Weave munications(US:WEAV)2024-11-08 22:11Revenue Performance - Recurring revenues accounted for 92% of total revenue for both the three and nine months ended September 30, 2024 and 2023, indicating strong revenue stability [112]. - Subscription and payment processing revenue for the three months ended September 30, 2024 was $50,375,000, up from $41,601,000 in the same period of 2023, representing a growth of 21.4% [115]. - Revenue for the three months ended September 30, 2024, was $52,386, an increase of $8,842 or 20% compared to $43,544 in the same period of 2023 [148]. - Revenue for the nine months ended September 30, 2024, increased to $150,145 thousand, up 20% from $124,776 thousand in the same period of 2023, primarily due to new customer locations [156]. Profitability and Margins - The gross profit margin for subscription and payment processing was 78% for the three months ended September 30, 2024, compared to 77% for the same period in 2023 [120]. - Cost of revenue for the same period was $14,659, up $1,050 or 8% from $13,609, while gross margin improved to 72% from 69% [149][150]. - Gross margin improved to 71% for the nine months ended September 30, 2024, compared to 68% in the same period of 2023, despite an increase in absolute cost of revenue [157]. Expenses - Sales and marketing expenses increased to $21,159, a rise of $3,358 or 19% from $17,801, primarily due to a $2.0 million increase in personnel-related expenses [151]. - Research and development expenses rose to $9,868, an increase of $1,240 or 14% from $8,628, driven by higher personnel-related costs [152]. - General and administrative expenses were $13,330, up $1,802 or 16% from $11,528, mainly due to increased personnel-related expenses and professional fees [153]. - Sales and marketing expenses rose to $62,678 thousand for the nine months ended September 30, 2024, a 19% increase from $52,474 thousand in 2023, mainly due to higher personnel-related expenses and demand generation costs [158]. - Research and development expenses increased to $29,471 thousand for the nine months ended September 30, 2024, an 18% rise from $24,907 thousand in 2023, attributed to increased headcount and salary adjustments [160]. - General and administrative expenses were $38,729 thousand for the nine months ended September 30, 2024, up 16% from $33,502 thousand in 2023, primarily due to higher personnel-related expenses [161]. Net Loss and Cash Flow - The company reported a net loss of $5,879 for the three months ended September 30, 2024, compared to a net loss of $7,145 in the same period of 2023 [145]. - The net loss for the nine months ended September 30, 2024, was $21.64 million, compared to a net loss of $23.99 million for the same period in 2023, indicating a reduction in losses [170]. - Free cash flow for the nine months ended September 30, 2024, was $4,239 thousand, compared to $3,596 thousand in the same period of 2023, reflecting improved cash generation [169]. - Cash provided by operating activities for the nine months ended September 30, 2024, was $7.48 million, an increase from $6.48 million in the same period in 2023 [176][177]. Customer Metrics - The dollar-based net retention rate improved to 98% as of September 30, 2024, up from 95% in 2023, reflecting enhanced customer retention and revenue growth [125]. - Approximately 36% of customer locations opted for annual prepayments as of September 30, 2024, down from 40% in 2023, indicating a shift in payment preferences [129]. Product Development and Innovation - The company introduced Weave Enterprise, a solution designed for organizations with multiple locations, to better serve multi-office customers [118]. - The new Weave platform features an AI-powered assistant and a modern user interface, aimed at improving practice operations and customer experience [111]. - The company is expanding its services to additional specialized medical verticals, enhancing its product offerings for dental, optometry, and veterinary practices [110]. - The company aims to continue investing in product development and marketing to enhance customer satisfaction and expand its market presence [119]. Financial Position and Liquidity - As of September 30, 2024, the company had $51.1 million in cash and cash equivalents, along with $47.1 million in other short-term investments, providing a solid liquidity position [172][173]. - The company recorded $40.2 million in deferred revenue as of September 30, 2024, which will be recognized as revenue over the subscription term [174]. - Cash used in financing activities for the nine months ended September 30, 2024, was $16.62 million, primarily due to employee taxes related to restricted stock units [181]. - The company acquired $5.2 million of additional right-of-use assets through new finance lease obligations during the nine months ended September 30, 2024 [183]. - As of September 30, 2024, the company had no outstanding balance on its $50 million credit facility, maintaining compliance with all loan covenants [188]. Future Expectations - The company expects sales and marketing expenses to continue to be the largest operating expense, but as a percentage of revenue, these expenses are anticipated to decrease in 2024 compared to 2023 [137]. - Research and development expenses are expected to increase as the business grows, but will likely remain consistent or slightly decrease as a percentage of revenue over time [139]. - The company expects operating cash flows to improve as it increases operational efficiency and experiences economies of scale [171].