Q1 2024 Weave Communications Inc Earnings Call

Operator: Greetings and welcome to the Weave First Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark McReynolds, head of investor relations. Thank you, Mark. You may begin.

Greetings and welcome to the first quarter of 2024 financial results Conference call. At this time, all participants are in a listen only mode.

Question and answer session will follow the formal presentation.

Once you require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

Pleasure to introduce your host Mark Mcpartland head of Investor Relations.

Mark McReynolds: Mark you may begin.

Mark McReynolds: Thank you Paul Good afternoon, and welcome to <unk> first quarter 2024 earnings call.

Mark McReynolds: Thank you, Paul. Good afternoon, and welcome to Weave's first quarter 2024 earnings call. With me on today's call are Brett White, CEO, and Alan Taylor, CFO. During the course of this conference call, we will make four forward-looking statements regarding the anticipated performance of our These award-winning statements are based on management's current views and expectations until certain assumptions are made as of today's date, and are subject to various risks and uncertainties described in our SEC filings.

Mark McReynolds: With me on today's call is our Brett White, CEO and Alan Taylor CFO.

Mark McReynolds: During the course of this conference call, we will make forward looking statements regarding the anticipated performance of our business.

Mark McReynolds: These forward looking statements are based on management's current views and expectations until certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings.

Mark McReynolds: Weave disclaims any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss non-GAAP metrics that we believe aid in the understanding of our financial results. Unless otherwise noted, all numbers that we talk about today will be in non-capital.

Mark McReynolds: Any obligation to update or revise any forward looking statements.

Mark McReynolds: Further on today's call. We will also discuss non-GAAP metrics that we believe aid in the understanding of our financial results.

Mark McReynolds: Unless otherwise noted all numbers that we talk about today will be on a non-GAAP basis, a reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8-K furnished with the SEC before this call as well as in the earnings presentation on our Investor Relations website at investors don't get.

Mark McReynolds: Reconciliation to Comparable Gap Metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8K furnished with the SEC before this call, as well as in the earnings presentation on our investor relations website at investors.getweave.com. And with that, I'll turn the call over to Brett. Thanks, Mark! And thank you to everyone for joining us today. I'm pleased to report that we had another terrific quarter, providing a strong start to the year. At Weave, our aim is to deliver a better healthcare experience. Every patient, every practice, every interaction.

Mark McReynolds: Dot com.

Mark McReynolds: And with that I'll turn the call over to Brett.

Brett T. White: Thanks Mark.

Brett T. White: And thank you to everyone for joining us today.

Brett T. White: I'm pleased to report that we had another terrific quarter, providing a strong start to the year.

Brett T. White: But we our aim is to deliver a better healthcare experience every patient every practice every interaction.

Brett T. White: We specialize in an integrated customer experience and payments platform build specifically for small and medium sized health care practices.

Brett T. White: We specialize in an integrated customer experience and payments platform built specifically for small and medium-sized healthcare. We empower practitioners to prioritize patient care while we streamline office operations, handle payments processing, and deliver practice growth to improve patient communication and engagement. SMBs are a cornerstone of the U.S. business landscape.

Brett T. White: We empower practitioners to prioritize patient care, while we streamline office operations handle payments processing deliver practice growth or improve patient communication and engagement.

Brett T. White: Smbs are a cornerstone of the U S business landscape for the past 15 years, we've dedicated ourselves to developing a solution finely tuned to the unique requirements of SMB health care practitioners.

Brett T. White: For the past 15 years, we've dedicated ourselves to developing a solution finely tuned to the unique requirements of SMB healthcare practitioners. Unlike larger healthcare institutions, dental clinics, veterinary hospitals, optometry, and medical practices operate without dedicated IT teams, relying instead on a user-friendly software solution like Weave. Our platform streamlines disparate point solutions often utilized by these practitioners, making it easier to attract, engage, and retain patients. I'm excited to share some of the financial highlights from Q1.

Brett T. White: Unlike larger health care institutions.

So clinics veterinary hospitals, optometry and medical practices operate without dedicated itt's relying instead on a user friendly software solution like we've.

Our platform streamlines disparate point solutions, often utilized by these practitioners, making it easier to attract engage and retain patients.

Brett T. White: I'm excited to share some of the financial highlights from Q1.

Brett T. White: We started the year with solid top-line performance, significant improvements in gross and operating margin, and adjusted. Revenue for Q1 was $47.2 million, representing a 19.2% year-over-year growth and $1 million above the high end of the range we provided in February.

Brett T. White: We've started the year with solid topline performance significant improvements in gross and operating margin and adjusted EBITDA.

Brett T. White: Revenue for Q1 was $47 $2 million, representing a 19, 2% year over year growth and a $1 million above the high end of the range we provided in February.

Brett T. White: This is our ninth consecutive quarter of exceeding the top end of our revenue. When Weave went public, our gross margin was approximately 57%, and we set crossing the 70% mark as an important goal and milestone for our business. We are proud to report that in Q1, gross margin reached 70.4%, 280 basis points greater than in Q1 last year, marking the ninth consecutive quarter of gross margin improvement. Additionally, our adjusted EBITDA margin is getting very close to break-even, improving by over 700 basis points from last year to a negative 0.8% of revenue compared to a negative 7.9% of revenue a year ago.

Brett T. White: This is our ninth consecutive quarter of exceeding the top end of our revenue guidance.

Brett T. White: When we went public our gross margin was approximately 57% and we set crossing the night the 70% Mark is an important goal and milestone for our business.

Brett T. White: We are proud to report that in Q1 gross margin reached 74% to.

Brett T. White: 280 basis points greater than Q1 last year, marking the ninth consecutive quarter of gross margin improvement.

Brett T. White: Additionally, our adjusted EBITDA margin is getting very close to breakeven improving by over 700 basis points from last year to a negative 0.8 of revenue compared to a negative seven 9% of revenue a year ago.

Brett T. White: These results underscore the market's demand for our vertically tailored software and payments platform and our continued efforts to improve efficiencies.

Brett T. White: These results underscore the market's demand for a vertically tailored software and payments platform and our continued efforts to improve efficiency. In our February call, I shared our business focus areas for 2024, and I'd like to highlight some of our progress in the first quarter. Accelerating revenue growth is a top priority, with an emphasis on expanding our presence in the dental, optometry, and veterinary verticals and growing in specialty medical markets. We are pleased with the growth that we saw across all of these verticals in Q1, with specialty medical being our fastest growing segment.

Brett T. White: In our February call I shared our business focus areas for 2024, and I'd like to highlight some of our progress in the first quarter.

Brett T. White: Accelerating revenue growth is a top priority with an emphasis on expanding our presence in dental optometry and veterinary verticals and growing in specialty medical markets.

Brett T. White: We are pleased with the growth that we saw across all of these verticals in Q1 with specialty medical being our fastest growing segment.

Brett T. White: Partnerships are a vital contributor to growth across our target verticals.

Brett T. White: Partnerships are a vital contributor to growth across our target. Authorized and certified integrations with partner practice management systems and other healthcare systems or records serve to both increase our addressable market and enhance our product market fit by automating and personalizing communications, which boosts practice growth and efficiency. We aim to become our partners' top choice for patient engagement and communication, allowing Weave to enrich the patient experience and improve data synchronization. Our customers count on Weave to run their business operations, and authorized integrations increase the reliability of their experience.

