Q4 2025 Weave Communications Inc Earnings Call [BACKUP]

February 19, 2026

Brett White: The specialty medical vertical continues to stand out as one of our most attractive growth opportunities. This space grew to become our second-largest vertical by location count in Q2 of 2025. That momentum continued, and we added more specialty medical locations in Q4 than in any quarter in our history. Specialty medical comprises 29 specialties, and we currently focused on just four: primary care, physical and occupational therapy, aesthetics, and med spa. Next, Weave Payments grew at more than twice the rate of total revenue in 2025, with strong early adoption of new capabilities like automated payment reminders, bulk collections, and surcharging. Today, we announced a partnership agreement with CareCredit, the leading patient financing solution used by over 285,000 health and wellness locations nationwide.

Brett White: This integration is expected to give Weave customers greater visibility into available patient credit, streamline the credit application process, and improve treatment acceptance rates by making care more accessible. In conclusion, we've delivered consistent revenue growth, expanded margins and free cash flow while continuing to invest in innovation. Just as importantly, the customer successes we see today give us confidence that this value creation is repeatable and sustainable. Weave is defining the intelligent healthcare front office. We're building a durable, scalable business that delivers on our commitments, and we are excited about the long-term value we can create for both our customers and our shareholders. Both myself and the Weave management team entered 2026 very excited about not only the opportunity ahead of us, but also our very unique position to capitalize on the opportunities and deliver additional value to our markets.

Brett White: I want to thank our customers, partners, team members, and shareholders for your continued trust in Weave. The progress we've made gives us strong confidence in the path ahead. With that, I'll turn the call over to Jason for a deeper discussion of our financial performance.

Jason Christiansen: Thanks, Brett, and good afternoon, everyone. It was another solid quarter and a strong finish to the year for Weave, reflecting continued momentum in our growth initiatives and disciplined execution across the business. The growth in our product suite this year, including the acquisition of TrueLark, expanded our estimated total addressable market by roughly $7 billion to an estimated $22 billion. We believe there is further TAM expansion on the horizon as we add capabilities to our AI receptionist. Across our established verticals, we see a meaningful runway for continued growth. In dental, our initial market, we are in fewer than 15% of US locations, highlighting the depth of opportunity still ahead.

Jason Christiansen: For example, Weave has recently been selected and endorsed by the American Dental Association as its exclusive patient engagement solution, giving us co-marketing access to their 160,000 members and reinforcing our leadership position in the dental market. Specialty medical is our largest and newest US market opportunity, and we remain in the early stages of penetration with roughly 1% share. We see a clear path to building a significantly larger business with our growing suite of AI-powered solutions, expanding market share, and increasing average revenue per location. Moving to our financial results. Starting with the Q4, we produced $63.4 million in total revenue, which represents 17% year-over-year growth, driven by payments and the addition of new locations. Gross margin for the quarter was 73.3%, representing a year-over-year improvement of 70 basis points.

Jason Christiansen: We have delivered sequential gross margin expansion in 15 of the past 16 quarters, including a 30 basis point sequential improvement in Q4. Margin improvement was primarily driven by ongoing efficiencies in our cloud infrastructure and amortization of phone hardware and payment terminals, as devices older than three years become fully amortized. We also continue to benefit from the growing contribution of higher-margin payments revenue. Total operating expenses for Q4 were 70% of revenue. General and administrative expenses were $9.6 million and provided the most year-over-year operating leverage improvement in our business. General and administrative expenses improved to 15% of revenue from 17% in Q4 2024, a decrease of over 200 basis points. Research and development expenses were $8.9 million, or 14% of revenue, which represents a decrease from 15% in Q4 2024.

Jason Christiansen: Sales and marketing expenses totaled $25.6 million, or 40% of revenue. As discussed in previous earnings calls, we made a number of targeted investments in 2025. We added sales capacity in mid-market. We grew our upsell team to increase product attach rates, including payments through a new dedicated payment sales team, and we built out a channel sales team that focuses exclusively on selling through commercial partnerships. We also increased our marketing program spend to increase brand awareness and demand in the specialty medical vertical and in promoting our AI Receptionist and new products. Mid-market and specialty medical sales accelerated in 2025, and we finished the year with strong sales performance... and a healthy pipeline to start 2026 behind these investments.

Jason Christiansen: We continue to optimize our sales and marketing efforts and anticipate some improvements in sales and marketing efficiency in the second half of 2026. Operating income for the quarter was $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, and a 90 basis point improvement sequentially. Turning to the balance sheet and cash flow, we continue to see strong liquidity and free cash flow. We ended the quarter with $81.7 million in cash and short-term investments, an increase of $1.4 million sequentially. Cash provided by operating activities in Q4 was $6.2 million, and free cash flow was $4.4 million.

Jason Christiansen: Free cash flow for the full year was $12.9 million, which represents 24% year-over-year growth. Our net revenue retention rate in Q4 was 93%. Our gross revenue retention rate was 89% and remains very strong for companies serving SMB customers. As a reminder, our reported retention rates are a weighted average of the previous 12 months retention rates. As such, it can take several quarters for the progress we are currently making to show through our reported retention metrics. I will provide additional one-time metrics in this year-end recap, which we believe may be helpful in understanding 2025 retention rate trends.

Jason Christiansen: First, when looking at gross retention, we implemented a number of initiatives in 2025 that improved the customer experience, including more tailored onboarding, new products, and refined product packaging, which, along with greater integration coverage and depth across all verticals, helps ensure customers receive the value they expect. These efforts yielded a steady reduction in churn in the second half of 2025, and Q4 churn returned to our 2023 and 2024 churn levels. We expect gross revenue retention rates to trend back to historical ranges of 91% to 93% over time. Previously, we highlighted how integrations with practice management systems affect churn. Customers who purchase Weave products that are not yet integrated with practice management systems or that have basic read-only integrations, typically have higher initial churn rates.

