Weave munications(WEAV) - 2025 Q2 - Quarterly Results

Executive Summary & Business Update This section provides an overview of Weave's strong Q2 2025 financial performance, recent business achievements, and future financial projections Q2 2025 Financial Highlights Weave reported strong Q2 2025 financial results, including a 15.6% revenue increase and a positive shift in Non-GAAP operating income and net income Q2 2025 Financial Performance | Metric | Q2 2025 | Q2 2024 | Y-o-Y Change | Notes | | :--------------------------------- | :------------- | :------------- | :------- | :--- | | Total Revenue | $58.5 Million USD | $50.6 Million USD | +15.6% | | | GAAP Gross Margin | 71.7% | 71.4% | +30 bps | | | Non-GAAP Gross Margin | 72.3% | 71.9% | +40 bps | | | GAAP Operating Loss | $10.2 Million USD | $9.3 Million USD | -9.7% | Loss Widened | | Non-GAAP Operating Income (Loss) | $0.1 Million USD | ($1.0) Million USD | Turned Profitable | | | GAAP Net Loss | $8.7 Million USD | $8.6 Million USD | -1.2% | Loss Slightly Increased | | GAAP Net Loss Per Share | $0.11 | $0.12 | +$0.01 | Loss Narrowed | | Non-GAAP Net Income (Loss) | $1.5 Million USD | ($0.3) Million USD | Turned Profitable | | | Non-GAAP Net Income (Loss) Per Share | $0.02 | $0.00 | +$0.02 | | | Adjusted EBITDA | $1.1 Million USD | $0.0 Million USD | Turned Profitable | | | Gross Revenue Retention Rate | 90% | 92% | -2% | | | Net Revenue Retention Rate | 96% | 97% | -1% | | | Net Cash Flow from Operating Activities (YTD) | $5.2 Million USD | $3.0 Million USD | +73.3% | | | Free Cash Flow (YTD) | $3.4 Million USD | $0.7 Million USD | +385.7% | | - The company completed the acquisition of TrueLark, accelerating AI-driven front office automation[5] Recent Business Highlights Weave achieved several business milestones in Q2, including a strategic AI platform acquisition, significant growth in specialty medical, new integrations, key talent promotion, and continued market recognition - The acquisition of TrueLark, an AI-powered workflow automation platform, expands Weave's leadership in agent AI for SMB healthcare through 24/7 patient interaction, automated scheduling, and client communication[3][11] - Specialty Medical became Weave's second-largest and fastest-growing customer vertical, driven by recent integrations with electronic health record providers[3][11] - Launched authorized integrations with Ortho2 Edge (orthodontic practice management system) and IDEXX Neo (veterinary clinic cloud platform), expanding market reach[11] - Abhi Sharma was promoted to Chief Technology Officer (CTO) to drive the company's next phase of AI innovation[11] - Weave ranked first in 34 categories in the G2 Summer 2025 Report and maintained the highest rating in the Patient Relationship Management grid[11] Financial Outlook The company provided Q3 and full-year 2025 financial guidance, projecting continued growth in revenue and Non-GAAP operating income Q3 and Full-Year 2025 Financial Guidance | Metric | Q3 2025 (Forecast) | Full-Year 2025 (Forecast) | | :----------------------- | :-------------------- | :------------------ | | Total Revenue | $60.1 - $61.1 Million USD | $236.8 - $239.8 Million USD | | Non-GAAP Operating Income | $0.0 - $1.0 Million USD | $1.2 - $3.2 Million USD | | Weighted Average Shares Outstanding | 77.4 Million Shares | 76.5 Million Shares | - Non-GAAP operating income guidance excludes items such as stock-based compensation, acquisition-related transaction costs, and acquisition-related intangible asset amortization[10] Company Overview Weave is a leading customer experience and payments software platform for SMB healthcare, aiming to enhance patient engagement and practice profitability About Weave Weave is a leading all-in-one customer experience and payments software platform, focused on serving small and medium-sized healthcare businesses by connecting various patient journey touchpoints to drive growth and profitability - Weave provides an all-in-one customer experience and payments software platform for small and medium-sized healthcare businesses[13] - Its solutions optimize the entire patient journey from initial call to final bill, enhancing practice profitability by simplifying payment processes and reducing accounts