Brett T. White: Authorized and certified integrations with partner practice management systems, and other health care systems of record.

Brett T. White: Served to both increase our addressable market and enhance our product market fit by automating and personalizing communications, which boosts practice growth and efficiency.

We aim to become our partners top choice for patient engagement and communication, allowing we've to enrich the patient experience and improve data synchronization.

Brett T. White: Our customers count on them to run their business operations and authorized integrations increase the reliability of their experience.

Brett T. White: We made great progress on both new and deepening integration partnerships, and I'd like to highlight a few. In March, we delivered our initial integration with Athena Health, a leading provider of cloud-based healthcare software for 160,000 physicians serving over 110 million patients. We also signed an integration partnership with IDEX, an industry leader that serves as the system of record for over 20% of the veterinary market. Scoping and development have commenced on our integration with two of their brands, EasyVet and Neo, whose veterinary software solutions service more than 8,000 veterinary hospitals.

Brett T. White: We made great progress on both new and deepening integration partnerships and I'd like to highlight a few.

Brett T. White: In March we delivered our initial integration with Athena health, a leading provider of cloud based health care software for 160000 physicians, serving over 110 million patients.

We also signed an integration partnership with IDEXX and industry leader that serves as the system of record for over 20% of the veterinary market.

Brett T. White: Scoping and development has commenced on our integration with two of their brands easy vet and Neo whose veterinary software solutions service more than 8000 veterinary hospitals.

Brett T. White: In addition to developing new integrations, we are successfully pursuing deeper product integration and go to market programs with existing partners.

Brett T. White: In addition to developing new integrations, we are successfully pursuing deeper product integrations and go-to-market programs with existing partners. For example, we have renewed and enhanced our partnership with Dr. Crono, a leading electronic health record provider serving tens of thousands of physicians and over 17 million patients.

Brett T. White: We have renewed and enhanced our partnership with Doctor Kronos.

Brett T. White: A leading electronic health record provider, serving tens of thousands of physicians and over 17 million patients.

Brett T. White: We are deepening our existing integration and working closely to inform their large customer base about these initiatives. We also deepened our partnership with Patterson Veterinary, maker of the Navator and IntraVet practice information management systems that service over 3,000 veterinary hospitals. This partnership includes a commercial agreement enabling the Patterson sales team to recommend Weave as a preferred solution for client communication and engagement for animal hospitals and clinics. Lastly, we signed a product integration and commercial partnership with Prompt EMR, a leading electronic medical record provider for outpatient therapy clinics, serving over 8,000 physical, occupational, and speech therapists.

Brett T. White: We are deepening our existing integration and working closely to inform their large customer base with these enhancements.

Brett T. White: We also deepened our partnership with Patterson Veterinary maker of novel Tour, an introvert practice information management systems that service over 3000 veterinary hospitals.

Brett T. White: This partnership includes a commercial agreement, enabling the Patterson sales team to recommend we've as a preferred solution for client communication and engagement for animal hospitals and clinics.

Brett T. White: Lastly, we signed a product integration and commercial partnership with pumped EMR, a leading electronic medical record provider for outpatient therapy clinics, serving over 8000, physical occupational and speech therapists.

Brett T. White: Our customers experiences the Keystone to retention and we've has consistently been awarded accolades affirming our platforms industry leading performance.

Brett T. White: Our customer's experience is the keystone to retention, and Weave has consistently been awarded accolades affirming our platform's industry-leading performance. Weave was once again recognized by G2 in their Spring 2024 report, reflecting our unwavering dedication to customers. Weave has also been named a top 50 software product for small business for 2024 and is the leader in the G2 grid for patient relationship management. Moreover, we are honored to be recognized for our dedication to building an excellent workplace environment for our employees.

Brett T. White: We was once again recognized by G. Two in their spring 2024 report, reflecting our unwavering dedication to customer service.

We've also been named the top 50 software product for small business, we're 'twenty 'twenty four and as the leader in the G. Two grid for patient relationship management.

Brett T. White: Moreover, we are honored to be recognized for our dedication to building an excellent workplace environment for our employees for.

Brett T. White: For the third consecutive year, we've received a Top Workplaces USA award. We have also been named to the 2024 Shatter List by the Women Tech Council. This important recognition acknowledges our commitment to our people and our future. In closing, I'm immensely proud of what we accomplished in Q1, making a strong start to the year. We continue to grow our top line and hit a significant milestone by crossing the 70% gross margin.

Brett T. White: For the third consecutive year, we received a top workplaces USA Award.

Brett T. White: We have also been named to the 'twenty 'twenty four shattered list by the women Tech Council.

Brett T. White: This important recognition acknowledges our commitment to our people and our future.

Brett T. White: In closing I'm immensely proud of what we've accomplished in Q1, making a strong start to the year. We continued to grow our top line and hit a significant milestone by crossing the 70% gross margin Mark.

Brett T. White: The success is a testament to our dedication to providing innovative solutions that effectively address our customers' needs. I'd like to extend a big thank you to our customers, partners, team members, and shareholders for their continued support of Weave. With that, I'll turn the call over to Alan to provide more detailed financial results and review our outlook.

Brett T. White: This success is a testament to our dedication to providing innovative solutions that affected effectively address our customers' needs.

Brett T. White: I'd like to extend a big thank you to our customers partners team members and shareholders for their continued support of wheat.

Brett T. White: With that I'll turn the call over to Alan to provide more detailed financial results and review our outlook.

Brett T. White: Al.

Alan Taylor: Thanks, Brett and good afternoon, everyone before providing my financial update I'd like to address the Q1 fluctuation in free cash flow we.

Alan Taylor: Thanks, Brett. Good afternoon, everyone.

Alan Taylor: Before providing my financial update, I'd like to address the Q1 fluctuation in pre-cash flow. We successfully implemented a new billing system in Q1 that necessitated deferring March subscription billings into April. This resulted in a one-time increase in our cash receivable balance as of the end of March and a corresponding decrease in free cash flow of approximately $15 million. However, since the vast majority of our billings are done via credit card, cash is received within a few days of billing, and our accounts receivable balance will be back to normal levels in Q2.

Alan Taylor: We successfully implemented a new billing system in Q1 that necessitated deferring March subscription billings into April.

Alan Taylor: This resulted in a one time increase in our accounts receivable balance as of the end of March and a corresponding decrease in free cash flow of approximately $15 million.

Alan Taylor: Since the vast majority of our billings are done via credit card cash is received within a few days of billing at our accounts receivable balance will be back to normal levels in Q2.

Alan Taylor: There will be an associated positive impact on Q2 pre-cash flow of approximately $15 million. Also, as I mentioned last quarter, we paid out our 2023 annual employee bonuses in Q1 of this year, which amounted to approximately $7 million. In prior years, annual bonuses were paid out in Q2. Excluding the impact of both the delay in billing and the timing difference of the bonus payout, pre-cash flow would have been positive for Q1.

There will be an associated positive impact on Q2 cash free cash flow of approximately $15 million.

Alan Taylor: So as I mentioned last quarter, we paid out our 2023 annual employee bonuses in Q1 of this year, which amounted to approximately $7 million.

Alan Taylor: In prior year's annual bonuses were paid out in Q2, excluding the impact of both the delay in billing and the timing difference of the bonus payout free cash flow would have been positive for Q1.

