Weave Communications, Inc. (WEAV) Q4 2025 Earnings Call Transcript
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Overview
The earnings call reveals strong revenue growth, improved gross margins, and increased free cash flow, suggesting financial strength. The company is raising its revenue and operating income guidance, indicating confidence in future performance. Expansion in AI and specialty medical verticals, alongside a new CareCredit partnership, further supports growth prospects. Despite some uncertainties in growth rates and product impacts, the overall sentiment is positive due to strategic initiatives and financial improvements.
Key Financial Performance
Revenue Growth (Q4) 17% year-over-year growth, driven by payments and the addition of new locations.
Gross Margin (Q4) 73.3%, representing a year-over-year improvement of 70 basis points. Margin improvement was primarily driven by ongoing efficiencies in cloud infrastructure and amortization of phone hardware and payment terminals.
Operating Income (Q4) $2.3 million, an improvement of over $500,000 compared to Q4 2024. This represents an operating margin of 3.6%, a 30 basis point improvement over the prior year.
Free Cash Flow (Full Year) $12.9 million, which represents 24% year-over-year growth. Growth attributed to disciplined cash generation and operational efficiencies.
Net Revenue Retention Rate (Q4) 93%, reflecting a decrease due to the lapping of a prior price increase and limited upsell opportunities as customers often adopt most of the product suite upfront.
Gross Revenue Retention Rate (Q4) 89%, with improvements in churn due to tailored onboarding, new products, and refined product packaging.
Active Customer Locations (Full Year) 39,625, an increase of 4,628 locations year-over-year, driven by growth in specialty medical verticals and new product adoption.
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Operating Highlights
AI Receptionist: Expanded capabilities with TrueLark acquisition, enabling text-based AI agent for FAQs, scheduling, and rebooking. Plans for omnichannel AI Receptionist in 2026 to handle calls 24/7, automate payments, and streamline workflows.
Unified Inbox: Launched a feature consolidating AI and staff interactions into a single view, improving operational efficiency.
Weave Payments: Grew at twice the rate of total revenue in 2025, with new features like automated payment reminders and bulk collections.
Specialty Medical Vertical: Became the second-largest vertical by location count, focusing on primary care, physical therapy, aesthetics, and medspa. Added more specialty locations in Q4 2025 than any previous quarter.
Dental Market: Endorsed by the American Dental Association, providing access to 160,000 members and reinforcing leadership in the dental market.
Revenue Growth: Achieved 17% year-over-year revenue growth in Q4 2025 and for the full year.
Gross Margin: Expanded to a record 73.3% in Q4 2025, marking consistent improvement over 15 of the past 16 quarters.
Free Cash Flow: Increased by 24% year-over-year to $12.9 million in 2025.
AI Integration: Focused on integrating AI into healthcare workflows, leveraging almost 20 years of expertise and a data moat from 40,000 customer locations.
Market Expansion: Expanded TAM by $7 billion to $22 billion with TrueLark acquisition and AI Receptionist capabilities.
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Risk or Challenges
Administrative Burdens: Healthcare professionals face increasing administrative burdens such as staffing shortages, rising patient demand, and reimbursement complexities. These challenges strain practice revenue and profitability, reduce patient satisfaction, and increase burnout.
Operational Inefficiencies: Missed patient calls, scheduling challenges, and shifting insurance dynamics waste time and reduce operational efficiency, impacting practice revenue and profitability.
Regulatory and Privacy Compliance: Healthcare practices operate within strict privacy, security, and regulatory frameworks, requiring trusted software partners to navigate these complexities. Failure to comply could lead to legal and financial repercussions.
AI Disruption Risks: AI has the potential to disrupt software revenue models, such as seat-based licensing. Practices may reduce headcount, leading to higher dependency on AI solutions but also altering traditional revenue streams.
Customer Retention Challenges: Gross revenue retention rates have been impacted by higher churn in new verticals and single-location practices. Practices acquired by larger groups also pose a risk to customer retention.
Market Penetration Limitations: Despite growth, Weave has limited penetration in key markets like dental and specialty medical, which could constrain future revenue growth.
Integration and Adoption Barriers: Customers in new verticals often face higher churn due to limited or basic integrations with practice management systems, which can hinder adoption and long-term retention.
Economic and Competitive Pressures: Economic uncertainties and competitive pressures in the healthcare technology market could impact Weave's ability to maintain growth and profitability.
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Guidance & Outlook
Revenue Growth for 2026: We expect total revenue to be in the range of $273 million to $276 million for the full year 2026, reflecting continued growth.
Q1 2026 Revenue Guidance: Total revenue is expected to be in the range of $64.2 million to $64.8 million.
Operating Income for 2026: Non-GAAP operating income is expected to improve year-over-year to be in the range of $8 million to $12 million.
Q1 2026 Operating Income: Operating income is expected to be in the range of $1 million to $2 million, with seasonal factors impacting Q1 expenses.
AI Receptionist Rollout: In the first half of 2026, general availability of omnichannel AI Receptionists across all vertical markets is expected. In the second half of 2026, capabilities will expand to include autonomous intake and payments.
Specialty Medical Vertical Growth: Specialty medical is identified as a significant growth opportunity, with penetration currently at roughly 1% and plans to expand market share.
Partnership with CareCredit: The partnership with CareCredit is expected to streamline credit application processes and improve treatment acceptance rates, enhancing customer offerings.
