Q4 2024 Weave Communications Inc Earnings Call
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Greetings and welcome to the weak communications Q4, and full year 2024 earnings conference call.
At this time all participants are in a listen only mode.
<unk> and answer session will follow the formal presentation.
If anyone should require operator assistance. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
Now my pleasure to introduce your host.
Speaker Change: Mark Mcreynolds head of Investor Relations. Thank you Mark.
Speaker Change: Thank you, Matt Good afternoon, and welcome to <unk> fourth quarter and fiscal year 2024 earnings call with me on today's call are great White, CEO, Colin Taylor, CFO and Jason Kristian EPS.
Speaker Change: During the course of this conference call, we'll make forward looking statements regarding the anticipated performance of our business.
Speaker Change: These forward looking statements are based on management's current views.
Speaker Change: Any expectations to sell certain assumptions.
Speaker Change: And are subject to various risks and uncertainties described.
Speaker Change: We disclaim any obligation to update or revise any forward.
Speaker Change: On today's call, we will discuss certain non-GAAP metrics that we believe.
Speaker Change: Right.
Speaker Change: And but otherwise noted all numbers, we talk about stable.
Speaker Change: A reconciliation to comparable GAAP metrics can be found in today's earnings release.
Which is available on our website.
Speaker Change: She form 8-K furnished with.
Speaker Change: Cool.
Speaker Change: Well, thank you Jason.
Speaker Change: On our Investor Relations website investors <unk> com.
Speaker Change: I will now turn the call.
Speaker Change: Thank you Mark and thanks to everyone joining us today.
Speaker Change: 2024, with the Europe remarkable progress and transformation for wheat.
Speaker Change: I'm excited to share key financial and strategic highlights from the past year as well as our vision for 2025.
Speaker Change: We think that to create better health care experiences for patients and the practices that sir.
Speaker Change: Our goal is to make every interaction with a health care provider simple seamless and pop.
Speaker Change: For SMB healthcare practitioners, managing a small health care business, while delivering quality patient care is challenging.
Speaker Change: We've streamlined the operations, making it easier for providers to focus on what matters most caring for their patients.
Speaker Change: Our vision is to elevate the patient experience through a unified platform that improve business operation, enabling health care professionals to focus on patient care and achieve their dreams.
Speaker Change: Instead of a fragmented set of tools <unk> offers an AI powered solution that integrates communication scheduling forms payments and more.
Speaker Change: Yeah.
Speaker Change: Through authorized and supported integrations with leading practice management systems, we unlocked deeper functionality without adding complexity. These.
Speaker Change: These integrations enable practices to automate and personalized patient communication, while embedding Fintech solutions.
Speaker Change: Tech to pay extra pay online bill pay and payment plans directly into the communication workflows.
Speaker Change: Streamlining payment payment processes, we've accelerated collections reduces write offs and improves practice profitable.
Speaker Change: Technology isn't just about efficiency and revenue growth for health care practices.
It's a key factor in attracting and retaining top talent.
Speaker Change: 61% of practitioners agreed that hiring high quality employees, it's easier when their practice leverages. The latest office technology, and almost 70% say that retaining great staff has significantly improved with modern tools in place.
Speaker Change: Investing in the right technology enhances the workplace experience and reduces burnout.
Speaker Change: We used platform gets practices the competitive edge not just in patient engagement and payment, but in building strong successful teams.
Speaker Change: By helping health care practices attract engage and retain patients we've enables providers to focus on what they do best delivering excellent care, while growing their business.
Speaker Change: For many of their practices as a lifelong dream and wave is here to help them achieve it.
Speaker Change: <unk> operations, reducing burdens and empowering them to build thriving patient centered practices.
Speaker Change: The dental optometry veterinary and specialty medical verticals, we serve give us access to an addressable market that we believe exceeds $7 billion in the U S alone.
Speaker Change: Before Alan shares more details about our financial performance I wanted to share a few key highlights.
Speaker Change: In Q4, 'twenty four we delivered another outstanding quarter with strong revenue growth of nearly 19% and continued improvements of both profitability and free cash flow.
Speaker Change: Gross margins improved again for the 12th consecutive quarter, reaching 72, 6%.
Speaker Change: Q4 also marked our second consecutive quarter of positive operating income, resulting in full year profitability for the first time in these tests.
Speaker Change: We achieved $6 $1 million of free cash flow in Q4 more than doubling year over year, and representing a free cash flow margin of 11%.
Speaker Change: We produced free cash flow of $10 4 million for the year, representing nearly 60% year over year Greg.
Speaker Change: Finally, we're very pleased to have exceeded the high end of our revenue and profitability guidance, we gave a year ago. These.
Speaker Change: These results underscore the strong market demand for our solutions driven by the disciplined execution and a clear commitment to efficient growth.