Alan Taylor: Moving on to the financial update, we had a great quarter delivering first quarter revenue of $47.2 million, reflecting 19.2% growth year-over-year. This represents a $1.5 million, or 3% beat, over the midpoint of the range we provided in February. As we called out in our last earnings call, in 2023, our revenue growth rate benefited from an increase in onboarding revenues. Those revenues grew by 150% last year, and a new agreement with Stripe early last year also increased our payments take rate.

Alan Taylor: Moving onto the financial update we had a great quarter, delivering first quarter revenue of $47 $2 million, reflecting a 19, 2% growth year over year. This represents a $1.5 million or 3% beat over the midpoint of the range. We provided in February as.

Alan Taylor: As we called out in our last earnings call in 2023, our revenue growth rate benefited from an increase of Onboarding revenues. Those revenues grew by 150% last year and a new agreement with stripe early last year also increased our payments take rate.

Alan Taylor: Both the improvement in onboarding revenue and the improvement in our take rate for payments will remain in place for 2024, but we do not expect to see the same growth rate in these components of our revenue as we did last year, given that we lapped the input pact of both improvements in Q1. Our net revenue retention rate increased from 95% last quarter to 96% in Q1. The improvement in Q1 NRR was primarily due to positive adoption of payments and software upsells. As I shared in our February call, we anticipate further NRR improvement in 2024.

Alan Taylor: Both the improvement in Onboarding revenue and the improvement in our take rate for payments remain in place for 2024, but we do not expect to see the same growth rate in these components of our revenue as last year as we did last year given that we lapped the input packed of both improvements in Q1.

Alan Taylor: Our net revenue retention rate increased from 95% last quarter to 96% in Q1.

Alan Taylor: The improvement in Q1 in <unk> was primarily due to positive adoption of payments and software up sales as I shared in our February call, we anticipate further NR or improvement in 2024.

Alan Taylor: Our gross revenue retention rate remained at 92% for Q1, among the best in class for SMB retention, and LOGO retention has been consistent for over two years. Transitioning to Operating Results. As a reminder, I will be referring to non-GAAP results unless stated otherwise. Our Q1 results showed significant improvement across the board.

Alan Taylor: Our gross revenue retention rate remained at 92% for Q1, among the best in class for SMB retention and logo retention has been consistent for over two years.

Alan Taylor: Transitioning to operating results.

Alan Taylor: Okay.

Alan Taylor: As a reminder, I will be referring to non-GAAP results unless stated otherwise our Q1 results showed significant improvement across the board gross margin was 74%. This represents a 280 basis point increase year over year payments continues to be the fastest growing component of our revenue and the average.

Alan Taylor: Gross margin was 70.4%, which represents a 280 basis point increase year over year. Payments continued to be the fastest growing component of our revenue, and the average selling price for our subscription product has increased over the last few quarters due to the uptake of our higher-end product bundles. In addition, our engineering and operating teams are dedicated to delivering an outstanding customer experience while also prioritizing efficiency and expanding our margin.

Alan Taylor: Selling price at for our subscription product has increased over the last past few quarters due to the uptake of our higher end product bundles. In addition, our engineering and operating teams are dedicated to delivering an outstanding customer experience, while also prioritizing efficiency and expanding our margins.

Alan Taylor: In Q1 operating expenses were $34 6 million, a $3 $9 million increase from last year compared to a $7 $6 million increase in revenue for the same period.

Alan Taylor: In Q1, operating expenses were $34.6 million, a $3.9 million increase from last year compared to a $7.6 million increase in revenue for the same period. Our operating loss was $1.4 million, an improvement of $2.6 million, or 66%, compared to last year and $600,000 better than the midpoint of the guidance that we gave in February. The corresponding operating loss margin of 2.9% is a significant improvement from the operating loss margin of 10.1% last year.

Alan Taylor: Our operating loss was $1.4 million, an improvement of $2 $6 million or 66% compared to last year and 600000 better than the midpoint of the guidance that we gave in February.

Alan Taylor: The corresponding operating loss margin of two 9% is a significant improvement from the operating loss margin of 10, 1% last year.

Alan Taylor: Our net loss was $400,000, or 1 cent per share, in the first quarter, based on 70.5 million weighted average shares outstanding. This is compared to a net loss of $3.3 million, or $0.05 per share, last year. This represents a $2.9 million improvement due to revenue acceleration and operating efficiency. Adjusted EBITDA loss was $400,000, a $2.8 million improvement year over year. The Adjusted EBITDA loss margin of 0.8% is a significant improvement compared to the 7.9% loss margin reported a year ago.

Alan Taylor: Net loss was $400000 or one cents per share in the first quarter based on 75 million weighted average shares outstanding.

Alan Taylor: This is compared to a net loss of $3.3 million or five cents per share last year.

Alan Taylor: This represents a $2.9 million improvement due to revenue acceleration in operating efficiencies.

Adjusted EBITDA loss was $400000 at $2 8 million dollar improvement year over year adjusted EBITDA loss margin of 0.8% is a significant improvement compared to the seven 9% loss margin reported a year ago.

Alan Taylor: Turning now to outlook for the second quarter and full year 2024 for the second quarter of 2024, we expect total revenue to be in the range of $48 $2 million to $49 2 million and non-GAAP operating loss to be in the range of $2.5 million to $1 five.

Alan Taylor: Turning now to our outlook for the second quarter and full year 2024, for the second quarter of 2024, we expect total revenue to be in the range of $48.2 million to $49.2 million, and non-GAAP operating loss to be in the range of $2.5 million to $1.5 million. For the full year 2024, we are raising our full year outlook and expecting total revenue to be in the range of $197 million to $200 million.

Alan Taylor: Yeah.

Alan Taylor: For the full year 2024, we are raising our full year outlook and expect total revenue to be in the range of $197 million to $200 million. We expect the range for our full year 2024, non-GAAP operating loss to be from $6 million to 2 million.

Alan Taylor: We expect the range for our full-year 2024 non-GAAP operating loss to be from $6 million to $2 million. We expect to have a weighted average share count of approximately 71.7 million shares for the full year.

Alan Taylor: We expect to have weighted average a weighted average share count of approximately 71 7 million shares for the full year.

Operator: To summarize, Weave delivered solid results in Q1. Our performance demonstrates strong demand for our platform, and we remain excited about the opportunity ahead. We will continue to drive our business to maximize that long-term value. [inaudible] Operator, if you could turn it over for questions now, we'd appreciate it. Thank you. We will now be conducting a survey.

Alan Taylor: To summarize we've delivered solid results in Q1, our performance demonstrates strong demand for our platform and we remain excited about the opportunity ahead, and we will continue to drive our business to maximize that long term value.

Alan Taylor: Right.

Sure.

Speaker Change: Operator, if you're going to turn it over for questions now we would appreciate it.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary pick up your handset before pressing the star keys.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, while we poll for questions. Thank you. Our first question is from Jacob Staffel with Goldman Sachs. Please proceed with your question.

Speaker Change: Please while we poll for questions.

Speaker Change: Yeah.

Speaker Change: Thank you. Our first question is from Jacob <unk> with Goldman Sachs. Please proceed with your question.

Brett T. White: Hey guys, thanks so much for the question and sounds like a really good quarter, so good to see that continued delivery and outperformance. Just a quick one for me, especially around specialty medical. I think you called out strength there, so can you touch on maybe the sales cycles that you're seeing within specialty medical specifically, given Weave maybe has a little bit more name brand recognition, a little bit more of a holistic platform, and a little bit more of a tenured sales force?