Jason Christiansen: New verticals like specialty medical typically start with higher churn rates, which improve over time as we increase the number and depth of practice management integrations. Additionally, we have seen the ongoing trend of single locations being acquired by larger groups. While we may lose single locations to multi-location groups through acquisition, our investments in mid-market and AI, combined with high customer satisfaction rates, position us to potentially win those businesses back as part of a larger deal. Transitioning to net revenue retention rates, we discussed previously that our net revenue retention rate in the first half of 2025 was bolstered by the effects of a price increase in 2024, which accounted for approximately 250 basis points of uplift. We lapped the effect of that price increase in the first half, and our net revenue retention rate has subsequently decreased accordingly.

Jason Christiansen: It's also important to note that our reported retention metrics are measured on a location basis, not on a customer or logo basis. Approximately two-thirds of our current customer base is single-location practices. The addition of another location within a multi-location customer does not improve our net revenue retention rate. Looking solely at multi-location groups on a logo basis, our net revenue retention rate is 102%, while our net revenue retention rate is 93% for single-location practices. Multi-locations have a higher net revenue retention rate on a logo basis because of location additions. My final point is that our ability to expand net revenue retention has been limited because customers often adopt most of our product suite upfront. Customers often consolidate multiple point solutions when they purchase Weave's unified platform. This establishes higher initial revenue capture, though this historically limited our near-term upsell opportunities.

Jason Christiansen: We have seen this dynamic reflected in average revenue per location growth, which grew 10% over the past two years, even as net revenue retention declined over the same period. However, the addition of TrueLark and faster product development cycles are now meaningfully expanding the upsell opportunity within our installed base. Our insurance eligibility and TrueLark products drove acceleration of upsells in Q4, and our penetration into the installed base for both products is still less than 2%. We ended 2025 with 39,625 active customer locations, an increase of 4,628 locations year-over-year. Before turning to our outlook, I'll briefly recap full year performance. For 2025, total revenue grew 17% to $239 million.

Jason Christiansen: Gross margin for the year expanded to 72.7%, up 80 basis points from 71.9% in the prior year. We delivered full-year operating income of $4.1 million, representing an operating margin of 1.7% compared to 0.4% last year. This marks another year of progress and profitability, and I would like to highlight that this year's improvement came while also making targeted investments in growth initiatives, which reflects our ability to balance growth while making investments into our business. We are pleased with our progress this year and would like to thank our team members at Weave, our customers, and partners for their contributions throughout the year. Looking ahead, we remain encouraged by the strengthening foundation of the business and the opportunities in front of us.

Jason Christiansen: For Q1 2026, we expect total revenue to be in the range of $64.2 million to $64.8 million. We expect to improve first quarter operating income year-over-year, and for it to be in the range of $1 million to $2 million. As a reminder, there are seasonal factors that result in a sequential increase in expenses in Q1, including the reset of payroll tax limits, benefit renewals taking effect, and the timing of the annual audit fees, which are weighted more heavily in Q1. We remain committed to delivering improving margins while maintaining our bias toward growth.

Active growth opportunities. This space grew to become our second largest vertical by location count in Q2 25.

Jason Christiansen: We are beginning to benefit from the investments made in 2025, such as those made in sales and marketing, and we will be flowing an increased percentage of incremental revenue into operating income in 2026. For the full year 2026, we expect to grow total revenue to be in the range of $273 million to $276 million. With the new products Brett discussed, which will be released throughout the year, we expect the impact of these products to positively impact revenue growth in the latter half of the year. We also expect to improve non-GAAP operating income year-over-year to be in the range of $8 million to $12 million.

That momentum continued and we added more specialty location specialty medical locations in Q4 than in any quarter in our history.

Specialty medical comprises 29 specialties and we currently focused on just for primary care physical and occupational therapy aesthetics and med spa.

Next we've payments grew at more than twice the rate of total revenue in 2025 with strong early adoption of new capabilities like automatic automated payment reminders bulk collections and surcharges.

Today, we announced a partnership agreement with care credit the leading patient financing solution used by over 285000 health and wellness locations nationwide. This.

Jason Christiansen: We expect our weighted average share count for Q1 to be approximately 78.7 million shares and approximately 79.9 million shares for the full year. In closing, I share Brett's excitement about our 2026 roadmap and our position in the market. We delivered a strong 2025, marked by solid revenue growth, continued margin expansion, and improving profitability and cash generation. We remain confident in our strategy and our ability to execute as we continue to balance growth and profitability improvements. With that, I'll turn the call over to the operator for Q&A.

This integration is expected to give we've customers greater visibility into available patient credit streamline the credit application process and improved treatment acceptance rates by making care more accessible.

In conclusion, we've delivered consistent revenue growth expanded margins and free cash flow, while continuing to invest in innovation just as importantly, the customer successes, we see today gives us confidence that this value creation is repeatable and sustainable.

We've as defining the intelligent health care front office, we are building a durable scalable business that delivers on our commitments and we are excited about the long term value. We can create for both our customers and our shareholders both myself and the weed management team and our 20th twenty-six very excited about not only opportunity ahead of us but also our.

Operator: We will now begin the question and answer session. If you would like to ask a question, a reminder to please raise your hand now. If you have dialed in to today's call, please press star nine to raise your hand, star six to unmute. Please stand by as we compile the Q&A roster. Our first question comes from Parker Lane of Stifel. Your line is open. Please go ahead.

Very unique position to capitalize on the opportunities and deliver additional value to our markets.

I want to thank our customers partners team members and shareholders for your continued trust and with the progress. We've made gives us strong confidence in the path ahead with that I'll turn the call over to Jason for a deeper discussion of our financial performance.

Matthew Kikkert: This is Matthew Kickert, for Parker. Thank you for taking my questions. To start, can you talk a little bit more about the CareCredit integration that you announced this morning? Just curious if that's your focus is to drive incremental payments attach rate, more average payments volumes across existing customers or something else?