Speaker Change: At the start of 2024, we identified several key focus areas to open up and expand new vectors of growth, including expanding into specialty medical verticals strengthening integration partnerships enhancing solutions for multilocation practices.
Speaker Change: Elevating payments as a core component of our product and delivering AI powered innovations.
Speaker Change: Today, alongside our financial performance I'm excited to share the significant progress we've made in each of these areas.
Speaker Change: In 2024, we laid the groundwork for success and we're already seeing strong early traction.
Speaker Change: As a result in 2025, we will be expanding these initiatives and investing to further accelerate momentum.
Speaker Change: Let me provide some additional color into each of these key growth vectors.
Speaker Change: In 2024, we identified a set of specialties within the SMB medical vertical at strategic expansion opportunities revenue from specialty medical practices led by primary care Med Spa plastic surgery and physical therapy grew at twice the rate of the overall company revenue in 2024.
Speaker Change: Specialty medical remained our fastest growing market segment in Q4 with more active medical locations added than in any previous period.
Speaker Change: Our momentum in this space was fueled by the release of new authorized integration with practice management software, including E. Clinical works Athena health, Dr Crow and Nextgen, expanding our reach and deepening the value of our platform.
Speaker Change: The SMB medical market in the U S spans 29 specialties, representing an addressable opportunity that is more than twice the size of the dental optometry and veterinary markets combined.
Speaker Change: With less than 1% market penetration has been berta fifth vertical we are only beginning to unlock that potential.
Speaker Change: We began 2025 of the launch of authorized integrations with prompt and practice fusion further expanding our presence in the medical vertical.
Speaker Change: At the same time, we are expanding our go to market efforts by broadening our target specialty increasing demand generation investments in advancing sales enablement programs.
Speaker Change: These initiatives will accelerate our growth and high potential medical specialties, and solidify <unk> position as the category leader, while expanding our market share.
Speaker Change: Turning to partnerships and early 2024, we launched a dedicated partnerships team led by an experienced executive to drive new growth opportunities. This investment expanded our serviceable market by over 100000 locations through new and enhanced integrations across all of our vertical markets.
Speaker Change: Our strategic partnership with Patterson Dental announced in June significantly broadened our market reach through co marketing co selling efforts, resulting in increased bookings and payments revenue in the latter half of 2024.
Speaker Change: Additionally, our commercial and integration partnership with <unk>, which launched this month marked a major milestone in our expansion into the physical therapy market.
Speaker Change: Since launch we have actively driven adoption through co marketing efforts engaging both shared customers and new prospects.
Speaker Change: To build on this momentum we are launching a dedicated partner sales team in 2025 that will work closely with our commercial partners by embedding within their go to market strategy. We aim to deepen collaboration increased engagement drive referrals and accelerate revenue growth.
Speaker Change: Given the strong early success of our partnership strategy, we will continue to invest in 2025, strengthening bulk sales and marketing resources to further expand our market presence and accelerate growth.
Speaker Change: Another key focus of our strategy. This year is expanding our mid market customer base.
In Q2 of 24, we launched an enterprise solution on our platform to meet the unique needs of Multilocation practices. We added a proven sales leader in Q3 to accelerate our progress and in Q4 affordable care the nation's largest dental service organization for tooth replacement shows we've as its platform of record for patient.
Speaker Change: Engagement in payments.
Speaker Change: In 2025, we are expanding our mid market sales capacity and increasing our marketing investments.
Speaker Change: These efforts will deepen engagement and expansion in existing accounts drive pipeline growth and position <unk> for sustained success in this segment.
Speaker Change: In line with our other focus areas, we are seeing strong traction in our payments business.
Speaker Change: In 2024, we appointed a general manager of payments and doubled the size of our operations and engineering teams, we integrated payments with some of the largest practice management systems in our space.
Speaker Change: <unk> opened dental and Patterson Eagle soft infused to deliver more streamline communication and collection workflows for our customers.
Speaker Change: We enhanced our payments product suite with payment plans and payment reminders, which help improve case acceptance and reduce outstanding accounts receivables for our customers.
Speaker Change: Finally payments are crucial for the financial health of any practice and we've payments is designed to make that.
Speaker Change: 74% of practices belief, they get paid faster by offering tests, the PE and 62%, saying it helps prevent overdue invoices affordable.
Speaker Change: Affordable care selected the <unk> enterprise solution to improve collections and reduce write offs with integrated digital payment solutions like tech to pay by.
Speaker Change: By leveraging mobile terminals flexible payment options and embedding payments into patient communication workflows affordable care practices, using we perceive significant revenue cycle management improvements.
Speaker Change: In 2025 payments will be a core element of our product and go to market strategy paint.
Speaker Change: Payments are now seamlessly integrated into our initial sale, reducing time to value for our customers. We are also investing in dedicated payments team focused on adoption and increasing usage within our customer base we.