Jacob: Hey, guys. Thanks, so much for the question and it sounds like a really good quarter. So good to see that continued.

Jacob: Delivering an outperformance.

Jacob: Just a quick one for me, especially around specialty medical thank.

Thank you called out strength there. So can you touch on maybe the sales cycles that you're seeing within specialty medical specifically given we maybe has.

Jacob: A little bit more name brand recognition, a little bit more of a holistic platform.

Jacob: And a little bit more of a tenured sales force and then to follow up can you give any update around hiring given I believe that you mentioned in last quarter and tensions to continue hiring this year.

Brett T. White: And then to follow up, can you give any update around hiring, given that you mentioned last quarter intentions to continue hiring this year? So just any color around those would be great. Thank you so much.

Speaker Change: So just any color around those would be great. Thank you so much.

Speaker Change: Sure Hi, Jacob I'll take it this is Brett.

Brett T. White: Sure, hi Jacob, I'll take it. This is Brett. So yeah, specialty medical is, is, is quite fragmented. And so, you know, our number one vertical is dental. We're very good at it. We've been there for a long time, especially medical is quite fragmented, but they have a really significant need for the solution that we have offered. So our approach there has been to build the integrations with the platform, the PMS providers in those sub-verticals, we call them, and then go into those markets with the reputation that we have in our dental, optometry, and veterinarian verticals. And the result has actually been terrific. It's our fastest growing vertical. As I said on our call last time, it moved from number four to number three.

Brett T. White: So yes specialty medical.

Brett T. White: Is is.

Brett T. White: Is quite fragmented and so you know our number one vertical is dental were very good there we've been there for a long time, especially medical is quite fragmented, but they have a really significant need for the solution that we've offered so.

Brett T. White: Our approach there has been to build the integrations with.

Brett T. White: The platform.

Brett T. White: The pms providers in those sub verticals, we call them and then go into those markets with the reputation that we have in our dental optometry that vertical and the result has been actually terrific.

Brett T. White: It's our fastest growing vertical as I said in our call last time it moved from number four to number three.

Brett T. White: There's a real demand those businesses are doing theyre doing well.

Brett T. White: There's a real demand. Those businesses are doing well in the current economic environment, and we've got a good product-market fit. So, we're able to generate leads. The lead volume actually grew in Q1 versus Q4. We've got good, you know, demo sets and close rates there, and we've got good product market fit. So, we're really just rolling out the playbook and taking it very methodically, very programmatically, and it's working quite well. And then on hiring, yes, we will be hiring throughout the year. We expect to add sales capacity, probably some engineers, and then, you know, other parts of the business just as our customer count grows.

Brett T. White: In the current economic environment and.

Brett T. White: We've got good product market fit so we're able to generate leads the lead volume grew actually in Q1 versus Q4.

Brett T. White: We've got good Dan.

Brett T. White: Most at close rates, there and we've got good product market fit. So we're really just rolling out the playbook and taking it.

Brett T. White: Very methodically very programmatically, it's working quite well.

Speaker Change: And then on hiring them, yes, we will be hiring throughout the year, we expect to add.

Speaker Change: Sales capacity.

Speaker Change: Probably some engineers and then other parts of the business just as our customer count growth.

Speaker Change: Awesome. Thanks, so much guys.

Operator: Awesome, thanks so much, guys.

Speaker Change: Thank you. Our next question is from Brent <unk> with Piper Sandler. Please proceed with your question.

Operator: Thank you. Our next question is from Brent Bracelin with Piper Sandler. Please proceed with your question.

Hi, guys. This is hannah on for Brian.

Operator: Hi guys, this is Hannah on for Brent today. Thanks for taking my questions. Just the first one from me: in David's first full quarter as CRO, are there any learnings he's identified or any low-hanging fruit he has gathered from observing and being a part of the organization?

Thanks for taking my question.

Hannah: The first one from me and David first full quarter NCR out are there any learnings you can identify.

Speaker Change: Are there any low hanging fruit is gone.

And the variable.

Speaker Change: Hi, good organization.

Speaker Change: So I think we've got them on a 30 60 90 day plan.

Brett T. White: So, I think, you know, we've got them on a 30-, 60-, 90-day plan, and that's really progressing as expected. And I think, as I mentioned last quarter, when David was on board, kind of every candidate for that job asked me, "OK, what's broken? What do we need to fix?", and the answer is nothing.

Speaker Change: That's really progressing as expected I think as I am as I mentioned last quarter.

Speaker Change: When David was onboard kind of every candidate for that job asked me, Okay. What's broken why do we need to fix and the answer is nothing on the sales organization is functioning well, they're executing really well and so David's real job is to how do we get to 500 million to think ahead and he's very focused on payments and.

Brett T. White: The sales organization is functioning well. They're executing really well. And so David's real job is to think ahead and how do we get to $500 million. He's very focused on payments. In fact, we've just hired a new payments leader who I think starts in the next couple weeks. And then he's also very focused on partnerships. We're seeing a pretty interesting swing in our partnership landscape. I'd say a year ago or a year and a half ago, Weave was definitely of the mind, like, we'll just go it alone.

Speaker Change: We've just hired a new payments leader, who I think <unk> starts in the next couple of weeks and then he is also very focused on partnerships we're seeing.

Speaker Change: A pretty interesting swing in our partnership.

Speaker Change: Inscape, I'd say, a year ago or year and a half ago.

Speaker Change: He was definitely up the mind like we'll just go it alone and.

Brett T. White: Some of the practice management platforms saw us as competition, and that has changed pretty significantly. And we're seeing much more interest from practice management vendors to partner with us in a win-win way. So, he's very focused on that and really focused on building out an organization that scales.

Speaker Change: Some of the practice management platforms sauces competition and that has changed pretty pretty significantly and were seeing much more interest from practice management.

Speaker Change: <unk> two to partner with us and a win win way so he's very focused on that.

Speaker Change: And really focused on building out an organization that that scales.

Speaker Change: Great. That's super helpful. And then on your Nextgen App, where are we in the process.

Operator: Great, that's super helpful. And then on your NextGen app, where are we in the process of early access rollout, and what kind of feedback are you getting from your multi-location customers on that platform? Great question. We're calling it...

Speaker Change: On the early access rollout and what kind of feedback are you getting from your multi location customers.

Speaker Change: John.

Brett T. White: Great question. We're calling it the New Weave Experience, and I think I talked about it last call. We had a closed beta, and the number of customers were in the product. Now we've gone to an open beta.

Speaker Change: Great question.

John: We're calling it the new we've experience.

John: And I think we talked about last call. We had a we had a closed beta but the number of customers. We're in the product now we've gone to an open beta we've opened it up to more customers.

Brett T. White: We've opened it up to more customers, and really, it has two desired effects. One is our current app is kind of like the size and shape of an old iPhone, and so it's really limited in the amount of real estate available to put in new features, new functionality. So point one of the new experience is to give you a flexible workspace. You can increase or decrease the size.

And really it's it's has to the desired effects one is.

John: Our current App is it's kind of like the size and shape of an old iPhone and so.

It's really limited in the amount of real estate available to put in new features new functionalities.

John: So.