receivable[13] - The company has been recognized as an Inc. Power Partner, a G2 Patient Relationship Management Software Leader, and a Top 50 Product for Small Business[13] Webcast Information The company will host an analyst and investor conference call and webcast on July 31, 2025, to discuss detailed financial results - The conference call and webcast will be held on July 31, 2025, at 4:30 PM ET[12] - Investors can access the live broadcast and replay by dialing in or visiting Weave's investor relations website[12] Non-GAAP Financial Measures This section defines and reconciles various Non-GAAP financial metrics used by Weave to assess operational performance and provide additional insights for investors Introduction to Non-GAAP Measures Weave provides several Non-GAAP financial metrics for internal analysis and operational performance evaluation, offering investors additional tools to understand company results, while emphasizing these should not be used in isolation or as GAAP substitutes - The company discloses Non-GAAP net income (loss), Non-GAAP net income (loss) margin, Non-GAAP net income (loss) per share, Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP operating expenses, Non-GAAP income (loss) from operations, Non-GAAP income (loss) from operations margin, Adjusted EBITDA, and Free Cash Flow[14] - These Non-GAAP metrics are used for internal analysis and evaluating ongoing operational performance, providing investors with additional tools, but are not substitutes for GAAP results[14] Non-GAAP Net Income (Loss) Definition Non-GAAP net income (loss) is defined as GAAP net loss adjusted to exclude stock-based compensation, acquisition-related transaction costs, and acquisition-related intangible asset amortization - Non-GAAP net income (loss) is defined as GAAP net loss, adjusted to exclude stock-based compensation expense, acquisition-related transaction costs, and acquisition-related intangible asset amortization[15] - Acquisition-related transaction costs include legal and accounting professional service fees incurred for current period acquisitions[15] Non-GAAP Gross Profit and Gross Margin Definition Non-GAAP gross profit is defined as GAAP gross profit adjusted to exclude stock-based compensation and acquisition-related intangible asset amortization - Non-GAAP gross profit is defined as GAAP gross profit, adjusted to exclude stock-based compensation expense and acquisition-related intangible asset amortization[16] Non-GAAP Operating Expenses Definition Non-GAAP operating expenses are defined as applicable GAAP operating expenses adjusted to exclude stock-based compensation, acquisition-related transaction costs, and acquisition-related intangible asset amortization - Non-GAAP operating expenses are defined as applicable GAAP operating expenses, adjusted to exclude stock-based compensation expense, acquisition-related transaction costs, and acquisition-related intangible asset amortization[17] Non-GAAP Income (Loss) from Operations Definition Non-GAAP income (loss) from operations is defined as GAAP operating loss adjusted to exclude stock-based compensation, acquisition-related transaction costs, and acquisition-related intangible asset amortization - Non-GAAP income (loss) from operations is defined as GAAP operating loss, adjusted to exclude stock-based compensation expense, acquisition-related transaction costs, and acquisition-related intangible asset amortization[18] Adjusted EBITDA Definition Adjusted EBITDA is EBITDA further adjusted to exclude stock-based compensation, acquisition-related transaction costs, and acquisition-related intangible asset amortization, providing consistency and comparability with past financial performance - EBITDA is defined as earnings before interest expense, interest income, other income/expense, income tax benefit (expense), depreciation, and amortization[19] - Adjusted EBITDA further excludes stock-based compensation expense, acquisition-related transaction costs, and acquisition-related intangible asset amortization[19] - Management uses Adjusted EBITDA to measure financial and operational performance and for budget preparation[19] Free Cash Flow Definition Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment and capitalized internal-use software costs, serving as a useful liquidity measure - Free cash flow is defined as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software costs[20] - This metric provides information on the amount of cash consumed by the company's operating and investing activities, serving as a useful liquidity measure[20] Limitations of Non-GAAP Measures Non-GAAP financial metrics have limitations, may differ from other companies' calculations, and free cash flow does not reflect future contractual commitments, while Adjusted EBITDA excludes non-cash impacts like stock-based compensation - Non-GAAP financial information may differ from other companies' calculations and may not be directly comparable[21] - Free cash flow does not reflect future contractual commitments or the total increase or decrease in cash balances[21] - Adjusted EBITDA excludes non-cash stock-based compensation and other costs, not reflecting these non-cash impacts or future working capital needs[21] Supplemental Financial Information This section provides definitions for key revenue retention metrics, including Dollar-Based Net Revenue Retention (NRR) and Gross Revenue Retention (GRR) Dollar-Based Net Revenue Retention ("NRR") Definition Dollar-Based Net Revenue Retention (NRR) measures revenue growth from the existing customer base over a specific period, including subscription and payment processing revenue, accounting for churn, expansion, and contraction - NRR is calculated by dividing the Adjusted Monthly Revenue (AMR) of active customers in the baseline month by their AMR in the same month of the following year[23] - AMR includes monthly subscription revenue and the average of recurring payment processing revenue over the past three months[23] Dollar-Based Gross Revenue Retention ("GRR") Definition Dollar-Based Gross Revenue Retention (GRR) measures revenue reduction from the existing customer base due to subscription terminations, excluding the impact of revenue expansion, contraction, or new customers - GRR is calculated by dividing the AMR of subscription customers in the baseline month who remain subscribed twelve months later by their AMR in the baseline month[24] - GRR reflects the impact of customer subscription terminations, excluding the effects of revenue expansion, contraction, or new customer additions[24] Forward-Looking Statements & Corporate Information This section addresses forward-looking statements, outlines official information disclosure channels, and provides contact details for investor and media inquiries Forward-Looking Statements This press release contains forward-looking statements regarding future performance, the anticipated benefits of the TrueLark acquisition, and management's projections, which are subject to risks and uncertainties that could cause actual results to differ materially - Forward-looking statements include current estimates for Q3 2025 revenue and Non-GAAP operating income, as well as the anticipated benefits of the TrueLark acquisition[25] - These statements involve risks and uncertainties, including acquisition integration, customer acquisition and retention, economic conditions, competition, and service disruptions, which could cause actual results to differ materially from expectations[26] - The company undertakes no obligation to update forward-looking statements to reflect future events or circumstances[27] Channels for Disclosure of Information Weave fulfills its information disclosure obligations through various channels, encouraging investors, media, and other stakeholders to monitor these channels for company information - Weave uses its investor relations website, blog, press releases, public conference calls, webcasts, X (Twitter) feed, Facebook page, and LinkedIn page as Regulation FD compliant channels for information disclosure[28] Investor & Media Contacts Contact information for the Head of Investor Relations and Senior Director of Content & Communications is provided for relevant inquiries - Investor Relations Contact: Mark McReynolds, Email: ir@getweave.com[29] - Media Contact: Natalie House, Email: pr@getweave.com[29] Condensed Consolidated Financial Statements This section presents Weave's condensed consolidated balance