Speaker Change: We believe that these resources will result in a scalable resilient payments business that is well positioned to drive continued growth in the coming years.
Speaker Change: Another important.
Speaker Change: [noise] aspect of our strategy last.
Speaker Change: Last year and last year, we made meaningful strides in this area.
Speaker Change: We launched our AI powered platform for both single and multi location practices.
Speaker Change: It's embedded throughout our platform to help streamline communications between the practice and its patients through a review responses E mail marketing creation message tagging and prioritization and voicemail transcription.
In Q4, we announced our AI powered calling costar product. This revolutionary technology transforms how health care practices analyze and leverage call data, enabling them to elevate patient experiences boost operational efficiencies and unlock new revenue streams.
Speaker Change: 88% of practices say technology is crucial to delivering a great patient experience.
Speaker Change: In 2025, we will continue advancing AI powered solutions to transform patient.
Speaker Change: Engagement and optimized complex practice operations.
Speaker Change: By automating workflows and enhancing communication, we've is leading the way and intelligent automated healthcare solutions, making our platform an essential tool for the modern health care practice.
Speaker Change: In summary.
Speaker Change: In 2024, we laid the foundation for expansion achieving early success across multiple growth areas in.
Speaker Change: In 2025, we will continue making disciplined strategic investments, where we see the greatest opportunity and a clear path to winning new business.
Speaker Change: Medical vertical markets mid market partnerships payments and AI.
Speaker Change: The traction we gained in 2024 reinforces our confidence that these investments will strengthen our market leadership and unlock new revenue streams.
Speaker Change: With a strong team a clear vision and proven ability to execute we have us well positioned to accelerate growth and drive long term success.
Speaker Change: Finally, we've continued to earn recognition for our dedication to delivering exceptional customer experiences and the outstanding performance of our team and our platform.
Speaker Change: In Q2's Winter 2025 report, we ranked first of 23 categories and was once again named the leader in the grid or patient relationship management we.
Speaker Change: <unk> was also selected as an ink power partner Award winner.
Speaker Change: We are committed to fostering an exceptional workplace and wave was named a top workplaces culture excellence winter in 2024 for innovation employee appreciation employee wellbeing leadership and compensation and benefits.
Speaker Change: In closing I am deeply proud of but we have teams accomplishments of the past year, we achieved robust topline growth advanced profitability and introduce groundbreaking products that address the evolving needs of our customers. These results highlight our unwavering focus on delivering value and driving innovation.
Speaker Change: As I sit here today I am more confident in our opportunities and outcomes. Then I was just 12 months ago.
Speaker Change: A heartfelt thank you to our customers partners team members and shareholders for their continued trust and support.
Before I turn the call over I'd like to take a moment to address the announcement, we made earlier today.
Speaker Change: Our Chief Financial Officer, Alan Taylor will be retiring at the end of this quarter as.
Jason Christiansen: As part of a planned succession, Jason Christiansen, <unk>, Vice President of Finance, who will.
Jason Christiansen: We will be replacing <unk>, new Chief financial Officer, and will join the executive team upon Alan's retirement.
Jason Christiansen: I would like to thank Alan for his significant contributions to the company during.
Jason Christiansen: During his nine years that we built our finance function and guided we've along the journey from startup to successful public company.
Jason Christiansen: I want to express my gratitude for his partnership and for his commitment to ensuring a smooth transition before he embarks on his well deserved retirement.
Jason Christiansen: I've had the privilege of working closely with Jason throughout his four year tenure.
Jason Christiansen: His extensive experience in our business understanding of our strategy and deep insights into our customers make him the ideal successor.
Speaker Change: Personally been served as the CFO for over 20 years I am confident in Jason's abilities to continue to scale.
Jason Christiansen: And drive continued growth and performance for many years to come.
Ed: With that I'll turn the call over to Ed.
Ed: Thanks, Brett and good afternoon, everyone.
Ed: Great.
Ed: Vehicle.
Ed: Last nine years and to work with <unk>.
Ed: I'm looking forward to the next stage.
Ed: And I have enormous confidence in G III.
Ed: Jason has extensive financial.
Ed: Experienced leadership.
Ed: Our IPO and last few years exploration.
Ed: In addition to leading financial planning and analysis, Jason has played a central strategic corporate initiatives, including.
Ed: Technology.
Ed: And as all of our payments business strategy.
Ed: Yes.
Ed: Jason deep understanding is.
Ed: This aligns with our mission and as the volumes of our core values and mission well suited for this role.
Ed: Jason will join us for Q&A.
Ed: Periods of months.
Ed: Starting with Q4.
Ed: Quarter and continued to execute well across the board in Q4, we delivered revenue of $54 2 million.
Ed: Reflecting nearly 19% growth year over year exceeding the midpoint of our guidance by $1 1 million.
Ed: Four 2%.