0.1 of the new experiences to give a flexible workspace you can increase or decrease the size also we've done a lot of work on the UX to make it more.

Brett T. White: Also, we've done a lot of work on the UX to make it more functionally rich and be able to achieve transactions or work steps in fewer steps. So that's kind of on the user side. And then on the multi-side, really building it out to make it much more multi-location friendly. So you can look at, for example, one email box or 10 email boxes at once. You can sort. You can message.

John: <unk> functionality rich and.

John: Be able to achieve.

John: Transactions or more steps and fewer steps. So that's kind of on the user side and then on the multi side really building it out to make it much more multilocation friendly. So you can look at <unk>. For example, one email box or attending mailboxes at once you can sort you can message you can do all sorts of things and you can pick and choose which locations you want.

Brett T. White: You can do all sorts of things, and you can pick and choose which locations you want to manage. So that's very useful. On the demo side, we are now demoing it for multi-location opportunities, and we've seen a lot of interest there. Also, the other thing I should add is that it's available both in an app. So, kind of like Slack, you can either access it on a web browser or a downloadable

John: And so that's very useful on the demo side, we are now demo ing it.

John: Multilocation opportunities and.

John: We've seen we've seen a lot of interest there.

John: Also the other thing I should add as it's available both in an app.

John: And web browsers, so kind of like slack you can either you can have either access it on the web browser or in and around a downloadable app and we're seeing a lot of interest on the multi side. So we're going to we're going to it's going to take time to migrate certainly our existing customer base because a lot of them once they're working with something they like they are not going to.

Brett T. White: And we're seeing a lot of interest on the multi-side. So, we're going to, you know, we're going to, it's going to take time to migrate our existing customer base because a lot of them, once they're working with something they like, they're not going to move off; there's no need to. But really, the idea is to deliver this functionality and this new flexible user experience to multi-location opportunities and the feedback there from existing customers and prospects.

John: Now going to move off no need to but really the idea is to deliver dysfunctionality in this new.

John: Flexible user experience to multi location opportunities and the feedback there from existing customers and prospects is quite positive.

Speaker Change: Thank you and our next question is from.

Operator: Thank you. Our next question is from... Alex Sklar with Raymond James. Please proceed with your question.

Speaker Change: Alex Sklar with Raymond James. Please proceed with your question.

Alexander James Sklar: Great. Thank you maybe just follow up on kind of in those last two those last few questions. Brett in terms of all the product and integration improvements over the last kind of 12 months you highlighted a lot of those in the prepared remarks, but can you just help frame the magnitude.

Brett T. White: Great, thank you. Maybe just follow up on kind of those last two, the theme of those last two questions, Brett, in terms of all the product and integration improvements over the last kind of 12 months, you highlighted a lot of those in the prepared remarks, but can you just help frame the magnitude or the size of the increase in terms of your integrated addressable market today relative to a year ago?

Alexander James Sklar: Or the size of the increase in terms of your integrated addressable market today relative to a year ago.

Brett T. White: Sure so.

Brett T. White: Sure. So, if you take round numbers, we look at our... Sam, the market we're going at in dental optometry and VAT, call it, around 200,000 locations. And we've got integrations now with over 90 percent of those locations. The really important thing to understand with an integration is that there are several levels. We categorize them as levels one through five.

Brett T. White: If you take round numbers, we look at our.

Brett T. White: Yeah.

Brett T. White: Sam the market, we're going at in dental optometry that call it around.

Around 200000 locations and we've got integrations now with over 90% of those locations.

Brett T. White: The the really important thing to understand with an integration is theres several levels, we categorize them as level one through five.

Brett T. White: And in dental optometry and veterinarian, we've been going back and forth and writing deeper and deeper integrations. So something that was a year ago or two years ago, a level one integration, which was basically just reading contacts. Now, we're able to deepen those integrations, make them much more powerful, having read-write capabilities, and payment capabilities. So even though we don't technically open up more locations, we make the product market fit much more robust with the ability to deepen the integration. So that's on the Dove side.

Brett T. White: And in in dental optometry that we've been going back and back and writing deeper and deeper integrations. So something that was a year ago or two years ago, a level, one integration, which was basically just.

Brett T. White: Reading contacts now we're able to deepen those integrations make them much more powerful having read right capabilities payment capabilities. So even though we don't technically open up more locations, we make the product market fit much more robust with the ability to deepen the integration. So that's that's on the downside and then on the.

Brett T. White: And then on the next, on the specialty medical verticals where we've really been focusing recently, that is, physical therapy, medical aesthetics, plastic surgery, primary care. We think there are about 160,000 of those in the SAM. And we're, you know, probably not even one-third of the way there with integrations. So, there is lots of opportunity there. And we're, you know, we're just working through the list, chipping away at the integrations and then the go-to-market plans. So, we're making good progress, but we still have lots of opportunity in front of us.

Brett T. White: Next on the specialty medical verticals.

Brett T. White: Verticals, where we've really been focusing recently, that's physical therapy medical aesthetics plastic primary care.

Brett T. White: We think theres about 160000 of those in the Sam and.

Brett T. White: And we're probably.

Brett T. White: Probably not even one third of the way there with integrations.

Brett T. White: So lots of opportunity there and we're in a we're just working through the list chipping away on the integrations and then the go to market plans.

Brett T. White: So we're making good progress, but we've got still lots of opportunity in front of us.

Speaker Change: Okay, great great color, there and then Brett maybe just a follow up for you in terms of kind of accelerating growth is a key priority you said in the prepared remarks I just wanted to talk about some of the lead Gen motions.

Operator: Okay, great color there. And then Brett, maybe just a follow up for you.

Brett T. White: In terms of kind of accelerating growth as a key priority, you said in the prepared remarks, I just want to talk about some of the lead gen activities. Events, I know, were a big kind of snapback last year in terms of the overall source of leads. But can you just talk about some of the processes or broader lead generation sources that you've seen the most success with in terms of growing pipeline here at the start of this year? Sure, so events, for sure.

Brett T. White: Events, I know was a big kind of snapback last year in terms of kind of overall source of leads but can you just talk about some of the processes or a broader lead gen sources that you've seen the most success with in terms of growing pipeline here started this year.

Brett T. White: Sure, so events for sure, especially in Dove. We recently went to a med spa then, and it really, pretty significantly beat our expectations.

Speaker Change: Sure so events for sure.

Speaker Change: Special especially in.

Speaker Change: Dove.

Speaker Change: We recently went to med spa.

Speaker Change: Really.

Brett T. White: So the opportunity, the interest, the demand is definitely there. Other areas we focus on are digital and, you know, a number of different digital marketing categories. And actually, just old school mailers work really, really well. And so, you know, being very focused on product market fit, we have, you know, very vertically focused digital marketing materials and, you know, the classic outbound calling off of lead lists. So we're working both the inbound and the outbound side and seeing quite a bit of success with events, digital, and then just kind of old school mailers.

Speaker Change: Pretty significantly beat our expectations.

Speaker Change: So the the opportunity the the interest the demand is definitely there are other areas. We focus on our digital and you know a number of different digital marketing categories and actually just old school mailers work really really well.

Speaker Change: And so.

Speaker Change: Being very focused on product market fit we have very vertically focused digital marketing materials and you know the classic outbound calling off of lead list.

So we're working both the inbound and the outbound side and.

Speaker Change: And seeing quite a bit of success on events digital and then just kind of old school mailers.

