Q1 2025 Weave Communications Inc Earnings Call
Thank you very much.
Speaker Change: Ladies and gentlemen, greetings and welcome to the Weave First Quarter 2025 Financial Results. At this time, all participants are in a listenony mode. A brief question and answer session will follow the formal presentation.
Speaker Change: If anyone should require or pray the assistance due in the conference, please press star and zero on the telephone keypad.
As a reminder, this conference has been recorded.
Speaker Change: It is now my pleasure to introduce your host, Mark McReynolds, Head of Investor Relations. Please
Mark McReynolds: Thank you Ziko, good afternoon and welcome to Weave's first quarter 2025 earnings call.
Mark McReynolds: With me on today's call are Brett White, CEO and Jason Christensen, 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 on certainties as described in our SEC filings.
Mark McReynolds: We've disclaimed any obligation to update or revise any for the King's statements.
Mark McReynolds: Further, on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results.
Mark McReynolds: Unless otherwise noted, all numbers we talk about today will be on a non-GAAP basis.
Mark McReynolds: A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website and it is exhibit to the form 8K furnished with the SEC before this call.
Mark McReynolds: as well as the earning presentation on our investor relations website at investors.getweave.com.
Brett White: And with that, I'll now turn the call over to Brett.
Weave Commns
Brett White: Thank you, Mark, and thank you to everyone joining us today.
Brett White: Before I get to our Q1 financial and business highlights, I'm excited to share that we have signed a definitive agreement to acquire true luck, an agentic AI-powered receptionist in front desk automation platform.
Brett White: Together, we will unlock a future of intelligent autonomous workflows that reshape how health care practices operate, drive growth, connect with patients, and thrive.
Weave Commns
Speaker Change: Before diving into more detail about True Lard, I'd like to briefly introduce Weave to those of you who may be new to our story.
Brett White: Weave is a patient engagement and payments platform built for small and medium-sized health care practices.
Brett White: Our customers are skilled medical professionals, experts in healthcare, not business.
Brett White: Yet to succeed, they must attract new patients and sustain growth in increasingly competitive markets.
Brett White: Retain the patients they already have with effective communication and improved in-office interactions.
Brett White: Create a workplace that attracts and retains talent amid staffing shortages
and Overseas Operations and the Financial Health of their business.
Brett White: Practices are often left managing a fragmented mix of tools with limited IT resources, making it hard to streamline operations or scale effectively.
Brett White: This technology sprawl creates friction, slows growth, and pulls focus away from what matters most, caring for their patients.
Brett White: We've unified communication, scheduling, payments, and reviews into a single, easy-to-use platform.
Brett White: Built a scale from single-location practices to large multi-location groups, Weave offers centralized management, robust analytics, and authorized integrations with over 85 practice management systems.
Brett White: Our proprietary VoIP platform lets teams communicate from anywhere with the practice's trusted phone number
Brett White: Weave also embeds payment requests into communication workflows, which accelerates cash collections and improves treatment plan acceptance with flexible payment options.
Together, we're building a better California.
Brett White: We are focused on dental, optometry, veterinary, and specialty medical practices, which is a high value segment of the SMB market.
Brett White: The edition of TrueLark expands our addressable market to over $10 billion in the US alone.
Brett White: S&B health care practices face rapidly evolving demands from rising patient volumes to growing expectations for fast seamless digital experiences.
In this environment, workflow automation is essential.
Successful practices will adopt technologies built for modern care.
Brett White: Those technologies will enable 24-7 appointment booking and automated administrative tasks to free up time for staff and providers.
Brett White: This future centers patient care on meaningful interactions with routine operations running smoothly in the background
Brett White: True Lark is a virtual receptionist that enables fully autonomous patient engagement. It responds to miss calls, manages real-time scheduling, and answers common questions via text and webchat 24-7.
Brett White: True Luck provides an automated solution to boost lead conversion when calls are missed even after office hours.
Brett White: The result is fuller schedules around the clock patient engagement, improved case acceptance, and less time spent on the phone which drives greater practice profitability.
Brett White: and I'm Brett McReynolds. Thanks for watching. We'll see you next time.
Brett White: The acquisition of TrueLark will unite two companies with a shared mission, helping SMB health care providers run more efficient practices while delivering exceptional patient
Brett White: Our journey with TrueLark began as a partnership, and the opportunity for something greater became clear as we work closely together. We were immediately impressed by their leadership and the passion that their customers, including those shared with Weave, have for their platform.
Brett White: What drove our interest, and ultimately the acquisition, is the meaningful progress that they have made with appointment-based single and multi-location SMBs over the last four years.