Ed: Revenue growth was driven by new customer acquisitions.
Ed: Sales and ongoing momentum in our specialty.
Ed: It continues to grow rapidly.
Ed: Notable successes were achieved in one of the primary care medicines plastic surgery, and physical therapy verticals, our net revenue retention rate of 90%.
Ed: 96 last year. This reflects positive contributions from key customers and price adjustments for additional functionality.
Ed: Customer growth and <unk>.
Ed: Throughout 2024.
Ed: Gross revenue retention.
Ed: It remains strong.
Ed: With 91% in Q4, which is a minor decreased 20 basis points from Q3, 2020 quarter and 30 basis points from a year ago.
Ed: Our <unk> consistently reached between one 4%.
Speaker Change: Are you positioning us as a top performance performers.
Ed: Cash.
Ed: Turning to operating results I'll be referring to non-GAAP figures unless otherwise stated in Q4 gross margin increased to 72, 6%, representing a 290 basis point increase year over year.
Yes.
Ed: Sequentially.
Ed: Our total operating expenses as a percentage of revenue improved 69% this quarter.
Ed: Down from 73% in Q4, 2023, reflecting disciplined cost management and operational efficiencies.
Ed: The biggest improvement in general and administrative expenses, which were $9 $3 million or 17%.
Ed: Correct.
Ed: Down from 19% of revenue last year sales and marketing expenses came in at $20 million for 37%.
Ed: Slight decrease 38%.
Ed: At the same period last year.
Ed: Search and development expenses for the quarter totaled $8 3 million.
Ed: <unk> represented 15% down from 60% of.
Ed: Revenue.
Ed: These improvements.
Ed: On efficiency and productivity.
Ed: In Q4, we achieved our second consecutive quarter of non-GAAP operating income with $1 8 million.
Ed: Yeah.
Ed: A $3 5 million last year.
Ed: And $800000.
Ed: A core tenet of corresponding operating income margin of three 3% significantly.
Ed: Operating loss margin of three 8% last year.
Ed: Our net income was $2 $4 million or <unk> <unk> per share based.
Ed: Based on 72.
Ed: Million weighted average shares outstanding.
Ed: Reflecting a $3 2 million.
Ed: Year over year.
Ed: Adjusted EBITDA for Q4 was $2 6 million.
Ed: A premium from a $3 $4 million.
Speaker Change: Due to revenue growth and operational efficiencies.
Ed: Turning to the balance sheet and cash flow we ended the year.
Speaker Change: $1 million in cash and short term.
Ed: Up from $98 2 million last quarter.
Ed: Cash flow generated from operations in Q4 was $6 7 million, a $2 $9 million improvement year over year.
Ed: Free cash flow was $6 $1 million in the fourth quarter, representing year over year to $190.
Ed: Particularly pleased with profitability and free cash flow process.
Ed: Equally important.
Ed: We anticipate operating income to free cash flow will remain positive for the full year 2020, So Q1 will likely show free cash flow due to the timing of the payout.
Ed: Losses, and certain one time.
Ed: Before reviewing our guidance I will provide a brief recap of full year results. In 2024 total revenue grew 20% to $4 $3 million to strictly entertainment revenue grew 21%.
Ed: Last year, our gross margin improved 71, 9%.
Ed: Up from 67% last year, our operating margin improved to a positive 4%.
Ed: We delivered first year with the economy.
Ed: The company is a.
Ed: A significant improvement originated six 8% margin.
Ed: We made substantial progress on free cash flow.
Ed: $10 $4 million up from $6 $5 million last year, we ended the year with nearly 35 customer locations on our platform.
Ed: Reports.
Ed: Okay.
Ed: Up 15%.
Ed: Sure.
Ed: Our progress this year and we'd like to thank all of our team members our customers partners for their contributions throughout the year.
Ed: Yes.
Speaker Change: I'd like to fragrance color regarding our outlook for 2020.
Ed: As we outlined in 2024, we continue to see.
Speaker Change: Our pricing strategy to align with market dynamics.
Speaker Change: While we will continue to make adjustments do.
Speaker Change: Do not exist.
Speaker Change: At the same magnitude of price changes in 2020.
Speaker Change: We implemented in 2020.
Speaker Change: The most significant pricing that occurred in Q2.
Speaker Change: Making Q2, our toughest year over year comparisons.
Speaker Change: Of 2020, as we lap the effects of that cohort. However, excluding these exits just speaking.
Speaker Change: Our core business in 2020 product to exceed.
Speaker Change: As Greg mentioned, we are in.
Speaker Change: We are in.
Speaker Change: Debt payments.
Speaker Change: Yeah.
Speaker Change: Innovation workflow.
Speaker Change: Workflow based solutions, which we believe will unlock region.
Speaker Change: And expanding wallet share in the next few years.
Speaker Change: Additionally in 2020.