Thanks, Brett and good afternoon, everyone. It was another solid quarter and a strong finish to the year for we've reflecting continued momentum in our growth initiatives and disciplined execution across the business.

Jason Christiansen: Yeah, great to catch up with you, Matthew. The CareCredit partnership, what that really does is open up another avenue for us to capture volumes that otherwise would flow through CareCredit themselves. They are the largest provider of patient financing solutions in the market, and this gives us access through the partnership to some of the volumes that otherwise would flow through them. So there's work now to be done on the integration and bringing that directly to market. So today we just announced that we completed the partnership, and we'll have more color to provide in the future.

The growth in our product suite this year, including the acquisition of true large expanded our estimated total addressable market by roughly $7 billion to an estimated $22 billion.

We believe Theres further Tam expansion on the horizon as we add capabilities to our AI receptionist.

Across our established verticals, we see a meaningful runway for continued growth.

In dental our initial market, we are in fewer than 15% of U S locations highlighting the depth of opportunities still ahead.

For example, we were has recently been selected and endorsed by the American Dental Association as its exclusive patient engagement solution.

Giving us co marketing access to their 160000 members and reinforcing our leadership position in the dental market.

Brett White: Yeah. And I would add, you know, this is kind of just the next step in our payment strategy. So, you know, kind of starting with basic payment processing, then moving into more, additional financial tools, additional financial vehicles, you know, that allow our customers to offer their patients. So, it takes our payment solution to basically a financial solution, and, the practices have more tools to offer their patients, whether it be financing through CareCredit, financing through themselves, using the Weave tools to schedule payments. So it just makes the payment product, more attractive, stickier, in addition to attaching more volume.

Specialty medical is our largest and newest U S market opportunity and we remain in the early stages of penetration with roughly 1% share.

We see a clear path to building a significantly larger business with our growing suite of AI powered solutions expanding market share and increasing average revenue per location.

Moving to our financial results, starting with the fourth quarter, we produced $63.4 million in total revenue, which represents 17% year over year growth driven by payments and the addition of new locations.

Matthew Kikkert: Okay. And then secondly, for 2026, what are your expectations for growth rates across the different subverticals?

Gross margin for the quarter was 73, 3% representing a year over year improvement of 70 basis points.

We have delivered sequential gross margin expansion and 15 of the past 16 quarters, including a 30 basis point sequential improvement in Q4.

Jason Christiansen: Yeah. You know, we're starting the year in a great position. We haven't broken out the growth rates for each one of the different the verticals that we serve. But we continue to anticipate strong growth across the growth vectors that we've talked about around specialty medical. We just talked about how Q4 was our strongest quarter from an additions perspective there. Mid-market grew nicely in 2025. We expect that to continue. And so can't speak to the underlying components, but we do anticipate to continue to see momentum and growth through those, through the same channels.

Margin improvement was primarily driven by ongoing efficiencies in our cloud infrastructure and the amortization of phone hardware and payment terminals as devices older than three years become fully amortized.

We also continue to benefit from the growing contribution of higher margin payments revenue.

Total operating expenses for Q4 were 70% of revenue.

General and administrative expenses were $9 $6 million and provided the most year over year operating leverage improvement in our business.

General and administrative expenses improved to 15% of revenue from 17% in Q4 2024, a decrease of over 200 basis points.

Brett White: Yeah, and I would add, you know, expect specialty medical probably will be the strongest grower just because of the opportunity set here and all the work that we've done on adding integrations throughout this year, continue to add them throughout the year. Some of the marketing dollars that you saw that we spent in Q4 is really around developing our brand presence in that sector. So we expect that to grow, continue to be the fastest grower. I expect all of our verticals to grow nicely. The omni-channel AI Receptionist that we're rolling out is really valuable to kind of all verticals, in integrated and not. I mean, the tool is quite useful even without a PMS integration. So I think I expect solid growth in all verticals, but I think especially medical, probably lead the pack.

Research and development expenses were $8 $9 million or 14% of revenue, which represents a decrease from 15% in Q4 2024.

Sales and marketing expenses totaled $25 $6 million or 40% of revenue.

As discussed in previous earnings calls, we made a number of targeted investments in 2025, we added sales capacity in mid market. We grew our upsell team to increase product attach rates, including payments through a new dedicated payment sales team and we built out a channel sales team that focus.

As exclusively on selling through commercial partnerships.

We also increased our marketing program spend.

To increase brand awareness and demand in the specialty medical vertical and in promoting our AI receptionist or new products.

Operator: Perfect. Thank you.

Matthew Kikkert: Perfect. Thank you.

Operator: Your next question comes from the line of Alex Sklar with Raymond James. Your line is open. Please go ahead. Your line is open. Please go ahead. We'll move on to our next question from Hannah Rudolph of Piper Sandler. Your line is open. Please go ahead.

Mid market and specialty medical sales accelerated in 2025, and we finished the year with strong sales performance and a healthy pipeline to start 2026 behind these investments.

We continue to optimize our sales and marketing efforts and anticipate some improvements in sales and marketing efficiency in the second half of 2026.

Operating income for the quarter was $2 $3 million, an improvement of over $500000 compared to Q4 2020 for.

This represents an operating margin of three 6%, a 30 basis point improvement over the prior year and a 90 basis point improvement sequentially.

Hannah Rudoff: Guys, thanks for taking my questions today. It was encouraging to hear that stat about the one customer, I believe you said, who scheduled 1,200 appointments using your AI Receptionist. I guess longer term, as you think about it and you launch more AI capabilities and, and you complete the rollout of this unified inbox, how do you think about pricing to capture the value that you're delivering?

Turning to the balance sheet and cash flow, we continue to see strong liquidity and free cash flow. We ended the quarter with $81 $7 million in cash and short term investments an increase of $1.4 million sequentially.

