Weave munications(US:WEAV)2025-11-06 21:16Revenue and Growth - Recurring revenues accounted for 91% of total revenue for the three months ended September 30, 2025, and 92% for the same period in 2024[118] - Subscription and payment processing revenue for Q3 2025 was $58.76 million, up from $50.38 million in Q3 2024, representing a year-over-year increase of 25%[121] - Revenue for the three months ended September 30, 2025, was $61,342,000, representing a 17% increase from $52,386,000 in the same period of 2024[158] - Revenue for the nine months ended September 30, 2025, increased by $25.5 million, or 17%, to $175.6 million, with approximately $19.8 million attributed to new customer locations acquired[166] - Revenue for the three months ended September 30, 2025, was $61.3 million, a 17% increase from $52.4 million in the same period of 2024[181] Profitability and Margins - Gross profit for subscription and payment processing services was $45.86 million for Q3 2025, maintaining a gross margin of 78%[121] - Gross profit for the three months ended September 30, 2025, was $44,342,000, compared to $37,727,000 in 2024, maintaining a gross margin of 72%[154] - Gross margin improved to 72% for the nine months ended September 30, 2025, compared to 71% in the prior year, driven by a favorable customer mix and efficiencies in cost management[168] - The free cash flow margin for the three months ended September 30, 2025, was 8%, compared to 7% in the same period of 2024[181] Expenses and Losses - Operating expenses are expected to continue increasing, with sales and marketing being the largest component[139] - Total operating expenses for the three months ended September 30, 2025, were $53,286,000, compared to $44,357,000 in 2024, resulting in a loss from operations of $8,944,000[154] - Research and development expenses for the three months ended September 30, 2025, were $13,121,000, up from $9,868,000 in 2024, reflecting a 33% increase[154] - Sales and marketing expenses increased by 25% to $26,404,000 for the three months ended September 30, 2025, compared to $21,159,000 in 2024[161] - The net loss for the nine months ended September 30, 2025, was $26,204,000, compared to a net loss of $21,635,000 in the same period of 2024[154] - The company reported a net loss of $26.2 million for the nine months ended September 30, 2025, compared to a net loss of $21.6 million in the same period of 2024[182] Cash Flow and Financial Position - Free cash flow for the nine months ended September 30, 2025, was $8.5 million, compared to $4.2 million in the prior year, reflecting improved cash generation from operating activities[176] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $11.3 million, up from $7.5 million in 2024, representing a 51% increase[186] - Cash used in financing activities for the nine months ended September 30, 2025, was $4.2 million, significantly lower than $16.6 million used in the same period of 2024[192] - As of September 30, 2025, the company had cash and cash equivalents of $64.4 million, along with $15.9 million in other short-term investments[185] - The company has a total borrowing capacity of $50.0 million under its revolving line of credit, with no outstanding balance as of September 30, 2025[195] Customer Metrics and Retention - Customer retention is expected to improve gross margin, with subscription and payment processing gross margin consistently at 78% for the three months ended September 30, 2025, and 2024[128] - The dollar-based net revenue retention rate decreased to 94% in September 2025 from 98% in September 2024[151] - The dollar-based gross revenue retention rate decreased to 90% in September 2025 from 92% in September 2024[151] Strategic Initiatives - The company introduced the enhanced Weave platform in 2024, which is web-based and designed for both single- and multi-location customers[124] - The acquisition of TrueLark provides an opportunity to expand the customer base among medium-sized businesses, particularly in specialty healthcare verticals[126] - The company aims to add new customers through both unpaid channels, such as recommendations, and paid channels, including digital marketing and trade shows[123] - The company plans to expand into new industry verticals, having successfully entered dental, optometry, and veterinary markets[130] Other Income and Expenses - Interest income for the three months ended September 30, 2025, was $447,000, down from $520,000 in 2024[154] - Total other income (expense), net decreased by $449,000, or 56%, to $358,000 for the three months ended September 30, 2025, largely due to decreased realized gains on short-term investments[165]