Speaker Change: Okay, great. Thank you.

Speaker Change: Thank you. Our next question is from Parker Lane with Stifel. Please proceed with your question.

Operator: Thank you. Our next question is from Parker Lane with Stiefel. Please proceed with your question.

Operator: Hey guys, thanks for taking the question this afternoon. Alan, this one's for you.

Jeffrey Parker Lane: Yeah, Hey, guys. Thanks for taking the question. This afternoon al this one's for you congrats on the tremendous progress in gross margins since the IPO I think 300 basis points plus what's the new milestone for you guys. When you think about the potential for gross margins and are there any new drivers aside from scale that can get us beyond this is new.

Alan Taylor: Congratulations on the tremendous progress in gross margins since the IPO, I think through 1,300 basis points plus. What's the new milestone for you guys when you think about the potential for gross margins? And are there any new drivers, aside from scale, that can get us beyond this new level that you set?

Speaker Change: What you said.

Alan Taylor: Yeah, thanks for the question. I appreciate it, Parker. Yeah, we're thrilled with this progress. We know there's more to go. We've said that, in the long term, a 75 to 80 percent gross margin company is where we think we can be. That's going to be a combination of things.

Speaker Change: Yeah. Thanks for the question I appreciate it Parker Yeah. We're we're thrilled with this progress we know there's more to go we've said that in the long term at 75% to 80% gross margin companies, where we think we can be.

Alan Taylor: Certainly as payments grows as a portion of our business, that will improve our margins. We always are going to be focused on the cost elements of it. We're blessed with an engineering team that really understands this concept while making sure that customers are taken care of. And that blend is unique and hard to find sometimes, but our folks are great at it. And so they're making sure that efficiency is top of mind as we kind of scale in the cloud with GCP and Just across the board in all of the ways that we scale the scale of business and build the product out so, The upsells that we're looking at, the payments revenue on the revenue side are all going to improve our margin profile and we'll just be having unrelenting vigilance about costs to make sure that we get to where we want to go.

Speaker Change: That's going to be a combination of things certainly as payments grows as a proportion of our business that will improve our margins. We always are going to be focused on the the cost elements at it blessed with an engineering team that really understands this concept well, making sure that customers are taken care of and that blend is unique.

Speaker Change: <unk> and our defined sometimes but our folks are great at it and so there there are making sure that efficiency is it.

Speaker Change: It's top of mind as we kind of scale in that in the cloud with GCB and and.

Speaker Change: Just across the board in all of the ways that we scaled scaled the business and build the product out.

Speaker Change: So.

Speaker Change: The Upsells that were looking at the payments revenue on the revenue side are all going to improve.

Speaker Change: Our margin profile and will just be have an unrelenting vigilance about costs to make sure that we get to where we want to go.

Brett T. White: That makes sense. And then, Brett, for you, I wondered if you could give us a sense of how material the number of potential prospects or customers that have, you know, looked at your lack of integrations with the ones that you've just recently established and said, hey, maybe now's not the right time to buy Weave. Is there a large number of those, or is this really just about driving customer success in your existing base of customers and bringing those integrations closer together?

Speaker Change: Got it that makes sense and then Bret for you wondering if you could give us a sense of how material the number of potential prospects or customers that have looked at your lack of integrations with the ones that you've just recently established that hey, maybe now is not the right time.

Speaker Change: Bye.

Speaker Change: Is there a large number of those or is this really just about driving customer success.

Bret: Our existing base of customers and bringing those integrations closer together.

Bret: I would say so let me take the question in two pieces, one is beeping deepening integrations in existing markets.

Brett T. White: I would say, so let me take the question in two pieces. One is deepening integration in existing markets. And just the deeper the integration is, the stickier the product is. And so the more sticky it is, and it's also perceived as delivering more value. So we can serve up more functionality in an existing implementation; the deeper the integration, so the more value we can prove to the customer, obviously increases the stickiness and then the value we can associate with our product.

Bret: And just the deeper the integration is the stickier the product is and so the more sticky it is and and it's also proceed was delivering more value. So we can we can serve up more functionality.

Bret: In you know in an existing.

Bret: Implementation the deeper the integration so that the more value we can prove to the customer obviously increases the stickiness and then the value. We can we can associate with with that product. So.

Brett T. White: So deepening integrations just makes us much, much stickier and provides more value. And then new integrations. I mean, one of the things we learned at events is that when we roll into town and we talk about, oh, yeah, we now have an integration with this vendor, we have an integration with this vendor, we get a lot more attention. And so it's a very fragmented market. And being able to offer integrations really does open up additional revenue opportunities for us, and we're seeing it in events. We're seeing it in our marketing materials. We're seeing it in our conversion rates. I appreciate the feedback.

Bret: Deepening integrations, just makes us much much stickier and provides more value and then new integrations I mean, one of the things we learned at.

At events is when we when we roll into town and we talk about Oh, Yeah. We now have an integration with this vendor we havent had ratio offender.

Bret: We get a lot more attention and so it's it's there it's a it's a very fragmented market and being able to offer integrations really does open up additional Sam for us and we're seeing it in events, we're seeing it in our marketing materials, we're seeing it in our conversion rates.

Operator: Got it. Appreciate the feedback here. Congratulations, guys.

Speaker Change: Got it appreciate the feedback here and congrats guys.

Thank you.

Speaker Change: Thank you and our next question is from Michael Funk with Bank of America. Please proceed with your question.

Operator: Thank you. Our next question is from Michael Funk with Bank of America. Please proceed with your question.

Michael J. Funk: Great Hi, guys. This is Matt on for Mike.

Operator: Great. Hi guys. This is Matt. I'm for Mike Funk.

Michael J. Funk: I appreciate the question. So my question is on an IRR great to see the inflection this quarter.

Alan Taylor: I appreciate the question. So my question is on NRR. Great to see the inflection this quarter. What's a good upside scenario for NRR going forward, and how important are payments going to be as a lever in expanding that? And then, as a quick follow-up, do you anticipate any evolution in the go-to-market motion, the salesforce structure, or salesforce compensation as some of these adjacent verticals scale and payments become a greater percentage of revenue?

Matt: What's a good upside scenarios and are are going forward and how important is payments gonna be and as the lever and expanding that and then as a quick follow up.

Speaker Change: Do you anticipate any evolution in the go to market motion sales force structure or sales force compensation as some of these adjacent vertical scale and payments becomes a greater percentage of revenue.

Speaker Change: Yeah.

Alan Taylor: Yeah, so Matt, thanks for the question. As we've talked about, the NRR that we report is a 12-month trailing metric, so to see this inflection point has been, I mean, we've talked about it, and we're delivering on it now. So we will see that bend upward; it will do so slowly, obviously because of the nature of the metric, but payments are going to drive that. We've got upsell products in the pipeline that will continue to drive that, and then obviously just retaining our world-class attrition rates, churn rates, and retention rates are key to making sure that that NRR stays healthy and moves up.

Speaker Change: Yeah.

Speaker Change: So Matt Thanks for the question as we've talked about the NRO that we report as a 12 month trailing metric so to see this inflection point has been I mean, we've talked about it and we.

Speaker Change: Delivering on it now so we will see that band upward and we'll do so slowly obviously because of the.

Speaker Change: The nature of the metric that payments are going to drive that we've got up so project products in the pipeline that will continue to drive that and then obviously just retaining our work world class.