Brett White: Yeah. So, we will definitely be able to monetize it. I think still being worked out is: Is it priced as an additional module, or is it priced as, you know, included in a bundle? So, for example, you know, you may have standalone TrueLark now, and if you want to go to the Fusion Inbox, where that brings everything from TrueLark and Weave all together in one place, which is the ultimate destination, is that a premium product that we price for? The really important concept, though, is that we're now able to attach to the labor budget because we can just prove how we save labor and how we drive revenue. So we're very confident that we can monetize the additional AI omni-channel receptionist functionality, and I think we'll work it out over time.

Cash provided by operating activities in Q4 was $6 $2 million in free cash flow was $4.4 million free cash flow for the full year was $12 $9 million, which represents 24% year over year growth.

Our net revenue retention rate in Q4 was 93% our gross revenue retention rate was 98, 9% and remains very strong for companies serving SMB customers.

As a reminder, our reported retention rates, our weighted average of the previous 12 months retention rates.

As such it can take several quarters for the progress we are currently making to show through our reported retention metrics.

I will provide additional onetime metrics in this year and recap, which we believe may be helpful. In understanding 2025 retention rate trends.

Brett White: I think a really important point is we don't, we don't license by seat. We license by location and then consumption, and we're, we're confident that these tools will produce a lot of value for the practices, and we'll be able to monetize them accordingly.

First when looking at gross retention, we implemented a number of initiatives in 2025 that improve the customer experience.

Including more tailored on boarding new products and refined product packaging, which along with greater integration covered in depth across all verticals helps ensure customers receive the value they expect.

Hannah Rudoff: Totally makes sense. And then, Jason, I really appreciate the additional color you gave this quarter around NRR and the multi-location NRR you shared. I guess you've talked about churn being higher and average sales prices being lower initially in some of your newer verticals, as you know, you have newer integrations and some of the solutions are non-integrated. I guess, have you seen these metrics stabilize for some of your oldest specialty medical cohorts, or does that take longer than a few years to kind of stabilize and average with historical metrics?

These efforts yielded a steady reduction in churn in the second half of 2025, and Q4 churn returned to our 2023 and 2020 for churn levels.

We expect gross revenue retention rates to trend back to historical ranges of 91% to 93% over time.

Jason Christiansen: Yeah, thank you for the question. You know, we saw the same phenomenon. I highlighted how we saw churn decrease through the second half of the year in Q4, return to 2023, 2024 rates. You know, we saw a nice improvement in specialty medical as well in Q4, and so we've already started to see some of the improvements there. We've delivered a number of integrations on that front. We've expanded our coverage on that front. So as those have started to mature, we're encouraged about making that declaration about where churn will trend back towards, because we're already starting to see some of the proof points there that we've been talking about.

Previously, we highlighted how integrations with practice management systems affect churn.

Customers, who purchase we have products that are not yet integrated with practice management systems or have basic read only integrations typically have higher churn initial churn rates.

New verticals like specialty medical typically start with higher churn rates, which improve over time as we increase the number and depth of practice management integrations.

Additionally, we have seen ongoing trend of single locations being acquired by larger groups. While we may lose single locations to multilocation groups through acquisition or investments in Midmarket and AI combined with high customer satisfaction rates position us to potentially win those businesses back as part.

Brett White: Yeah, and I would add, Hannah, you mentioned, does it, you know, does it get better over, over years? And it's actually happens more quickly than that. We're seeing it improve over quarters. And it's just as you, as you get your, you know, improve your integrations, depth, breadth, churn rates come down. And, and not only do churn rates come down, but, but CAC comes down over time. As you develop a brand, you have more, more word-of-mouth, you're more familiar in the trade shows. So, it's, it's a, it's a virtuous benefit that, that comes over... trends over time. And then if you say, well, you know, how do you know that? It's, it's just, you know, from our history, looking through all of our verticals that we enter.

A larger deal.

Transitioning to net revenue retention rates, we discussed previously that our net revenue retention rate in the first half of 2025 was bolstered by the effects of a price increase in 2024.

Which accounted for approximately 250 basis points of uplift, we lapped the effect of that price increase in the first half and our net revenue retention rate has subsequently decreased accordingly.

It's also important to note that our reported retention metrics are measured on a location basis not on a customer or logo basis, approximately two thirds of our current customer base is single location practices.

Brett White: That's one of the reasons we do it as a step function, as opposed to just, you know, doing a shotgun blast with a lot of verticals. Because the idea is, you know, you go into initial vertical, ASP is lower, CAC is higher, churn is higher. You work through that, ASP comes up, CAC comes down, churn comes down, and then you kind of go into a new vertical, and you kind of just stage it that way. I've been in vertical SaaS and payments for over a decade, and this is the pattern I've seen throughout that entire period.

The addition of another location within a multi location customer does not improve our net revenue retention rate.

Looking solely at Multilocation groups on a logo basis, our net revenue retention rate is 102%.

While our net revenue retention rate is 93% for single location practices mulch.

Alexander Sklar: ... Great, really encouraging to hear. Thank you, guys.

Hannah Rudoff: ... Great, really encouraging to hear. Thank you, guys.

Multi locations have a higher net revenue retention rate on a logo basis because of location additions.

Operator: And we will come back to Alex Sklar for your next question from Raymond James. Your line is open. Please go ahead. A reminder that it is star six to unmute. Your line is open, Alex. Okay, we will move on to Mark Chappell with Loop Capital. Mark, your line is open. Please go ahead.

My final point is that our ability to expand net revenue retention has been limited because customers often adopt most of our products we upfront.

Customers, often consolidate multiple point solutions when they purchase <unk> unified platform.

This establishes higher initial revenue capture though this historically limited our near term upsell opportunities.

We have seen this dynamic reflected in average revenue per location growth, which grew 10% over the past two years, even as net revenue retention declined over the same period.

Mark Chappell: Hi, good afternoon. Can you hear me okay?

Operator: Yes, yes, we can.

Mark Chappell: Okay, great. Super. So thanks for taking my question. Brett, starting with you, I was wondering if you could just kind of walk through your investment priorities and also hiring priorities for the coming year?