Speaker Change: Yes.
Speaker Change: Just curious we transformed partnerships and made great strides accomplishing market business we.
Speaker Change: We will we are still in its early stages.
Sure.
Speaker Change: And we're encouraged by the Green shoots we see but we're not.
Speaker Change: Contribution in the first half.
Speaker Change: Okay.
Speaker Change: From these new vectors of growth.
Speaker Change: On the expense side 25 will be the first year that we will be required to comply with section four quarters.
Speaker Change: The Sarbanes Oxley Act.
Speaker Change: And as a result, we are expecting an increase in compliance.
Speaker Change: This compares to Denmark.
Speaker Change: To add more color on expense excuse no factors that result in sequential increase Q1, including three <unk>.
Speaker Change: Zero.
Speaker Change: Benefits.
Speaker Change: And the timing of the annual products, which are more hedged in Q1.
Speaker Change: For the first quarter of 2020.
Speaker Change: Total revenues reached $54 million to $65 million.
Speaker Change: And non-GAAP operating needs to be.
Speaker Change: $7 million.
Speaker Change: Sure.
Speaker Change: For the full year 2025, we expect total revenue to be the range of $213 billion to 200 stores.
Speaker Change: We expect the range for full year 2025, non-GAAP operating income to be $2 million to $6.
Speaker Change: We expect that.
Speaker Change: We shipped approximately 75 9 million shares.
Speaker Change: Sure.
Speaker Change: As a wrap things up.
Speaker Change: Purchase costs need to express a credit incredibly fortunate.
Speaker Change: Sure.
Speaker Change: <unk> for us.
Speaker Change: This last chapter Bruce.
Speaker Change: Bruce.
Speaker Change: Opportunities founders.
Speaker Change: Frankly, Rob Cherry.
Speaker Change: Their remarkable people acute boosters and the success of wheat, <unk> jewelry Sciences group and their vision and determination to do something extraordinary.
Speaker Change: <unk> is one of the most peers and optimistic people.
Speaker Change: Grateful for that.
Speaker Change: The opportunity to gateway.
Speaker Change: Finance team as best in class committed committed and a delight to work with.
Speaker Change: The investors and board games sharpening.
Speaker Change: Great sense measures, what we do we think about it.
Speaker Change: Health care practitioners.
Speaker Change: Take care of people our people on our platform.
Speaker Change: That's an important goal.
Speaker Change: According to watch will be the case.
Speaker Change: We've been able to tap into a market with a great degree.
Speaker Change: The greatest portion of which is still.
Speaker Change: So any retirement user can look forward to spending more time.
Speaker Change: Paula.
Speaker Change: Every family member or loved one of those.
Speaker Change: We make their own special contributions to our success through the lowest tax bifurcation support I'm grateful to Paul would be extended.
Speaker Change: Recession.
Speaker Change: Of making it up.
Speaker Change: Paul and I look forward to spending more time together.
Speaker Change: And with our 16 grandchildren's, Jordan clearly content off of.
Speaker Change: Plenty.
Speaker Change: Brad can this great management team in place will not disappear.
Speaker Change: <unk>, who is already wonders.
Speaker Change: Because.
Speaker Change: Capacity performance for 40 years looking ahead I am very confident we will continue to capitalize on new opportunities because the entire organization is passionate about our mission and we will be disciplined and execute.
Speaker Change: We use exceptionally well positioned to grow and succeed.
With that I'll turn the call over to the operator for Q&A.
Speaker Change: Great. Thank you at this time, we will 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.
Speaker Change: You May press star two to remove yourself from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please pull for questions.
Speaker Change: First question here is from Alex Sklar from Raymond James. Please go ahead.
Speaker Change: Great. Thank you Alan.
Speaker Change: Alan Congratulations on the retirement and Jason on the new role.
Speaker Change: First question for me just on the 2025 guide it implies kind of a step back and the rule of framework I know, we saw something similar with how you approach the 'twenty 'twenty four outlook, but could you just provide some more color on what you're factoring in from an incremental investment perspective, and when we could expect those to contribute to growth.
Speaker Change: I'd like to say, Hey, I'll start so we made it clear last year this quarter.
Speaker Change: Sure.
Towards growth.
Speaker Change: So the investment profile with all of them.
Speaker Change: In terms of.
Speaker Change: The partnerships that new markets, we're going into.
Speaker Change: Especially medical markets.
Speaker Change: Our investments in AI.
Speaker Change: Those are the areas, where we will continue to invest so that we can lay the groundwork for continued growth.
Speaker Change: So I think fairly consistent with what we can say.
Speaker Change: In terms of the way we're planning.
Speaker Change: During the quarter.
Speaker Change: Yes, Alex maybe I'll add to that so I know the word investments can be at Gary works, sometimes giving guidance. So let me let me just give a little color.
