Weave munications(WEAV) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited Q1 2025 financials show 18% revenue growth to $55.8 million, a net loss of $8.8 million, and significantly improved operating cash flow Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows total assets of $188.3 million and stockholders' equity of $68.6 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $53,410 | $51,596 | | Short-term investments | $44,819 | $47,534 | | Total current assets | $120,258 | $120,739 | | TOTAL ASSETS | $188,310 | $188,926 | | Liabilities & Equity | | | | Deferred revenue | $38,864 | $39,987 | | Total current liabilities | $75,169 | $76,620 | | Total liabilities | $119,729 | $121,958 | | Total stockholders' equity | $68,581 | $66,968 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $188,310 | $188,926 | Condensed Consolidated Statements of Operations and Comprehensive Loss Q1 2025 operations show 18.3% revenue growth to $55.8 million, improved gross margin to 71.6%, and a net loss of $8.8 million Q1 2025 Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $55,809 | $47,173 | | Gross Profit | $39,945 | $32,987 | | Loss from operations | $(9,320) | $(8,155) | | Net loss | $(8,825) | $(7,203) | | Net loss per share - basic and diluted | $(0.12) | $(0.10) | Condensed Consolidated Statements of Cash Flows Q1 2025 cash flow from operations significantly improved to a use of $0.2 million, with cash and equivalents increasing by $1.8 million Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(219) | $(19,701) | | Net cash provided by investing activities | $2,258 | $6,131 | | Net cash used in financing activities | $(225) | $(6,577) | | Net increase (decrease) in cash | $1,814 | $(20,147) | Notes to the Condensed Consolidated Financial Statements Notes detail accounting policies, revenue disaggregation, single segment operations, and the subsequent $35.0 million TrueLark acquisition - The company operates as a single reportable segment, providing communications and payment services via its Weave platform in North America[79] Disaggregation of Revenue (in thousands) | Revenue Source | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Subscription and payment processing | $53,415 | $45,092 | | Onboarding | $888 | $960 | | Phone Hardware (embedded lease) | $1,506 | $1,121 | | Total revenue | $55,809 | $47,173 | - On May 4, 2025, the company entered into an agreement to acquire TrueLark for $35.0 million, consisting of $25.0 million in cash and $10.0 million in stock[83] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses 18% revenue growth, improved gross margin, key retention rates, the TrueLark acquisition, and enhanced free cash flow - Weave is an all-in-one customer experience and payments software platform for small and medium-sized healthcare businesses, integrating communications, patient engagement, and payment tools[86] - On May 4, 2025, the company agreed to acquire TrueLark, an AI-powered receptionist and front-desk automation platform, for $35.0 million ($25.0M cash, $10.0M stock)[88] Key Business Metrics | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Dollar-based net retention rate | 98% | 96% | | Dollar-based gross retention rate | 91% | 92% | Non-GAAP Financial Measures (in thousands) | Measure | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Free cash flow | $(1,062) | $(20,519) | | Free cash flow margin | (2)% | (43)% | | Adjusted EBITDA | $1,020 | $(358) | - The company's liquidity as of March 31, 2025, consisted of $53.4 million in cash and cash equivalents and $44.8 million in short-term investments[146][148] Management believes this is sufficient to meet working capital needs for at least the next 12 months Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure, including interest and foreign currency rates, remains materially unchanged from year-end 2024 - As of March 31, 2025, the company's exposure to market risk has not changed materially since December 31, 2024[163] Controls and Procedures Management concluded that disclosure controls were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[165] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[166] PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business - The company is not presently a party to any legal proceedings that would individually or in aggregate have a material adverse effect on its business[169] Risk Factors Key risks include historical losses, customer retention, third-party reliance, regulatory compliance, cybersecurity, and AI technology challenges - The company has a history of net losses, including $8.8 million for Q1 2025, and may not achieve or sustain profitability in the future[189] - Business success is highly dependent on attracting new customers, retaining existing ones, and increasing their use of the platform, particularly among small and medium-sized healthcare businesses which are susceptible to economic downturns[179][185] - The company relies on a single supplier, Stripe, for its Weave Payments solution and substantially relies on Google Cloud Platform (GCP) to operate its platform, making it vulnerable to service interruptions from these providers[235][245] - The business is subject to extensive regulation, including FCC rules for VoIP services, TCPA for communications, and HIPAA for protecting health information, with non-compliance posing risks of fines and liability[287][297][311] - The use of AI in the platform may not produce desired benefits and could result in increased liability, reputational harm, or other adverse consequences due to potential inaccuracies, bias, or infringement issues[250] Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q1 2025 - During the fiscal quarter ended March 31, 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement[378] Exhibits This section lists filed exhibits, including executive employment agreements, CEO/CFO certifications, and Inline XBRL financial data files - Filed exhibits include employment agreements for executives, CEO/CFO certifications (Rule 13a-14(a) and Section 1350), and financial statements in Inline XBRL format[379]