Brett White: Trilark delivers measurable economic value to its customers, particularly in multi-location dental and med spa segments, where it has already achieved strong product market fit.
Brett White: We are requiring true art because of the strategic fit in our product roadmap with the complimentary aspects of our business.
Brett White: I'd like to highlight some key points of the acquisition thesis.
Brett White: First, while we've helped staff work more efficiently, true light fully automates routine tests around the clock without human intervention.
Brett White: Trularch Schiff's front desk focus from administrative tasks to higher impact patient centered engagement.
Brett White: 2nd, Trulac Unlocks, Additional Multi-Lunk Plugation, Product Functionally, and Expans are Mid-Market Customer-Based.
Brett White: Third, we're gaining a team of AI experts with deep SMB health care experience. The acquisition will immediately accelerate our product roadmap and increase our pace of innovation, keeping with the head of the market needs.
Brett White: Sherlock also presents a compelling cross-cell opportunity within Weave's existing customer base.
Brett White: Their technology is extensible to all verticals we serve and scales effectively across customers of all sizes.
Brett White: With the strength of our go-to-market engine, we see significant upside in expanding true likes reach across our business.
Brett White: Ultimately, this is a strategic acquisition that enhances our platform, accelerates our road map, expands our market opportunity, and strengthens our ability to win.
Brett White: In addition to the experienced leadership joining Weave from Troulart, we're also thrilled to welcome Abhi Sharma as our new Senior Vice President of Engineering.
Speaker Change: Abbey brings deep expertise in building and scaling high-performing engineering teams and delivering AI-driven innovation.
Speaker Change: His career includes leadership roles at Salesforce, Oracle, Amazon, and Microsoft, and most recently, he led R&D for Twilio's $4 billion communications business, scaling infrastructure to support hundreds of millions of messages annually while pioneering AI-powered comedy channel experiences.
Speaker Change: Under his leadership, we are accelerating our vision to deliver an intelligent, automated platform purpose-built for the future of healthcare.
Speaker Change: Next, I'd like to share an update on our quarterly performance and the momentum we see across the business.
Speaker Change: We delivered a strong start to the year and continue to make meaningful progress across our key growth vectors.
Speaker Change: We had strong demand and specialty medical, continued progress in mid market and solid performance in our payments business.
Speaker Change: Q1 revenue grew 18% year-over-year marking the 13th consecutive quarter of exceeding our guidance.
Speaker Change: Our gross margin came in just above 72%, 170 basis point improvement year over year, reflecting strong underlying unit economics and operational efficiency.
Speaker Change: We had a record quarter for sales across our medical segment, driven by a specially strong performance in Med Spa and plastic surgery with continued momentum in primary care and physical therapy.
Speaker Change: Our reach and product value continue to expand through authorized integrations with key medical systems of record.
Speaker Change: In Q1, we launched three new integrations, prompt, practice fusion, and veridine, which increased our integrated market by approximately 60,000 locations.
Speaker Change: We've already seen an increase in new sales to practices using these platforms with new deals and upgrades from prompt customers in Q1 outpacing all of full year 2024 combined.
Speaker Change: Our previously announced integrations in specially medical are playing a meaningful role in accelerating our expansion across specially medical verticals.
Thanks for watching!
Speaker Change: Finally, we've continued to be recognized for our commitment to delivering exceptional customer experiences and the strong performance of both our team and our platform.
Speaker Change: We've ranked in the top 50 on G2's 2025 Best Software Awards.
Speaker Change: In G2's Spring 2025 report, we've ranked first in 33 categories and was, again, named Leader in the Grid for Patient Relationship Management.
Speaker Change: and Brett White. I'm Brett White. I'll see you next time.
Speaker Change: In closing, I'm extremely proud of what the Weave team accomplished this quarter. Another quarter of solid growth driven by focused execution and innovation.
Speaker Change: As more customers look to streamline their front-office workflows and deep in patient engagement, Weave is delivering real measurable value.
Speaker Change: I also want to warmly welcome the true art team to Weave.
Speaker Change: As I reflect on our momentum, I'm more energized than ever about the road ahead and confident in our ability to continue to scale.
Speaker Change: Thank you to our customers, partners, team, and shareholders for your continued trust and support. With that, I'll turn it over to Jason.
Jason Christensen: Thanks, Brett. Good afternoon, everyone. I'm pleased to join you today and look forward to connecting with many of you in the quarters of ahead as we continue building strong relationships across the investor community.
Jason Christensen: I'll start by discussing our acquisition of True Lark and provide additional color on how it fits into our long-term financial picture.