However, the addition of true large and faster product development cycles are now meaningfully expanding the upsell opportunity within our installed base.

Brett White: Sure. So, I think they're the same, our investment priorities and our hiring priorities. So that's, that's good. I think number one on our hiring and investment priorities are product and engineering. We've got a really unique advantage with... Since we own the telephony stack, we have the practice phone number, we have the data. We are really uniquely positioned to take, you know, the AI Receptionist technology from a text experience to, you know, kind of a native inside of Weave and then make it a full voice experience. And so we are really leaning hard into that and investing against, hiring engineers and product people to make sure that we can execute effectively on that one.

Our insurance eligibility and true large products drove acceleration of Upsells in Q4, and our penetration into the installed base for both products is still less than 2%.

We ended 2000 and twenty-five with 39625 active customer locations, an increase of 4628 locations year over year.

Before turning to our outlook I'll briefly recap full year performance.

For 2025 total revenue grew 17% to $239 million gross margin for the year expanded to 72, 7% up 80 basis points from 71, 9% in the prior year.

We delivered full year operating income of $4 1 million, representing an operating margin of one 7% compared to 0.4% last year.

Brett White: I think, you know, other investment priorities are on the GTM side, go-to-market side, and we've actually made a couple changes to our model at the end of this year and into next year. We're actually we used to have a full-service AE model, and now we're kind of moving more to an SDR AE model. It's more efficient, and it seems to be working, so early proof points are good there. And I think those are the big investments we're making, certainly in the first half of the year.

This marks another year of progress and profitability and I would like to highlight that this year's improvement came while also making targeted investments and growth initiatives, which reflects our ability to balance growth, while making investments into our business.

We are pleased with our progress this year and we'd like to thank our team members that we've our customers and partners for their contributions throughout the year.

Looking ahead, we remain encouraged by the strengthening foundation of the business and the opportunities in front of us.

Mark Chappell: Okay, great. Thank you. And then as a follow-up, you know, some of your competitors are also highlighting AI in their products. I was wondering if you could just talk a little, little bit about how Weave is either differentiating or plans to differentiate its AI automation capabilities from those of your competitors.

For the first quarter of 2026, we expect total revenue to be in the range of $64 $2 million to $64 $8 million.

We expect to improve first quarter operating income year over year.

And for it to be in the range of $1 million to $2 million.

Brett White: Sure. So, you know, we see lots of companies who are, you know, some, some have some products, some just put AI on their website. I think our unique... Well, I know our unique differentiators are, you know, kind of what I started with: we own the telephony stack. We've got the trusted relationships, and we own the very specific complex industry, you know, industry-specific workflows. We're a trusted partner of these businesses, and they really, you know... I meet with customers, and they'll show me all the products they have, and they say: "What- Which of these can Weave do, please?" They really want to consolidate functionality. So the idea of saying, for example, having an AI chatbot up in one window and Weave up in another window and a PMS in another window, it just doesn't work great.

As a reminder, there are seasonal factors that result in a sequential increase in expenses in Q1, including the reset of payroll tax limits benefit renewals, taking effect and the timing of the annual audit fees, which are weighted more heavily in Q1.

We remain committed to delivering improving margins, while maintaining our bias toward growth. We are beginning to benefit from the investments made in 2025, such as those made in sales and marketing and we will be flowing an increased percentage of incremental revenue into operating income in 2026.

For the full year 2026, we expect to grow total revenue to be in the range of $273 million to $276 million.

With the new products, Brett discussed, which will be released throughout the year. We expect the impact of these products to positively impact revenue growth in the latter half of the year.

Brett White: And so we have the opportunity to bring all of those workflows together, and because we have the full experience, we can retain context through the whole discussion. So you may start with a text, or you may start with a call, and then the call transitions to text, and then the text maybe gets escalated to a specific person in the staff who can handle only, specifically handle that question. All of that interaction, whether it's voice or text, gets retained in one place, and it also gets analyzed by our Weave Call Intelligence. So then you can create action items, you can create tasks, you can actually perform work, whether it be issuing an invoice, filing an insurance, checking on Insurance Verification, booking an appointment, rescheduling an appointment.

We also expect to improve non-GAAP operating income year over year to be in the range of $8 million to $12 million, we expect our weighted average share count for Q1 to be approximately $78 7 million shares and approximately $79 9 million shares for the full year.

In closing I share breaths excitement about our 2026 roadmap and our position in the market. We delivered a strong 2025 marked by solid revenue growth continued margin expansion and improving profitability and cash generation, we remain confident in our strategy and our ability to execute.

As we continue to balance growth and profitability improvements with that I'll turn the call over to the operator for Q&A.

Brett White: So having all, you know, the deep integrations, the deep workflows, the subject matter expertise, the relationships, and the ability to kind of have seamless handoff is a real, real differentiator. These highly specific workflows are hard, and you have to learn them over time. If you get an appointment wrong, so for example, someone wants a crown done, and you book, you know, a 30-minute appointment for a cleaning, that really hurts the practice's day. And so having that knowledge, that experience, you know, we've got billions of these interactions, and we know kind of over time, what type of calls result in what type of outcomes, and we can optimize practice operations using that knowledge and that deep expertise.

We will now begin the question and answer session. If you would like to ask a question. A reminder to please raise your hand now if you have dialed into todays call. Please press star nine to raise your hand star six to one mute. Please standby as we compile the Q&A roster.

And our first question comes from Parker Lane of Stifel. Your line is open. Please go ahead.

Hi, This is Matthew on.

For Cracker. Thank you for taking my questions.

To start can you talk a little bit more about the care credit integration that you announced this morning.

Curious if that's your focus is to drive incremental payments attach rate more average volumes.

Existing customers or something else.

Yeah.

Great great to catch up with you Matthew.

Mark Chappell: Thank you.

The care credit.

Partnership what that really does is open up another avenue for us to capture volumes that otherwise would flow through.