Speaker Change: Christian rates.

Speaker Change: Churn rates and retention rates are key to making sure that that in our phase <unk>.

Speaker Change: Healthy and moves up so those are the those are the things that are going to drive that there's where we continue to see increase in our ASP.

Alan Taylor: So those are the things that are going to drive that. We continue to see an increase in RASP, and we're delivering a ton of value as we move forward, so we're able to adjust price modestly, and there's no pushback on that because of the quality and the value that's delivered in the product. So we anticipate that heading up, and just because of the nature of the metric, it won't spike again, but it'll be a nice, steady expansion on that NRR.

Speaker Change: We have add we're delivering a ton of value as we move forward. So we were able to adjust price modestly in two and and there is no pushback on that because of the quality and the value that's delivered in the product. So we anticipate that heading up.

Speaker Change: And just because of the nature of the metric it wont be spike again up but it'll be a nice steady expansion on that in R. R.

Speaker Change: With respect to the to.

Alan Taylor: With respect to the go-to-market, Brett can weigh in as well, but the one thing that I'm excited about is just on the partnership side. Partnership has always been an important piece, but it's been a smaller component of our go-to-market, and I really think that the team we've got assembled now is making headway there in ways we haven't seen before, signing up partnerships and opportunities.

Speaker Change: So the go to market Rec can weigh in as well, but the one thing that I'm excited about is just on the partnership side.

Speaker Change: Partnership has always been an important piece, but it's been a smaller component of our go to market and I really think that the team. We've got assembled now is making headway there in ways, we haven't seen before.

Speaker Change: And signing up partnerships and opportunities that are going to both increase our our integrations as Brett was talking about but also just with other partners to build.

Speaker Change: Be taking us to market and so stay tuned on that.

Speaker Change: Yeah, I'll just add.

Brett T. White: Yeah, I don't know if that's bad. You know, you know, we're

Speaker Change: We're.

Speaker Change: We're learning creatures and we're going to adapt our go to market motions on our sales org.

Speaker Change: So that so that everybody wins, so that the company wins the customer wins the sales team win.

Speaker Change: And we'll just keep keep tweaking and improving.

Speaker Change: Understood. Thanks, so much guys.

Operator: understood. Thanks so much, guys.

Speaker Change: Mhm.

Speaker Change: Sure.

Operator: Thank you. Our next question is from Mark Schappel with Loop Capital Markets. Please proceed with your question.

Speaker Change: Thank you. Our next question is from Mark Chappell with loop capital markets. Please proceed with your question.

Mark William Schappel: Hi, Thank you for taking my question and congratulations on the quarter, especially on the gross margin line.

Operator: Hi, thank you for taking my question and congratulations on the quarter, especially on the gross margin line. Brett, just building on an earlier question around your payments business, I was wondering if you'd just talk about the attach rates you're seeing for your payment solution and whether you're seeing any kind of a meaningful increase on that front.

Mark William Schappel: Brett just building on an earlier question around your payments business. Just wondering if you just talk about the attach rates you're seeing for your payment solution and whether youre seeing any kind of a meaningful increase on that front.

Brett T. White: Hey Mark, thanks for the question. Payments, attach rates, so we, so we should back out. In my opinion, we are way under-penetrated in our Payment attach rates have been increasing. We don't report the number, but it's way below where it needs to be.

Speaker Change: Hey, Mark Thanks for the question so.

Mark: Payments attach rates so we.

Speaker Change: Tobacco in my opinion.

Mark: Opinion, we are way underpenetrated in our customer base.

Mark: Payment attach rates have been increasing we don't report the number.

Mark: But it's way below where it needs to be and it's really been around.

Brett T. White: And it's really been around integrations and just not having a super-focused, high-level executive focused entirely on payments. So, we've made good progress on the integrations. You know, as I said, moving from a Level 1 to a Level 4 or 5 integration is a big deal, but especially when it comes to integrating payments into the workflow. And as I also mentioned, we've hired a new general manager of payments, who starts in the next couple weeks, and increasing penetration rates will be a key goal of his. So, they've been approving it, but they're not where they need to be.

Mark: Integrations.

Mark: And just not having a super focused high level exact focused entirely on payments. So we've made good progress on payment on the integrations you know as I said moving from a level one to level four or five.

Mark: Integration is a big deal when especially when it comes to integrating payments into the workflow.

Mark: And as I also mentioned, we've hired a new general manager of payment starts in the next couple of weeks and increasing penetration rates will be a key goal of his so they've been improving.

Mark: But theyre not where they need to be.

Mark: As you are and your sense is it is there.

Brett T. White: In your sense, is there a product component to this? I mean, are there certain capabilities that still need to be built out into the platform before you see widespread, wider adoption? Yeah, it's largely around workflow.

Mark: Our product component to this I mean is there a certain capabilities that still need to be built out in to the platform. If we do see widespread widespread adoption.

Brett T. White: Yeah, it's largely around workflow. So if you're running the front office of one of these businesses, you want to be able to process payments easily, quickly, and efficiently within your daily workflow. And so we build our product within their workflow so it just fits right in there. They don't really care which payment provider they use.

Mark: Yeah, Yeah, it's largely around workflow. So if you're running the front office of one of these businesses you want to be able to process payments.

Mark: Easily quickly efficiently within your your daily workflow and so building our product within their workflow. So it just fits right in there they don't really care, which payments provider. They use they just want to use the one that makes their lives the easiest and so really working in.

Brett T. White: They just wanna use the one that makes their lives the easiest. And so really working into each business's workflow, the Weave payment experience, I think is the key to product market fit. Part of that is integration, and part of that is just making sure we've got the right buttons and the right tools and the right process for the folks running the front office so it's just seamless and makes their lives easier.

Mark: In two each business's workflow.

Mark: The we've payment experience I think is the key.

Mark: Two product market fit.

Mark: Part of that is the integration and part of that is just making sure. We've got the right buttons and the right.

Mark: Tools and the right process for our folks running the front office so its just seamless.

Mark: And makes their lives easier so that's.

Brett T. White: So that's a large part of it. And then there's just education. A lot of customers have capabilities that they just don't know about or haven't been taught how to use. And so education will be a big part of our push once our new GM is on board to kind of have the full-featured solution integrated or that will fit easily into the workflow, educate them how to make it happen, educate them on how to transition from potentially a different partner, and give them tools that make it much, much easier. So that's the game plan. That's what I think we need to do.

Mark: That's a large part of it and then it's just education.

Operator: Thank you. Our next question is from Tyler Radke with Citi. Please proceed with your question.

Mark: A lot of customers have capabilities that they just don't know about or haven't been taught how to use and so education will will be a big part of our push.

Mark: Once our new G. M is onboard to kind of have the full featured.

Mark: <unk> solution integrated or that will fit easily into their workflow educate them how to make it happen educate them on how to transition from potentially different partner and give them tools that make it much much easier. So that's that's the game plan. That's that's what I think we need to do.

Speaker Change: Thank you that's helpful.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question is from Tyler Radke listing. Please proceed with your question.

Tyler Maverick Radke: Yeah, Hey, guys. Thanks for taking the question.