Speaker Change: In each of these vectors of growth, where we're really starting to see the green shoots growing in order to really capture the opportunity to accelerate them each of them need the team and so so instead of having the existing team turned out.
Speaker Change: Work on partnerships or work on payments, we're actually setting up dedicated teams theyre small teams to get started and to grow. So we're not we're not going crazy.
Speaker Change: We're just making very targeted small team investments in each one of these growth vectors to really get the kind of traction that we think we can these are really important multiyear growth opportunities and so we're seeing those now with some teams to really get them going.
Speaker Change: We mentioned, we're going to be more deliberate more profit next year than we did this year.
Speaker Change: Going to see growth accelerate in the second half so.
Speaker Change: Don't be scared by the investment worse. It's just it's just some few teams, but we're we're we're levering those up this quarter.
Speaker Change: So really to hit the end of the year to hit the second half of the year at scribe.
Speaker Change: Okay. Thank you both for that color just one maybe follow up then on one of those growth vectors payments. So you've had a new head of payments in place now its top priority youre talking about ceding more of the team. There can you just kind of update us on where that solution stands in terms of how accretive it has been the growth.
Speaker Change: And just given some of the learnings from Patterson.
Speaker Change: How do you view the payments opportunity for 2025 versus 24.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: The key for us for payments.
Speaker Change: Getting.
Speaker Change: The workflow payments.
Speaker Change: Integrated into the office workflow and so much of this year was <unk>.
Speaker Change: <unk> ahead of payments actually JMP, Jason was our acting head of payments for the first half of the year.
Speaker Change: And then.
Speaker Change: We already have the payments and they've really been assembling the team put together the risk team we've doubled the interest side with the engineering. We've built in some new integration flows we're working with ACI to to bring their payments over to our platform.
So I think we've got all that.
Speaker Change: The pieces in place and now the rest of the work really is.
Speaker Change: Building out the workflows.
Speaker Change: And then the other major change we've made this year is we've changed the sales compensation model. So starting January all of our sales.
Speaker Change: Executive now have payments number they all get paid on closing payments and they also get paid on payment residuals. So we've changed the go to market model. We've changed the sales model. We've got many of the integration is done there is still work to be done I think we'll be working on the workflow for for quite a while but we make incremental improvements there we're getting.
Speaker Change: Traction with new with new ads, we're getting traction with partners. So I would say.
Speaker Change: Everything is proceeding nicely and it will definitely continue to have an accretive effect in.
Speaker Change: In 2005 for both our growth and our margins.
Speaker Change: Alright, great. Thank you both.
Brent <unk>: Our next question is from Brent <unk> from Piper Sandler. Please go ahead.
Brent <unk>: Good afternoon, Alan it's been a pleasure working with you best of luck in retirement 16 Grand children. It sounds like Youre going to remain pretty active adjacent congrats on the new role much deserved maybe Alan will double click into the guide if I. If I go back to your initial guide for 'twenty three was 11%.
Speaker Change: Actual was $19 nine 'twenty 'twenty four initial guide was 15 actual growth 19.9 are you trying to flag the 15% growth is some near term challenges you see to growing in 2025 or should we think about the guide is.
Brent <unk>: Kind of a typical conservative amount of Av.
Speaker Change: Conservatism in the guide this year, just trying to parse that out if there's something specific you are trying to flag to us or if this is kind of the normal cadence of guidance he give thanks.
Brent <unk>: So first of all thank you very much.
Brent <unk>: Well.
Brent <unk>: Yes.
Brent <unk>: So the only thing that I would point out.
Brent <unk>: We mentioned.
Brent <unk>: Prepared remarks.
Brent <unk>: We do that.
Brent <unk>: <unk> costs in Q2.
Brent <unk>: Other than that.
Brent <unk>: The same philosophy.
Brent <unk>: And so I appreciate that setup.
Speaker Change: You mean to this conversation in terms of the weighted.
Brent <unk>: <unk>.
Brent <unk>: The only other thing I would add a degree.
Brent <unk>: We've been talking about these are these are pretty exciting.
Brent <unk>: Yes.
Brent <unk>: Very few minutes, if you guys marketing each quarter.
Brent <unk>: Yes.
Brent <unk>: Group's condition.
Brent <unk>: Yes.
Brent <unk>: Status quo with respect to EBITDA.
Brent <unk>: One quarter.
Brent <unk>: Q2.
Brent <unk>: Got it very clear so the Q2 compare is the only kind of thing kind of factoring in to the Guy that's super helpful color Brett for you.
Brent <unk>: You are clearly excited by these 45, new initiatives, especially medical partner payments. When do you think those can start to actually drive an acceleration in growth I asked because we've had good stabilization in growth the last two years.
Brent <unk>: When do you think the green shoes could be material enough to drive actually an acceleration in top line.
Brent <unk>: Yes, Thank you Brent.
