Weave Communications, Inc. Q4 FY2024 earnings call

• 2024 was a year of progress and transformation with strong Q4 performance, including 19% revenue growth, improved profitability, and free cash flow. Gross margins improved for the 12th consecutive quarter to 72.6% in Q4, and the company achieved full-year profitability for the first time. • Focus areas in 2024 included expanding into specialty medical verticals, strengthening integration partnerships, enhancing solutions for multi-location practices, elevating payments, and delivering AI-powered innovations. • In specialty medical, revenue from related practices grew rapidly, and new integrations with practice management software were released. • Partnerships were strengthened, including a strategic one with Patterson Dental, and a dedicated partner sales team was launched for 2025. • Mid-market customer base expansion was pursued with the launch of an enterprise solution and increased sales and marketing investments. • Payments business saw growth with integration of payments into practice management systems, addition of payment plans and reminders, and improved collections for customers. • AI initiatives advanced with the launch of AI-powered platform features and Call Intelligence product, aiming to transform patient engagement and practice operations.

In Q4 '24, Weave delivered revenue of $54.2 million, representing nearly 19% year-over-year growth. Full-year 2024 revenue was $204.3 million, up 20% from the previous year. Gross margin improved to 72.6% in Q4, marking the 12th consecutive quarter of sequential improvement, and 71.9% for the full year. Net revenue retention rate in Q4 was 98%, up from 95% the prior year. Revenue from specialty medical practices, including primary care, med spa, plastic surgery, and physical therapy, grew at twice the rate of the overall company revenue in 2024.

• For Q1 2025, total revenue is expected to be in the range of $54 million to $55 million, and non-GAAP operating income is expected to be in the range of negative $0.7 million to positive $0.3 million. • For full-year 2025, total revenue is expected to be in the range of $232 million to $237 million, and non-GAAP operating income is expected to be in the range of $2 million to $6 million. • The company anticipates continuing to invest in growth areas like partnerships, AI, and payments, with the bias towards growth, but notes a tough Q2 2025 comp due to prior year pricing adjustments.

Q: Alex Sklar from Raymond James asked about the 2025 guide and incremental investments.

A: Alan Taylor stated the bias is towards growth and they'll invest in areas like partnerships, new markets, AI. Brett White added they're making targeted small team investments in growth vectors and expect growth acceleration in the second half.

Q: Brent Bracelin from Piper Sandler asked about the guide and when new initiatives would drive growth.

A: Alan Taylor said the Q2 comp is tough due to prior year pricing, but the philosophy is consistent. Brett White noted they're lapping price adjustments, core business growth in 2025 will exceed 2020, and growth acceleration in the second half.

Q: Parker Lane from Stifel asked about multi-location and enterprise motion.

A: Brett White said it's primarily aimed at dental initially due to brand, product, and partnerships, then will expand to other verticals.

Q: Tyler Radke from Citi (via Kylie) asked about NRR trends and demand.

A: Alan Taylor said NRR will be fed by payments, upsells, and they measure NRR on a location basis. Brett White mentioned strong demand in Q4 and more vectors to pursue providing incremental confidence.

Q: Mark Schappel from Loop Capital Markets asked about monetizing AI products and sales enablement.

A: Brett White said AI products like Call Intelligence are included in bundles or sold as upsells, and sales enablement involves tailoring to new verticals by building integrations and customizing go-to-market motions.