Operator: We will come back one more time to Alex Sklar with Raymond James. Your line is open. Please go ahead. Please ensure that you're on mute locally.

Care credit themselves, they're the largest provider of patient financing solutions in the market and this gives us access.

Alexander Sklar: Can you hear me now?

Operator: Yep, go ahead.

Alexander Sklar: Can you hear me now?

Brett White: Hi, Alex.

Alexander Sklar: Okay, all right. Thanks. Like, third, it's like third time's the charm. This is actually John on for Alex. Brett, maybe we'll start with payments here. It's great to hear about the continued strength in payments. It's been a nice growth driver for you. I'm curious, so any comments you can share on growth differences you're seeing by end market, and then maybe how we should think about payments growth and payments attach rate in 2026 and over the medium term? Then I have a quick follow-up.

Through the partnership.

To some of the volumes that otherwise would flow through them. So theres work now to be done on the integration and bringing that directly to market. So today, we just announced that we are.

Completed the partnership.

And we'll have more color to provide in the future.

Brett White: ... Right. So I can give you some product growth highlights, and maybe Jason can talk about sectors. So we released this year a couple of really cool new features, bulk collection, but surcharging. Surcharging has been very well received. It's a great upsell product, and that is actually driving some pretty reasonable, almost significant volume growth from the new customers who adopt it. And of course, surcharging is your ability to charge the patient for the credit card fee. And so that gets us not only a better take rate, but more importantly, it just gets us more volume. So that's in early stages, but we're seeing some very nice green shoots on that one, and I'll let Jason talk about sectors.

And I would add.

This is kind of just the next step in our payment strategy, so kind of starting with basic payment processing then moving into more.

Additional financial tools additional financial vehicles.

That allow our customers to often their patients. So it makes our takes our payment solution to basically a financial solution and.

The practices have more tools to offer their patients whether it be financing through care credit.

Nancy to themselves using the we have tools to schedule payments. So it just makes the payment product.

More attractive stickier and addition to attaching more volume.

Okay, and then secondly for 2026, what are your expectations for.

Jason Christiansen: Yeah. So one of the best ways to think about payments in the sectors and how it differentiates for us is when you think about the economics of a practice, the average dentist within a practice will do about $1 million in gross billings a year. And you know, about 50 to 60% of that will go through an insurance process. So the remaining, you know, 40, 50% is our opportunity to go after that. So when we think about going after or the performance in different sectors, what's really important is to understand what the insurance component within each one of the sectors we go after or that we sell to have, and what just the nature of their economics are.

Or growth rates across the different sub verticals.

Yeah.

You know, we're we're starting the year in a great position, we haven't broken out the growth rates for each one of the different verticals.

The verticals that we serve.

But we continue to we continue to anticipate strong growth across the growth vectors that we've talked about around specialty medical we just talked about how Q4 was our strongest.

Strongest quarter from from a from an additions perspective, there mid market grew nicely in 2025, we expect that to continue.

And so you can't speak to the underlying components, but we do anticipate to continue to see.

Jason Christiansen: And so, like in, in specialty medical, when you're dealing with primary care, you're dealing with significantly higher insurance coverage rates. And so the payments opportunity for us in that space isn't as great as it is in, like, aesthetics or in veterinary. And so we try to align our go-to-market efforts with the needs of those industries and the opportunity for us to expand revenue per location through them. So, that's how we think about the different specialties, and it's a contributing factor. Brett talked about how we approach the different specialties and the next verticals in a step function. We look at the overall economics of those specialties as we decide what are the next specialties or the next verticals that we open up.

Momentum and growth through those through the same channels.

Yeah, and I would add.

We expect especially medical probably will be the strongest grower just because of the.

The opportunity set here and all the work that we've done on adding integrations.

Throughout this year continue to add and throughout the year. Some of the marketing dollars that you saw that we spent in Q4 is really around developing a brand presence.

In that sector. So we expect that to grow continue to be the fastest grower I expect all of our verticals to grow nicely the omnichannel.

AI receptionists that we're rolling out is really valuable to kind of all verticals, Inc. An integrated and not I mean, the tool is quite useful even without a pms integration. So I think I expect solid growth in all verticals, but I think specialty medical probably lead the pack.

Terrific. Thank you.

Jason Christiansen: And, it's something we consider there across all the different solutions that we offer.

And your next question comes from the line of Alex Sklar with Raymond James Your line is open. Please go ahead.

Alexander Sklar: That was great color there. And then, Jason, maybe just a follow-up on the NRR improvements. I, I know it's been touched on in earlier questions, but specifically, I do want to understand how additive you think some of the newer products, like the TrueLark and your organic product expansion, can be to NRR growth in 2026 and maybe over the medium term, kinda what's embedded in, in the guide there. Thanks.

Your line is open. Please go ahead.

Okay.

We'll move onto our next question from.

Jason Christiansen: Yeah. So what's embedded within the guide, a lot of the growth from the AI Receptionist follows the timeline and the roadmap that Brett laid out in his remarks. So it's biased more towards the second half, just based on the timeline for when those products roll to general availability. You know, I think the opportunity for growth is really strong. From a net revenue retention perspective, we're still in the early days of selling that. The impact it'll have, I guess I'm not really to provide a lot of color on that today. There's a significant upsell opportunity, but we also know that customers have typically landed heavy whenever we bring these new capabilities, which could lead to further average revenue per location expansion without necessarily leading to significant net revenue retention expansion.

And our Rudolph with Piper Sandler.

Your line is open. Please go ahead.

Guys. Thanks for taking my questions today, it was encouraging to hear that Scott about the one customer I believe you said his schedule of 1200 appointments using your AI receptionist I guess longer term, how you think about it in your lunch more AD capability. When you complete the rollout of a unified inbox, how do you think about pricing to capture an argument you deliver.

Morning.

Yeah. So we will definitely be able to monetize it and I think still being worked out as is it priced as an additional mono module or is it priced as <unk>.