Expansion of Total Addressable Market (TAM): The acquisition of TrueLark expanded TAM by $7 billion to $22 billion, with further expansion expected as AI Receptionist capabilities grow.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you talk more about the CareCredit integration announced this morning?
A:The CareCredit partnership opens up another avenue to capture volumes that would otherwise flow through CareCredit, the largest provider of patient financing solutions. The integration work is ongoing, and more details will be provided in the future. This is part of the payment strategy to make the payment solution more attractive and to attach more volume.
Q:What are your expectations for growth rates across different subverticals in 2026?
A:Management has not broken out growth rates for each vertical but anticipates strong growth across specialty medical, mid-market, and other channels. Specialty medical is expected to be the strongest grower due to added integrations, marketing efforts, and brand presence. Solid growth is expected across all verticals, with specialty medical leading.
Q:How do you think about pricing for AI capabilities and the unified inbox?
A:Pricing is still being worked out, whether as an additional module or included in a bundle. The focus is on monetizing the value delivered, such as labor savings and revenue generation. The licensing model is based on location and consumption, not by seat.
Q:Have churn rates and average sales prices stabilized in newer verticals?
A:Churn rates have decreased and returned to 2023-2024 levels, with improvements seen in specialty medical. These metrics improve over quarters as integrations and brand presence mature, leading to lower churn, lower CAC, and higher ASP over time.
Q:What are your investment and hiring priorities for the coming year?
A:The priorities are product and engineering, focusing on AI Receptionist technology and voice experience. Investments are also being made in go-to-market strategies, transitioning to a more efficient SDR-AE model.
Q:How is Weave differentiating its AI automation capabilities from competitors?
A:Weave's unique differentiators include owning the telephony stack, trusted relationships, and deep industry-specific workflows. The platform consolidates functionality, retains context across interactions, and integrates seamlessly with practice operations, providing a comprehensive and optimized experience.
Q:What comments can you share on growth differences in payments by end market?
A:Payments growth varies by sector based on insurance coverage and practice economics. For example, sectors like aesthetics and veterinary have less insurance coverage, offering more payments opportunities compared to primary care. The go-to-market strategy aligns with these sector-specific opportunities.
Q:How additive are newer products like TrueLark to NRR growth in 2026?
A:The growth from AI Receptionist and other products is expected to be more significant in the second half of the year. While there is a strong upsell opportunity, the impact on net revenue retention is still being evaluated as customers often adopt heavily upon new product launches.
Q:Review of Unclear Management Responses
A:Management avoided providing specific growth rates for subverticals in 2026, stating they anticipate strong growth but did not break out the details. Similarly, they did not provide detailed projections for the impact of newer products like TrueLark on net revenue retention, citing the need for more sales experience to evaluate the dynamics.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI Receptionist
AI agent
AI provider
Brett
Conference
Full Financial
Health care
TAM Weave
Weave Full
Weave role
agent staff
application
billing insurance
building
care practice
care professional
complexity
continuity
conversation Weave
cost
creation Weave
health care
owner
patient care
platform capability
practice AI
practice staff
request
seat
share wallet
specialty location
staff interaction
system work
text AI
value creation
value market
workflow Weave
WEAV Transcript
Weave Communications, Inc. (WEAV) Q4 2025 Earnings Call Transcript
Positive2-20
The earnings call reveals strong revenue growth, improved gross margins, and increased free cash flow, suggesting financial strength. The company is raising its revenue and operating income guidance, indicating confidence in future performance. Expansion in AI and specialty medical verticals, alongside a new CareCredit partnership, further supports growth prospects. Despite some uncertainties in growth rates and product impacts, the overall sentiment is positive due to strategic initiatives and financial improvements.
Weave Communications, Inc. (WEAV) Q3 2025 Earnings Call Transcript
Positive10-30
The earnings call highlights strong financial performance, strategic growth through AI and partnerships, and optimistic guidance. While there are concerns about unclear management responses on payment adoption and future investments, the overall sentiment remains positive due to expected revenue growth, profitability improvements, and strategic initiatives. The market strategy and shareholder return plan are well-received, with plans for increased leverage and focus on high-potential verticals. Despite some uncertainties, the positive outlook on growth and profitability, along with strategic developments, suggests a positive stock price movement.
Weave Communications, Inc. (WEAV) Q2 2025 Earnings Call Transcript
Positive8-1
The earnings call highlights strong growth in specialty medical, successful integration of TrueLark, and positive customer feedback. The company's strategic investments in R&D and sales/marketing, along with raised revenue guidance, indicate a positive outlook. While there are some uncertainties regarding AI adoption and macroeconomic impacts, overall, the sentiment is positive due to strong demand, growth opportunities, and strategic plans. The Q&A section reinforces confidence in the company's direction, with analysts showing interest in growth strategies and integration progress.
Weave Communications, Inc. (NYSE:WEAV) Q1 2025 Earnings Call Transcript
Positive5-7
The earnings call reveals strong financial performance with 18.3% revenue growth and improved gross margins. The acquisition of TrueLark is seen as a strategic complement, enhancing offerings and driving revenue. Despite increased expenses, operational efficiencies are evident with improved EBITDA. The Q&A section highlights resilience in market demand and competitive advantages. However, regulatory and operational risks are noted. Overall, the positive financial results, strategic acquisition, and market resilience suggest a positive stock price movement.
WEAV Slides
WEAV Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