Jason Christensen: We will acquire TrueLark for $35 million, comprising $25 million in cash and $10 million in equity, and we will be filing a registration statement with the SEC to register the shares issued as part of the consideration.
Jason Christensen: In addition to the purchase consideration, we have established performance-based equity awards tied to revenue milestones for the next two years. We anticipate the transaction will close in Q2.
Jason Christensen: I'm genuinely excited about what TrueLark brings to Weave, including a powerful AI-native platform, a team with deep technical expertise and compelling customer validation, especially among larger multi-location healthcare organizations.
Jason Christensen: ThroughLark is a high growth business that is making significant progress with dental service organizations.
Jason Christensen: The TrueLark team has been very scrappy with minimal go-to-market investment. As part of our integration strategy, we see a meaningful opportunity to extend TrueLark's reach in a single location and small group practices by leveraging our go-to-market engine.
Jason Christensen: Additionally, we see an opportunity to expand the markets they service and this puts another arrow in the quiver of our mid-market sales reps.
Jason Christensen: We'll be making targeted investments across two key areas. The first is in R&D.
Jason Christensen: which will be used to build additional true art integrations with practice management systems and to integrate with Weave.
Jason Christensen: The second is in sales and marketing, which will increase awareness, drive demand, and accelerate customer acquisition .
Jason Christensen: Even with these additional investments, we anticipate true art to be a creative to the bottom line in 2026.
Jason Christensen: I'm excited to welcome the true dark team to Weave. People in culture are critical to any successful acquisition and we believe they're strong alignment on both fronts.
Jason Christensen: Together, we share a clear vision for the future of intelligent automation and healthcare and we're confident that the combination of true-larks proven technology and weaves go to market strength will unlock lasting value for our customers and shareholders.
Weave Commns
Jason Christensen: shifting to Q1 results. We're off to a solid start in 2025 with steady execution across our go-to-market teams and continued strong performance and specialty medical mid-market
Jason Christensen: In our previous earnings call, we outlined the key growth sectors for prioritizing and investing in. In 2024, we leveraged existing resources.
Jason Christensen: to test our ability to win in each of these initiatives. The investments we are making in 2025 are all relatively small in the form of dedicated resources to focus on new avenues for growth.
Jason Christensen: We open the year with Q1 revenue of $55.8 million, which exceeds the midpoint of our February guidance by $1.3 million and represents 18.3% year-over-year growth.
Jason Christensen: Growth was broad-based, led primarily by continued strength in new customer acquisition and payment revenue. The fastest growing segment of new customer acquisition continues to be in the specialty medical vertical.
Jason Christensen: Specialty Medical Growth, again outpaced all other verticals as we set a new record for the number of medical locations added in one quarter.
Jason Christensen: In Q1, we made steady progress in accelerating revenue growth within our mid-market segment.
Brett White: As Brett mentioned, payment remains a strong growth driver, growing it more than twice the rate of total revenue and continuing to be accretive to the business.
Brett White: Retention Metrics held steady this quarter with NRR 98% and GRR in 91%, consistent with last quarter and our historical range.
Brett White: This reflects strong contributions from the adoption of our payments platform and highlights the durability of our customer relationships.
Brett White: Let's now turn to our non-GAAP operating results, which include one time, which exclude one time acquisition related costs tied to the true art acquisition and stock based compensation.
Brett White: Gross Margin was 72.1% in improvement of 170 basis points year over year. We saw 50 basis points sequential declining Q1 Gross Margin.
Brett White: Driven by partner integrations and elevated seasonality in our variable costs as customers usage of the platform increase significantly.
Brett White: Many of our customer locations have limited operations during the final two weeks of December , which led to a sharp rebound in messaging and call volumes and the associated costs in early Q1 as practices increase their usage of our platform to re-engage with patients.
Brett White: Sales and marketing expenses totaled $21.7 million or 39% of revenue. Sequentially, sales and marketing expenses increase due to the Q1 seasonality from the reset of payroll tax limits and benefits renewals taking effect.
Brett White: and from the addition of sales reps to support our 2025 growth initiatives in mid-market partnerships and specialty medical.
Brett White: Research and development expenses were $8.8 million or 16% of revenue.
Brett White: We continue investing in solutions and practice management integrations that streamline and automate customer workflows, which we anticipate to unlock monetization opportunities over time.
Brett White: General and administrative expenses were $9.7 million or 17% of revenue, an improvement year over a year from 18% in Q1, 2024.
Brett White: General and administrative expenses increased sequentially for the same seasonal factors outlined above. Additionally, we incurred and will continue to incur higher audit and compliance fees as discussed in our previous earnings call, as we prepare for our first year of needing to comply with Section 404B of the Sarbanes Oxley Act.
