor%20and%20Media%20Information) [Webcast Details](index=3&type=section&id=Webcast%20Details) Weave held a conference call and webcast for analysts and investors on February 21, 2024, at 4:30 PM ET, with a replay available on its investor relations website - The conference call and webcast were held on **February 21, 2024, at 4:30 PM ET**[12](index=12&type=chunk) - A replay of the webcast is available on Weave's investor relations page at **investors.getweave.com**[12](index=12&type=chunk) [Contact Information](index=6&type=section&id=Contact%20Information) Investor Relations contact is Mark McReynolds (ir@getweave.com), and Media Relations contact is Natalie House (pr@getweave.com) - Investor Relations contact: **Mark McReynolds (ir@getweave.com)**[32](index=32&type=chunk) - Media Relations contact: **Natalie House (pr@getweave.com)**[32](index=32&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-40998 Weave Communications, Inc. (Exact name of registrant as specified in its charter) (State or ...