sheets, statements of operations, and cash flows, along with disaggregated revenue and GAAP to Non-GAAP reconciliations Condensed Consolidated Balance Sheets As of June 30, 2025, Weave's total assets and liabilities both increased, with significant rises in intangible assets and goodwill reflecting the TrueLark acquisition Condensed Consolidated Balance Sheets (Thousand USD) | Metric (Thousand USD) | June 30, 2025 | December 31, 2024 | Change Amount | Change Rate | | :--------------------- | :------------- | :------------- | :----- | :----- | | Total Assets | 204,344 | 188,926 | +15,418 | +8.16% | | Total Liabilities | 125,467 | 121,958 | +3,509 | +2.88% | | Total Stockholders' Equity | 78,877 | 66,968 | +11,909 | +17.78% | | Cash and Cash Equivalents | 44,665 | 51,596 | -6,931 | -13.43% | | Intangible Assets, Net | 7,844 | — | +7,844 | N/A | | Goodwill | 29,313 | — | +29,313 | N/A | - The significant increase in intangible assets and goodwill is primarily attributable to the acquisition of TrueLark[31] Condensed Consolidated Statements of Operations In Q2 2025, Weave's revenue and gross profit grew, but operating and net losses slightly widened year-over-year, despite a narrowing of net loss per share Condensed Consolidated Statements of Operations (Thousand USD) | Metric (Thousand USD) | Q2 2025 | Q2 2024 | Y-o-Y Change | Y-o-Y Change Rate | | :--------------------- | :------------- | :------------- | :------- | :--------- | | Revenue | 58,470 | 50,586 | +7,884 | +15.6% | | Cost of Revenue | 16,519 | 14,462 | +2,057 | +14.2% | | Gross Profit | 41,951 | 36,124 | +5,827 | +16.1% | | Operating Expenses | 52,137 | 45,379 | +6,758 | +14.9% | | Operating Loss | (10,186) | (9,255) | -931 | -10.1% | | Net Loss | (8,711) | (8,553) | -158 | -1.8% | | Net Loss Per Share | (0.11) | (0.12) | +0.01 | +8.3% | | Weighted Average Common Shares | 75,842,852 | 71,291,801 | +4,551,051 | +6.4% | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, cash flow from operating activities significantly increased, but investing activities saw a substantial outflow due to business acquisitions, resulting in a net decrease in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (Thousand USD) | Metric (Thousand USD) | Six Months 2025 | Six Months 2024 | Change Amount | Change Rate | | :--------------------------- | :------------- | :------------- | :----- | :----- | | Net Cash Flow from Operating Activities | 5,226 | 2,975 | +2,251 | +75.7% | | Net Cash Flow from Investing Activities | (10,127) | 9,515 | -19,642 | -206.4% | | Net Cash Flow from Financing Activities | (2,030) | (11,587) | +9,557 | +82.5% | | Net Increase (Decrease) in Cash and Cash Equivalents | (6,931) | 903 | -7,834 | -867.6% | | Business Acquisitions, Net of Cash Acquired | (23,318) | — | -23,318 | N/A | | Equity Issued as Business Combination Consideration | 10,041 | — | +10,041 | N/A | - The substantial increase in cash outflow from investing activities was primarily due to business acquisitions, including a net cash outflow of $23,318 thousand for the TrueLark acquisition and the issuance of $10,041 thousand in equity as consideration[36] Disaggregated Revenue and Cost of Revenue In Q2 2025, subscription and payment processing revenue continued to grow with stable gross margins, while Phone Hardware gross margin significantly improved despite a decline in Onboarding revenue and negative gross margin Disaggregated Revenue and Cost of Revenue (Thousand USD) | Business Category (Thousand USD) | Q2 2025 Revenue | Q2 2024 Revenue | Y-o-Y Change Rate | Q2 2025 Gross Margin | Q2 2024 Gross Margin | Gross Margin Change | | :--------------------- | :----------------- | :----------------- | :--------- | :------------------- | :------------------- | :--------- | | Subscription and Payment Processing | 56,005 | 48,513 | +15.4% | 77.5% | 78.0% | -0.5% | | Onboarding | 833 | 943 | -11.6% | (149.1)% | (115.5)% | -33.6% | | Phone Hardware | 1,632 | 1,130 | +44.4% | (13.6)% | (53.5)% | +39.9% | - Subscription and payment processing is the primary revenue source, maintaining robust growth[38] - Phone Hardware business gross margin significantly improved from -53.5% in Q2 2024 to -13.6% in Q2 2025[38] Reconciliation of GAAP to Non-GAAP Financial Measures This section