Brett White: Operating Income for Q1 was $39,000. This is $240,000 higher than the midpoint of our guidance and an improvement of $1.4 million year-over-year.
Brett White: Adjusted EBITDA for Q1 was $1 million, improving by $1.4 million year-over-year due to the revenue growth and operating efficiencies.
Brett White: Our capital position remained largely unchanged for Q1 and we ended the quarter with $98.2 million in cash and short-term investments.
Brett White: Upon closing, we will use $25 million of cash for the acquisition of true art.
Brett White: Cash used in operations was $200,000, and free cash flow was negative $1.1 million consistent with our expectations.
Brett White: As noted last quarter, Q1 cash outflows are elevated due to the timing of our annual employee bonus payout.
Brett White: Before moving on to our outlook, I want to briefly address recent developments in trade policy and tariffs. We have proactively managed our hardware stock and are well positioned to navigate trade barriers and mitigate the effects of potential tariffs in the near term.
Brett White: Turning now to our outlook, as discussed in our February earnings call, Q2 represents our toughest year-over-year revenue comparison of 2025 as we lap the effect of a price adjustment in Q2, 2024.
Brett White: We do not anticipate price adjustments this year to be as significant as those made in 2024.
Brett White: Excluding the effect of pricing adjustments and true-lark, we continue to expect core business growth in 2025 to outpace 2024.
Brett White: For the second quarter of 2025, we expect total revenue to be in the range of $57.3 million to $58.3 million. We anticipate true-larc de-closing Q2, accordingly our guidance for the quarter only includes a small amount of true-larc revenue.
Brett White: We expect non-GAAP operating loss to be in the range of $1 million to break even, which includes true-larke expenses and the additional R&D and go-to-market expenses associated with this acquisition,
Brett White: As a reminder, employee, annual employee merit increases go into effect at the start of Q2.
Brett White: We are raising our full-year revenue guidance to be in the range of $236.8 million to $239.8 million which includes an estimate of approximately $2.5 million of true-lark revenue in 2025.
Brett White: Excluding the impact of TrueLark, this represents a race to our full year revenue guidance for our core business.
Brett White: We expect non-dap operating income to be in a range of break even to $3 million for the year. The decrease in our operating income guidance is the direct result of incorporating the through-lar investments.
Brett White: Transaction-related costs related to the acquisition are excluded from our quarterly and annual operating profitability guidance.
Brett White: We expect to have a weighted average share count of approximately 76.5 million shares for the full year, which includes the effects of the true-lark equity consideration.
Brett White: In closing, Q1 reflects a good start to the year with continued progress across our key priorities. The acquisition of TrueLark marks a strategic step forward in advancing our platform, deepening our product differentiation, and expanding our reach into intelligent front office automation.
Brett White: As we progress throughout 2025, we remain focused on revenue growth, driving operational efficiency and maintaining positive free cash flow.
Brett White: We appreciate your continued support and look forward to meeting with as many of you as possible in the coming months, and now we'll turn the call over to the operator for Q&A.
Thank you.
Speaker Change: Ladies and gentlemen, we will now be conducting a question and answer session.
Brett White: If you would like to ask a question, please press star and one on your telephone keypad.
Brett White: A confirmation tone will indicate your line is in the question queue.
Brett White: You may press stars and too, if you would like to remove the question from the queue.
Brett White: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Brett White: Ladies and gentlemen, we will wait for a moment while we poll for questions.
Alex Clark: The first question comes from Alex Klar with Raymond James, please go ahead.
Great. Thank you.
Alex Clark: That's barely incremental there. Is there any existing customers already using it that kind of helped you see the value prop there? And then what's kind of the cross a opportunity to do that through our customer base that you don't have today? Thanks.
Alex Clark: Sure, so we do have joint customers, which is one of the things that really excited us about it because we could really get a deep understanding of the value of the product. And the customers view this as a revenue driver, that it brings in, it automates the appointment booking and it helps with marketing and lead gen and follow up on lead conversion.
Alex Clark: Both when the office is open because significant number of calls into the practice go on to answer during the day they leave voice mills and then there's follow up or true arc can actually handle what they need get done during the office but it also does booking after hours. [inaudible]
Alex Clark: So I think one of our favorite quotes from our due diligence was when we were talking to a joint customer, a very large DSO, and they said, well, if I went, if there was some sort of calamitous economic situation and I went through my software spend, this would be the last.
Alex Clark: The software that I would cut, because it absolutely brings them revenue. So it's a very complementary but incremental piece to our solution. So we're just thrilled with how well it fits.