Included in a bundle. So for example, you know you.

May I have standalone true like now and if you want to go to the fusion inbox, where that brings everything from true arc and we all together in one place which is the ultimate destination is that a premium product that we price for that that the really important concept, though is that where we're where we're now going ability to.

Jason Christiansen: And so I guess I’d like to let the dynamics play out a little bit more as we get more sales experience there, but the opportunity is quite significant and really encouraging.

<unk> to the labor budget, because where we can just prove how we save labor and how we drive revenue. So we're very confident that we can monetize them. The additional AI omnichannel receptionists functionality and I think we'll work it out over time I think a really important point is we don't we don't license.

Alexander Sklar: Thank you.

Brett White: I wanted to add. Let me just add a little bit more color to the earlier question about, you know, why Weave stands out as having an advantage and as we move to these omni-channel AI receptionists, and, you know, there's a bunch of them out there. You know, in addition to the things I mentioned, like domain expertise, a really important one is, frankly, our scale, and the fact that, you know, because we're a public company, because we have scale, we have to do it right. So when it comes to data, you know, maintaining the data security, maintaining and ensuring that the data is used properly. Compliance, you know, we've got HIPAA, we've got PHI, we've got PCI, we've got all these rules, and that we have to comply with.

Spicy.

We licensed by location, and then consumption and where.

We're we're confident that these tools will produce a lot of value for the practices and we'll be able to monetize them accordingly.

Totally makes sense and then Jason I really appreciate the additional color you gave this quarter on an IRR in our multi location and are you Sharon.

You talked about churn being higher than average sales prices being lower initially in hunting and even fair to congregate.

Integrations and fan kind of attrition as our non integrated and then have you seen these metrics stabilized for some of your older specialty medical cohort or does that take longer than a few years to kind of stabilize and average historical metrics.

Brett White: And, you know, reliability and scalability and security and, you know, being able to support the full experience front to back. These are just a lot of things that buyers are becoming more and more concerned about, especially large, you know, groups, that some of these smaller, you know, kind of newer businesses just don't have the scale or the financial ability to comply with, or frankly, it's probably not as much of a focus for them. And for us, it's just absolutely table stakes.

Yeah. Thank you for the question you know we saw the same phenomenon I highlighted how we saw churn decrease through the second half of the year in Q4 returned to returned to 2023 24 rates.

We saw nice improvement in specialty medical as well in Q4, and so we've already started to see some of the improvements there we've delivered a number of integrations.

On that front, we've expanded our coverage on that front and so as those have started to mature or encouraged about making that.

Declaration about where churn wall will trend back towards because we're already.

Operator: There are no further questions at this time. I will now turn the call back to Brett White for closing remarks. Well, thank you all for joining the call. We're super excited about 2026, and thank you again to the entire Weave team for posting an incredible 2025. Thank you. This concludes today's call. Thank you for attending. You may now disconnect.

Operator: There are no further questions at this time. I will now turn the call back to Brett White for closing remarks.

Brett White: Well, thank you all for joining the call. We're super excited about 2026, and thank you again to the entire Weave team for posting an incredible 2025. Thank you.

Already starting to see some of the proof points there that we've been talking about.

Yeah, and I would add Hannah you mentioned does it does it get better over over years and its actually happens more quickly than that we're seeing it improve over quarters.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

And it's just as you as you get your.

Improve your integrations depth.

Brett.

Churn rates come down and not only do churn rates to come down, but our CAC comes down over time as you develop a brand you have were more word of mouth, you're more familiar in the trade shows so.

It's a it's a virtuous benefit that that comes over trends over time, and then if you say well how do you know that it's it's just you know.

From our history looking through all of our verticals that we enter and that's one of the reasons, we do it as a step function as opposed to just doing a shotgun blasts with a lot of verticals because the idea as you go into initial vertical asb's lower CAC is higher churn is higher you work through that SB comes up CAC comes down churn comes down and then you kind of go into a new vertical.

Can you kind of just stage it that way.

And.

I've been in vertical SaaS and payments for over a decade and this is the pattern I have seen throughout that entire period.

Great really encouraging to hear thank you guys.

Okay.

We will come back to Alex Sklar for your next question from Raymond James.

Your line is open. Please go ahead.

A reminder, that is star 628.

Your line is open Alex.

Okay, we will move on to Mark Chapell with loop capital.

Mark Your line is open. Please go ahead.

Hi, Good afternoon can you hear me okay.

Yes, we can okay, great Super so thanks for taking my question Brett starting with you I was wondering if you could just kind of walk through.

Your investment priorities and also hiring priorities for the coming year.

Sure so.

I think they're the same our investment priorities and are hiring priorities.

So that's that's good at I think number one on our hiring and investment priorities are.

Product and engineering.

We are we've got a really unique advantage with since we own the telephony stack. We have the practice phone number we have the data we are really uniquely positioned to take.

The AI receptionist technology from a text experience too.

Kind of a native inside of wave and then making a full voice experience and so we are really leaning hard into that and investing against.

Hiring engineers and product people to make sure that we can execute effectively on that one.

Invest other investment priorities are.

On the G. T M side go to market side, and where we've actually made a couple changes to our model at the end of this.

This year and into next year, where actually we used to go to where we used to have a full service AE model and now we're we're kind of moving more to an S. D. R. A E models, it's more efficient.

And it seems to be working so early proof points are good there.

And I think those are those are those are the big investments, where we're making.

Certainly in the first half of the year.

Okay, great. Thank you and then as a follow up you know.

Some of your competitors are also highlighting AI in their products I was wondering if you could just talk a little a little bit about how we've.

Is the are differentiating our plans to differentiate its AI automation capabilities from those of your competitors.

Sure. So you know we see lots of.

Companies, who are you know some some have some products some just put AI on their website.

I think our unique well I know our unique differentiators are kind of what I said when I started with is we own the telephony stack.