Brent <unk>: So in some areas, it's already happening, but you kind of can't see it yet.
Brent <unk>: I think one of the the.
Brent <unk>: <unk> I wanted to make sure that came through.
Brent <unk>: As Alan mentioned, we're lapping our price adjustments from last year, which will happen in the final quarter in Q2 and were not planning the same level of price adjustments in our 25 guide so absent the price increases we believe our core business will grow faster and 25 10 and 24. So I think there are already the number it is already showing.
Brent <unk>: Up in the numbers.
Brent <unk>: In the business that we really look at and then I think the second half is when we'll see.
Brent <unk>: Market acceleration.
Brent <unk>: Relative to these initiatives definitely on the partnership front definitely on the Multilocation front.
Brent <unk>: Secondly on the specialty medical pharmacy, so I think.
Brent <unk>: Yes.
Brent <unk>: If we're able to screen through the pricing adjustments I think you'd be seeing more of a metal, but net of all that I think you'll see it mostly in the second half.
Thank you.
Brent <unk>: Absolutely. Thank you yes. Thank you.
Brent <unk>: Sure.
Speaker Change: Next question is from Parker Lane from Stifel. Please go ahead.
Hey, guys. Thanks for taking the question and Alan I'll Echo my congrats on the successful career environment here.
Speaker Change: Maybe the question is for bread here when you look at the multi location and enterprise motion how much of that is aimed largely at the dental vertical where you have the biggest exposure in.
Speaker Change: The history, there versus the broader swath of the go to market motion.
I would I would say currently if you look at our.
Speaker Change: Pipeline and our focus areas, it's primarily dental and.
Speaker Change: It's just because we've got the brand we've got the product.
Speaker Change: We've got the partnerships with the Big practice management software vendors and frankly, that's where we got the most imbalance so.
Speaker Change: We've totally changed the go to market motion, we've totally changed the team we're going to be changing the events. We go to.
Speaker Change: It's a major.
Rebuild of that function.
Speaker Change: And.
Speaker Change: It's off to a great start.
Speaker Change: Kind of like the rest of our <unk>.
Speaker Change: SMB business will start in dental get our traction there and then and then move into probably other areas.
Speaker Change: Dov dental Optometry, and then specialty medical.
Alan Taylor: Understood and then Alan I know you referenced.
Alan Taylor: The pricing increase last year impacting <unk> when you look at some of the AI functionality youre, bringing things like call recording et cetera.
Alan Taylor: Why isn't there an opportunity to take more price on.
Alan Taylor: On those feature sets that youre, bringing to the market here in 2025 or is that something you think about longer terms or simply just customer success.
Alan Taylor: Differentiating the platform.
Alan Taylor: Yes, I think it will be.
Alan Taylor: AI functionality.
Alan Taylor: A key.
Alan Taylor: Capability call intelligence for instance.
Alan Taylor: Well, we're seeing that uplift.
Alan Taylor: When you're talking about pricing specifically.
Alan Taylor: The pricing on existing products with the existing customers.
Alan Taylor: Kind of separating that out a little bit and so we will get some.
Alan Taylor: On price increase this year.
Alan Taylor: But that does not limit what we can do.
Alan Taylor: AI products and sell products.
Alan Taylor: Presently being sold will be introduced.
Speaker Change: Can I add something to that.
Speaker Change: We also don't want to do price increases, but to inhibit our ability to move customers onto the new platform, we're seeing greater adoption.
Speaker Change: Yes.
Speaker Change: Better.
Speaker Change: Better customer response from that platform and we know that's something that we want to move customers towards and so we're trying to be very careful and cautious in how we how we balance those two in 2025.
Speaker Change: Understood. Thanks for the feedback guys.
Robert: Thanks Robert.
Speaker Change: Next question is from Colin Radke from Citi. Please go ahead.
Kelly: Hi, This is Kelly on for Tyler Congratulations echoing echoing my congrats for Alan on your retirement and thanks again for the question.
Speaker Change: NR uptick nicely through the year I, just love to hear any directional comments for expectations on NR transfer FY 'twenty five.
Speaker Change: So <unk> will continue.
Speaker Change: The improvement.
Speaker Change: Again, we have with NR.
Speaker Change: And are included to.
Speaker Change: Two pricing last year inkjet seems incredibly accomplished level right now.
Speaker Change: <unk> sales are doing well and so.
Speaker Change: Q.
Speaker Change: Sectors that should help us.
Speaker Change: I think the port for August policy.
Speaker Change: Sure I understand.
Speaker Change: Our offering on a location basis and so some of the NR and we lap.
Speaker Change: Andrew.
Speaker Change: And so some of them we.
Speaker Change: We take upfront.
Speaker Change: <unk> features.
Speaker Change: This is juan.
Speaker Change: And yet we still see opportunity to continue to improve as we can.