provides detailed reconciliations between GAAP and Non-GAAP financial metrics, illustrating the impact of adjustments such as stock-based compensation, acquisition-related transaction costs, and acquisition-related intangible asset amortization Non-GAAP Gross Profit Reconciliation This table reconciles GAAP gross profit to Non-GAAP gross profit by adding back stock-based compensation and acquisition-related intangible asset amortization | Metric (Thousand USD) | Q2 2025 | Q2 2024 | | :------------------------- | :------------- | :------------- | | GAAP Gross Profit | 41,951 | 36,124 | | Stock-Based Compensation Expense Add-back | 215 | 244 | | Acquisition-Related Intangible Asset Amortization | 105 | — | | Non-GAAP Gross Profit | 42,271 | 36,368 | | GAAP Gross Margin | 71.7% | 71.4% | | Non-GAAP Gross Margin | 72.3% | 71.9% | Non-GAAP Operating Expenses Reconciliation This table reconciles GAAP operating expenses to Non-GAAP operating expenses by adjusting for specific non-cash and acquisition-related items | Operating Expense Category (Thousand USD) | Q2 2025 GAAP | Q2 2025 Non-GAAP | | :--------------------- | :----------------- | :------------------- | | Sales and Marketing | 25,245 | 23,243 | | Research and Development | 11,988 | 8,877 | | General and Administrative | 14,904 | 10,081 | - Non-GAAP operating expenses are adjusted by excluding stock-based compensation expense, acquisition-related transaction costs, and acquisition-related intangible asset amortization[43] Non-GAAP Income (Loss) from Operations Reconciliation This table reconciles GAAP operating loss to Non-GAAP income (loss) from operations by adding back stock-based compensation, acquisition costs, and intangible asset amortization | Metric (Thousand USD) | Q2 2025 | Q2 2024 | | :----------------------------- | :------------- | :------------- | | Operating Loss (GAAP) | (10,186) | (9,255) | | Stock-Based Compensation Expense Add-back | 9,253 | 8,291 | | Acquisition-Related Transaction Costs | 847 | — | | Acquisition-Related Intangible Asset Amortization | 156 | — | | Non-GAAP Income (Loss) from Operations | 70 | (964) | | GAAP Operating Loss Margin | (17.4)% | (18.3)% | | Non-GAAP Income (Loss) from Operations Margin | 0.1% | (1.9)% | Non-GAAP Net Income (Loss) Reconciliation This table reconciles GAAP net loss to Non-GAAP net income (loss) by adding back stock-based compensation, acquisition costs, and intangible asset amortization | Metric (Thousand USD) | Q2 2025 | Q2 2024 | | :----------------------------- | :------------- | :------------- | | Net Loss (GAAP) | (8,711) | (8,553) | | Stock-Based Compensation Expense Add-back | 9,253 | 8,291 | | Acquisition-Related Transaction Costs | 847 | — | | Acquisition-Related Intangible Asset Amortization | 156 | — | | Non-GAAP Net Income (Loss) | 1,545 | (262) | | GAAP Net Loss Margin | (14.9)% | (16.9)% | | Non-GAAP Net Income (Loss) Margin | 2.6% | (0.5)% | | Non-GAAP Net Income (Loss) Per Share | 0.02 | — | Free Cash Flow Reconciliation This table reconciles net cash flow from operating activities to free cash flow by deducting capital expenditures and capitalized internal-use software costs | Metric (Thousand USD) | Q2 2025 | Q2 2024 | | :------------------------- | :------------- | :------------- | | Net Cash Flow from Operating Activities | 5,445 | 22,676 | | Less: Purchases of Property and Equipment | (544) | (741) | | Less: Capitalized Internal-Use Software Costs | (423) | (718) | | Free Cash Flow | 4,478 | 21,217 | Adjusted EBITDA Reconciliation This table reconciles net loss to Adjusted EBITDA by adding back interest, taxes, depreciation, amortization, stock-based compensation, and acquisition-related costs | Metric (Thousand USD) | Q2 2025 | Q2 2024 | | :----------------------------- | :------------- | :------------- | | Net Loss | (8,711) | (8,553) | | Interest Expense | 537 | 399 | | Income Tax Benefit (Expense) | (1,106) | 52 | | Interest Income | (435) | (432) | | Other Income, Net | (471) | (721) | | Depreciation | 520 | 581 | | Amortization | 469 | 388 | | Stock-Based Compensation Expense | 9,253 | 8,291 | | Acquisition-Related Intangible Asset Amortization | 156 | — | | Acquisition-Related Transaction Costs | 847 | — | | Adjusted EBITDA | 1,059 | 5 |