Operator: Yeah, hey guys, thanks for taking the question. I wanted to go back to the comments you made on the partnership side, particularly with some of the practice management software providers. Can you just talk about what you're doing from an incentive perspective to get those partnerships aligned? Are you kind of co-selling credits, or are you hiring more partner specialists to get this going? It certainly sounds like a big opportunity, but I'm just curious about the things that you're doing to drive those partnerships forward.

Tyler Maverick Radke: I wanted to go back to the comments you made on the partnership side, particularly with some of the practice management software providers.

Tyler Maverick Radke: Can you just talk about what you're doing from an incentives perspective to get those partnerships aligned or are you.

Tyler Maverick Radke: They're kind of co selling credits are you hiring more partner specialists to get this going certainly sounds like a big opportunity, but just curious on the things that you're doing to drive those partnerships forward.

Speaker Change: Sure Hey, Tyler.

Brett T. White: Sure. Hey Tyler.

Speaker Change: It really starts first is just the company philosophy and we've we've.

Speaker Change: Made it very very clear to our team that we're interested in win win partnerships and we've hired.

Speaker Change: Got it.

Tyler Maverick Radke: ARCUS Burleson Who's now our Chief operating officer. He has hired a great head of strategic partnerships, who totally gets it totally.

Tyler Maverick Radke: Has a very keen sense on how to develop win win relationships with the different partners. So once you kind of as a company build that philosophy. Then you can you can impart that philosophy on the potential partners. The pms providers. So they don't see is the competition their customers want we've integrated with their <unk>.

Brett T. White: I think it really starts first with just a company philosophy, and we've made it very, very clear to our team that we're interested in win-win partnerships. And we've hired, we've got Marcus Berthelsen, who's now our chief operating officer, and he's hired a great head of strategic partnerships, who totally gets it, totally understands it, and has a very keen sense of how to develop win-win So, once you kind of, as a company, build that philosophy, then you can impart that philosophy to potential partners, the PMS providers, so they don't see you as a competition.

Brett T. White: Their customers want Weave integrated with their product. So, we just have to convince them that we're not a threat to their core business. We don't want to be in the PMS business. We just want to partner with them so we can get a win-win for their customers, works for them, works for us. So, that's Number One is Velocity.

Tyler Maverick Radke: So we just have to convince them that we're not a threat to their core business. We don't want to be in the Pms business. We just want to partner with them. So we can get a win win for the customer works for them for express. So that's number one is philosophy.

Brett T. White: We are working on different angles. Some are integration agreements; some are integration agreements plus co-marketing, where they can sell our product. We're working on a number of different opportunities. For example, we're working on arrangements where we partner on payments. So really just the big change, I think, is kind of getting partners comfortable that we don't want to be a practice management software company and we really want to have a win-win relationship. And then we agree to it, we commit to it, and then we actually demonstrate it. I think that's really what's moving the needle.

Tyler Maverick Radke: We are working on different angles. Some are integration agreements some our integration agreements plus co marketing, where they can they can sell our product.

Operator: Helpful. Thank you.

Tyler Maverick Radke: We're working on a number of different opportunities, we're working on arrangements, where we partner on payments.

Tyler Maverick Radke: So really just the big change I think is kind of getting partners comfortable that we don't want to be practice management software company.

Tyler Maverick Radke: And we really want to have a win win relationship and that's I think.

Tyler Maverick Radke: And then we agree to what we commit to it and then we actually demonstrated I think that's really what's moving the needle.

Speaker Change: Helpful. Thank you and follow up on the specialty medical it's good to see the.

Brett T. White: And follow-up on the specialty medicals, it's good to see the encouraging commentary there. Can you just remind us, you know, I imagine it's still pretty small, but any way of sizing that revenue base today? And then, you know, as you're going into the specialty medical vertical, I guess, is it fair to say that that might be slightly more discretionary in terms of, you know, consumer S&B spending than what you're seeing in kind? That's the last discretionary. And just any comments on what you're seeing, the macro environment, any changes across the customer base. Sure, so...

Speaker Change: Encouraging commentary there can you just remind us.

Speaker Change: Imagine, it's still pretty small, but any any way of sizing.

Tyler Maverick Radke: That revenue base today and then.

Tyler Maverick Radke: Going into this the specialty medical vertical I guess is it fair to say that that might be.

Tyler Maverick Radke: Slightly more discretionary in terms of.

Tyler Maverick Radke: Consumer SMB spending then.

Tyler Maverick Radke: And then what you are seeing kind of the core dental and veterinary or maybe it's less discretionary and just any comments on what youre seeing macro environment any changes across the customer.

Tyler Maverick Radke: Customer base. Thank you.

Speaker Change: Sure so.

Brett T. White: Sure, so, um... On the sizing, you know, historically, our mix of business has been dental, optometry, vet, and specialty medical. And we've always said that dental is, you know, just north of 50 percent. And we've now switched orders. So now we're dental, optometry, specialty medical, and then vet. So that gives you a little bit of an idea of the size.

Tyler Maverick Radke: On the sizing.

Tyler Maverick Radke: Historically, our mix of business has been dental.

Tyler Maverick Radke: Opto vet and specialty medical and we've always said that dental is just north of 50%.

Tyler Maverick Radke: We've now switched orders in our dental optometry spec.

Tyler Maverick Radke: Specialty medical and then that so that gives you a little bit of an idea of the size.

Tyler Maverick Radke: But we Havent, we havent reported revenue mix it.

Brett T. White: But we haven't, you know, we haven't reported revenue mix. It is our, especially medical, is our fastest growing segment in ARR. And then as far as discretionary versus, you know, subject to economic trends, you know, the four where we're really focused, physical therapy, medical aesthetics, plastic surgery, and primary care, I think physical therapy and primary care are not discretionary. If you need the services, you go and get them. Medical aesthetics and plastic surgery, you could argue, are discretionary, but they're very, very profitable businesses.

Tyler Maverick Radke: It is our especially medical is our fastest growing.

Tyler Maverick Radke: Segment in an E R R.

Tyler Maverick Radke: And then as far as discretionary versus you know subject to.

Tyler Maverick Radke: Economic trends.

Tyler Maverick Radke: The four where we're really focused physical therapy medical aesthetics plastic surgery primary care.

Tyler Maverick Radke: Think physical therapy in primary care are not discretionary.

Tyler Maverick Radke: The services you go and get them.

Tyler Maverick Radke: Medical aesthetics and plastic surgery, you could argue.

Tyler Maverick Radke: Our discretionary, but they're very very successful businesses. So.

Brett T. White: So, you know, we're early in this space, you know; we don't have years of data to look at here and see how trends move, but those businesses are very successful, and they're doing well, and they're choosing Weave, so that's terrific.

Tyler Maverick Radke: You know were.

Tyler Maverick Radke: We're early in this space, we don't have years of data to look at here and see how trends move, but those businesses are very successful and they're doing well and.

Tyler Maverick Radke: Then there are choosing leap so that's terrific.

Speaker Change: Thank you.

Speaker Change: Thank you there are no further questions at this time I'd like to hand, the floor over to Brett White for any closing comments.

Operator: Thank you. There are no further questions at this time. I'd like to hand the floor over to Brett White for any closing comments. Okay, well, thank you all.

Brett T. White: Okay well. Thank you will thank you again, everyone for your continued support and thank you to the we've team for delivering yet another terrific quarter.

Brett T. White: OK, well, thank you. Thank you again, everyone, for your continued support. And thank you to the Weave team for delivering yet another terrific quarter.

Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.