Weave munications(US:WEAV)2023-08-08 20:26Revenue and Growth - Recurring revenues accounted for 92% of total revenue for the three months ended June 30, 2023, compared to 95% for the same period in 2022 [108]. - Subscription and payment processing revenue increased to $39.696 million for the three months ended June 30, 2023, up from $33.538 million in 2022, representing a growth of 18% [110]. - Revenue for the three months ended June 30, 2023, was $41.67 million, an increase of $6.73 million or 19% compared to $34.93 million in the same period of 2022 [143]. - Revenue for the six months ended June 30, 2023, was $81,232,000, an increase of $13,030,000 or 19% compared to $68,202,000 in the same period of 2022 [152]. - Approximately $11,200,000 or 86% of the revenue increase was due to new customer locations acquired after June 30, 2022, while $1,800,000 or 14% was from existing customer locations [152]. Profitability and Margins - The gross profit for subscription and payment processing services was $30.187 million for the three months ended June 30, 2023, with a gross margin of 76% [110]. - Gross profit margin improved to 67% for the three months ended June 30, 2023, compared to 61% in the same period of 2022, due to a decrease in cost of revenue [144]. - Gross margin improved to 67% in 2023 from 60% in 2022, attributed to a decrease in cost of revenue by $845,000 or 3% [153]. - The company’s adjusted EBITDA for the three months ended June 30, 2023, was $(3.1) million, showing a slight improvement from $(3.3) million in the previous quarter [168]. - Adjusted EBITDA for the six months ended June 30, 2023, was $(6,146,000), an improvement from $(18,271,000) in 2022 [167]. - Net loss for the three months ended June 30, 2023, was $8.99 million, a decrease from a net loss of $14.82 million in the same period of 2022 [140]. - Net loss for the six months ended June 30, 2023, was $(16,847,000), compared to $(28,653,000) in the same period of 2022 [167]. Customer Retention and Expansion - The dollar-based net retention rate decreased to 96% for the twelve months ended June 30, 2023, down from 102% in 2022 [118]. - The dollar-based gross retention rate was 92% for the twelve months ended June 30, 2023, compared to 94% in 2022 [118]. - The company aims to expand its customer base among medium-sized businesses, particularly in specialty healthcare verticals [112]. - New product offerings, such as Weave Payments, are being cross-sold to existing customers to enhance revenue growth [113]. - The company is focused on expanding into new industry verticals, having successfully entered optometry and veterinary markets [116]. Expenses and Cash Flow - Sales and marketing expenses increased by $0.71 million or 4% to $17.46 million for the three months ended June 30, 2023, primarily due to higher trade show attendance and demand generation spending [146]. - Research and development expenses rose by $1.16 million or 16% to $8.59 million for the three months ended June 30, 2023, driven by increased personnel-related costs [147]. - General and administrative expenses increased by $0.24 million or 2% to $11.83 million for the three months ended June 30, 2023, mainly due to higher personnel-related expenses [148]. - Total operating expenses for the three months ended June 30, 2023, were $37.87 million, compared to $35.77 million in the same period of 2022 [140]. - The company expects sales and marketing expenses to increase in absolute terms but decrease as a percentage of revenue over time [129]. - Research and development expenses are anticipated to remain consistent or slightly decrease as a percentage of revenue over time [132]. - Free cash flow for the six months ended June 30, 2023, was $1,516,000, compared to a negative $7,501,000 in the same period of 2022 [161]. Financial Position and Market Risk - As of June 30, 2023, the company had an accumulated deficit of $248.5 million and $36.8 million in deferred revenue recorded as a current liability [170][173]. - The company had $52.1 million in cash held as deposits and $58.8 million in other short-term investments as of June 30, 2023 [171][172]. - The company amended its revolving line of credit agreement in April 2023, extending the maturity date to August 2025 and setting EBITDA financial covenants for the 2023 fiscal year [182]. - The company expects operating cash flows to improve as it increases operational efficiency and experiences economies of scale [170]. - The company did not take any advances on its line of credit during 2022 or the three months ended June 30, 2023, and was in compliance with all loan covenants as of June 30, 2023 [186]. - The company has not incurred any costs related to indemnification obligations historically and has not accrued any liabilities for such obligations as of June 30, 2023 [184]. - As of June 30, 2023, the company's exposure to market risk has not changed materially since December 31, 2022 [195]. - For detailed information on financial market risks related to interest rates and foreign currency rates, refer to the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 [195].