We've got the trusted relationships and we own the very specific complex industry industry specific workflows, we're a trusted partner at these businesses and they really you know I meet with customers and they'll show me all the products they have and they said what.

Which of these can we do please they really want to consolidate functionality. So the idea of saying for example, having an AI chatbot up in one window and we've up in another window and a P. M ups and another window. It just doesn't work great and so we have the opportunity to bring all of those workflows together and become.

We have the full experience we can retain con.

Context through the whole discussion so you may start with a.

A a text or you may start with a call and then that call transitions to text and then the text maybe gets escalated to a specific person in the staff, who can handle only specifically handle that question all of that interaction whether its voice our tax gets retained in one place and it also gets analyzed.

By our we've called intelligence. So then you can create action items you can create task you can actually pull.

Reform work, whether it be issue an invoice filing in.

Checking on insurance verification booking an appointment rescheduling an appointment.

So having the deep integrations the deep workflows, the the subject matter expertise the relationships.

And the ability to kind of have seamless handoff is a real real differentiator. These these these highly specific workflows are hard and you have to learn them overtime. If you get an appointment wrong. So for example, someone wants a crown done in your.

Book.

A 30 minute appointment for a cleaning that really hurts the practices day, and so having that knowledge that experience you know we've got billions of these interactions and we know kind of over time, what type of calls result, and what type of outcomes and we can optimize practice operations using that that knowledge.

And that deep expertise.

Thank you.

And we will come back with more time to Alex Sklar with Raymond James.

Your line is open. Please go ahead.

Please ensure that your own app locally.

Yep go ahead of it to me now.

Hi.

Thanks, Mike.

The third Time's, a charm and this is actually Jon on for Alex Bret maybe we'll start with payment here, it's great to hear about the continued strength in payments and a nice growth driver for you I'm curious any comments you can share on growth differences, you're seeing by end market and then maybe how we should think about payments growth in payments attach rate in 2020.

And over the medium term and I have a quick follow up.

Right. So I can give you some product growth highlights and maybe Jason can talk about sectors. So we released this year a couple of really cool new features.

Bulk collection, but surcharges surcharges.

It has been very.

A very well received it's a great upsell product and that is actually driving some.

Pretty reasonable almost significant volume growth from the new customers, who adopt it and of course surcharges is your ability to charge the patient for their credit card fee and so that gets us not only.

A better take rate, but above and importantly, it just gets us more volume so.

That's in early stages, but we're seeing some very nice green shoots on that one and I'll, let Jason talk about sex.

Sectors.

Yeah. So some of the I think the best one of the best ways to think about payments and the sectors and how it differentiates for us is.

When you think about the economics of a practice.

The average dentist.

Within our practice, we'll do about $1 million in gross billings a year.

And you.

You know about 50% to 60% of that will go through an insurance process. So the remaining you know.

40, 50% is our opportunity to go after that so when we think about going after or the performance in different sectors. What's really important is to understand what the insurance component within each one of the.

The sectors that we go after or that we sell to.

Half and what just the nature of their economics are and so I can and specialty medical when youre dealing with primary care.

Youre dealing with significantly higher insurance coverage rates and so the payments opportunity for us in that space isn't as great as it is and like aesthetics or in veterinary and so we try to align our our go to market efforts with the needs of those.

Those industries and the opportunity.

The opportunity for for us to expand revenue per location through down so.

That that's how we think about the different the different specialties and it's a contributing factor Brett talked about how we approach the different specialties and the next verticals in a step function.

We look at the overall economics of those.

Specialties as we decide what are the next the next specialties over the next verticals that we open up in.

It's something we consider there across all the different solutions that we offer.

That was great color there and then maybe just a follow up on the NR or improvement I.

No it's been touched on an earlier question.

Secondly, I do want to understand how additive do you think some of the newer products like a true large in your organic product expansion can be and are our growth in 2020, and maybe over the medium term kind of what's embedded in the guide there. Thanks.

Yeah. So.

What's embedded within the guide a lot of the growth from the AI receptionist follows the timeline and the roadmap that Bret laid out in his remarks so.

It is biased more towards the second half just based on the timeline for when those products roll to general availability.

You know I think the the opportunity for growth as is our.

Is really strong from a net revenue retention perspective.

We're still in the early days of selling that.

The impact it will have I guess I'm not ready to provide a lot of color on that today. There is a significant upsell opportunity, but we also know that customers have typically landed heavy whenever we bring these new capabilities, which could.

Could lead to further average revenue per location expansion without necessarily leading to significant net revenue retention expansion.

And so I guess, what I'd like to let the dynamics play out a little bit more as we get more cells experience there the opportunity is as a <unk>.

Quite significant really encouraging.

Okay.

There are no as they add can I, let me just add a little bit more color to the the earlier question about why we stands out as.

Having an advantage and as we knew moved to these omnichannel AI receptionists and and you know, there's a bunch of them out there.

In addition to the things I mentioned like domain expertise a really important one is frankly our scale.

And the fact that you know because we're a public company because we have scale.

We have to do it right. So when it comes to data.

Maintaining the data security maintaining them ensuring that the data is used properly compliance.

Compliance, we've got HIPAA, we'd get ph I, we'd got at PCI. We've got all these rules and that we have to comply with.

And.

Reliability, and scalability and security and.

Being able to support the full experience front to back. These are just a lot of things that buyers are becoming more and more concerned about especially large.

Groups that some of these smaller kind of newer businesses, just don't have the scale or the financial ability to comply with their frankly, it's probably not as much of a focus for them.

And for US, it's just absolutely table Stakes.

There are no further questions at this time I will now turn the call back to Brett White for closing remarks.

Well. Thank you all for joining the call. We're Super excited about 2026, and thank you again to the entire we've team for for posting an incredible 2025. Thank you.

This concludes today's call. Thank you for attending you may now disconnect.

Okay.

Q4 2025 Weave Communications Inc Earnings Call [BACKUP]

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