Speaker Change: Penetration within our customer base, and we continue to improve the opportunities presented.
Speaker Change: So products like Colin Taylor.
Speaker Change: Certification.
Speaker Change: Okay.
Speaker Change: And just one point I would add just clarification, we measure and IRR on a location basis. So we don't measure it on a logo basis. So for example.
Speaker Change: As ACI at locations over time.
Speaker Change: That does not positively effect.
Speaker Change: <unk>.
Speaker Change: ACI logo.
Speaker Change: So I think that's a really important one to understand so.
Speaker Change: And ACI location is the same as any any other and theyre measured year over year on the individual location basis, not as a number of locations added by our logo.
Speaker Change: It makes total sense. Thanks, and then if I can slip in one more I'd love to hear any comments on demand trends in the quarter and then keeping in mind that comment that you are more confident than 12 months ago.
Speaker Change: But just noticing that software revenue did have a slight DSL offers three Q.
Speaker Change: What drove the revenue upside and the incremental confidence thank you.
Speaker Change: Yes so.
At the beginning of the year beginning of 'twenty four we laid out our plan.
Speaker Change: All of our focused areas.
Speaker Change: Throughout the year.
Speaker Change: We just kept.
Speaker Change: Adding really good leadership and they were tapping into these these veins of opportunity and producing results and so.
Speaker Change: Lots of Green shoots lots of Green lights are coming out of our strategic plan for 2004. So.
Speaker Change: As I was preparing for our kickoff our employee kickoff I kind of looked at the same stage 12 months later how's the view from the state and it was just a lot better because we have a lot more vectors to pursue and so really the question is how.
Speaker Change: <unk> do we want to pursue them on an investment basis. So we're being.
Speaker Change: We're being measured in our in our investment we're putting full teams behind each one of these opportunities and.
Speaker Change: Demand was was terrific in Q4 and so.
Mike: For Mike the.
Mike: Things look pretty pretty darn good.
Mark McReynolds: And our next question is from Mark <unk> from loop capital markets. Please go ahead.
Mike: Yes.
Mark: Hi, Thank you for taking my question Brett.
Mike: First of all Alan Congrats on your retirement here.
Mike: A question for you Brett I was wondering I appreciate your comments regarding your investment priorities in the coming year with respect to the sales enablement initiatives.
Mike: And your presence in specialty companies specialty medical.
Is that strategy to go deeper in the current say handful of sub segments that you currently plan or is the plan to maybe expand into other sub segments.
So.
Mike: Kind of the way the model works.
Mike: We look at demand.
Mike: We look at product market fit and then we design our integration.
Mike: Timing or integration rollout based on those factors and so really where we really start getting traction in new verticals as.
Mike: When we build the integration so we build our integration roadmap, we start rolling out at <unk> and then the go to market follows right behind that and the concept of sales enablement is let's not try to make our old.
Mike: Scripts and the old verticals work and the new vertical let's actually make them very very tailored very pointed so our sales teams get more efficient more quickly.
Mike: The previous question was.
Mike: Why the optimism.
A year ago.
Mike: We had.
Mike: We were looking for integrations to right. We were we were trying to get partners to sign up with us. So we can price the integration now where exactly flipped now we have more partners, who want to partner with US more integration agreement signed then we have actually have the capacity to deliver so we're we're actively.
Mike: Hearing more on the engineering side, so we can meet the demand so.
Mike: Identify the verticals that are the closest product market fit build integrations tailor the go to market motions to that integration or to that vertical and then.
Mike: And then unleash the teams.
Speaker Change: Great. Thank you and then with respect to your AI products, specifically assistant and KOL intelligence. Just wondering if you could just provide some additional color on how you plan to actually monetize those products.
Speaker Change: So they are currently using cricket. So currently they are included in the bundle.
Speaker Change: And then also we can sell them an upsell so call intelligence.
Speaker Change: An up sell or it's an additional cost and the higher bundle and I think the results. We've seen recently is.
Speaker Change: Our new sales are more biased towards the higher end bundle, we kind of have the standard good better best bundling and Asps are coming up because our sales are more biased towards the higher bundled so so.
Speaker Change: Call intelligence is not a freebie.
Speaker Change: Some of the other embedded AI technologies come with the new we've experienced platform, but that's one of the ways that we're able to deliver value and therefore get price.
Speaker Change: Both the SMB segment, but.
Speaker Change: Importantly on the Multimarket segment for Multilocation segment.
Speaker Change: Great. Thank you.
Speaker Change: This concludes the question and answer session I would like to turn the floor back to Brett White for any closing comments.
Speaker Change: Yes.
Speaker Change: Well.
Speaker Change: Another big Thank you to Alan for all his years of commitment.
And just being a great partner and thanks to all of you for joining the call and thanks again to the entire week.
Speaker Change: <unk>.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Hum.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Scott.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: [music].