Alex Clark: and then the second on the cross-cell. So Trularch's a scrappy start-up company and
Alex Clark: Just, you know, they focus primarily on selling to large DSOs because they had to get, you know, they had to make the go-to-market investment work. So they sold primarily DSOs, they have very few.
Alex Clark: Single Locations, which is the majority of our customers. So there is a terrific cross-sell opportunity for us to bring this product to a market economically. And so some of the investments we're making is, frankly, adding onboarding team members.
Weave Commns
Speaker Change: Okay, great color there, and then Jason, maybe a follow-up for you.
Speaker Change: You've talked about the record specialty medical quarter and the growth this year X true lark and pricing expected to be up versus 2024. Are you already seeing that through Q1? I
Speaker Change: Every quarter, but is that something you're already seeing there? Is that more so based on some of the hiring plans you have driving faster growth in the back half of the year? Where are we to date on that target?
Speaker Change: Yeah, thanks, Alex. We had a strong Q1 on the medical side. It was a really great quarter, as Brett mentioned, this performed across several different specialties.
Speaker Change: largely driven by continued improvement in the integrations as we continue to add integrations
Speaker Change: In terms of the overall growth, we continue to anticipate that as we add the sales capacity and as those investments that we've talked about will...
Speaker Change: continue to land that we anticipate seeing more improvement in the back half of the year.
All right, great. Thank you both.
Weave Commns
Speaker Change: Thank you. The next question comes from Brent Bracelin with Piper Sandler, please go ahead.
Brett White: Thank you, good afternoon. Brett, following up here on TrueLark, as you think about the monetization pricing opportunity, maybe walk through how is the product priced today, if it is driving kind of ROI, is it on a subscription basis, is it a...
Speaker Change: A consumption or a transactional kind of pricing model, walk us through a little bit more around pricing as we think about taking that and cross-selling it into the install base, thanks.
Yeah, thanks, Brett. I'll take that one.
Weave Commns
Speaker Change: Maybe put some context to the opportunities that we see and how that fits in with our overall pricing strategy.
Speaker Change: The TAM, the shift in TAM, previously we reported our US TAM at $7.1 billion, and today we announced that with the acquisition of TrueLark, that US-based TAM is about $10 billion.
Weave Commns
Speaker Change: Yeah, just a couple of things. So Brent, do you answer the question? They are subscription contracts.
Speaker Change: Another thing that was very attractive to us is customers generally will run a pilot and then they'll sign an annual or even multi-year contracts. So customers are pretty confident with the ROI when they sign up for the product. And another Jason mentions the M.
Jason Christensen: The Tam, another thing that's very interesting is we've actually gotten interest, when TruLuck was just a partner, we got interest internationally from bringing this type of solution to market outside the U.S., so I think that there's additional opportunity there that we're pretty excited about.
Speaker Change: Gratz on the first build by kind of decisions, et cetera, in the road map, certainly interesting. My last question is, is just around maybe the pipeline, the activity around...
New Business, obviously.
Speaker Change: The world is changing. There's a lot of dynamics out there that small businesses are nervous about. Walk us through how the pipeline has been so far for you guys as you think about going into April here early May. What are you seeing from a pipeline build perspective? Thanks.
Speaker Change: Yeah, and now I'm going to knock on my wooden table here, you know, fortunately, our market.
and our products have been quite resilient to economic
Speaker Change: Challenges, and we certainly have not seen a degradation in what I would call a leading indicators, lead flow, inbound interest.
Speaker Change: We have a relatively short sales cycle, so really the big pipeline build comes in multi-location space.
and that's growing.
Speaker Change: But what's really exciting is by bringing true-lark into the product portfolio.
Speaker Change: We can start, we can lead with an absolutely proven-out revenue generation, positive ROI product.
Speaker Change: and get the customers started on that if they just want to start there. So, you know, we have the revenue generation and efficiency tools that Weave has always had plus we have this
Speaker Change: This new revenue generation and efficiency tool through true luck. So I think it really helps our pitch and our market space and it's just so easy to prove the ROI.
Speaker Change: That were quite excited and really haven't seen any type of degradation, I would say, on the pipeline or on the macro side.
helpful color, guys. Thank you. Thank you. The next question comes from Parker Lane, Pitch T-Filp, please go ahead.
Speaker Change: Yeah, guys, thanks for taking the question. I'm sticking here with TrueLark, Brad, when you guys did the diligence process here, I was just wondering if you could comment on what you saw from a competitive standpoint, how early you feel like we are in this agenteic AI opportunity for the types of businesses you work with and if um
Speaker Change: You know, there's any other companies out there that are really attempting to do this, or if this is a situation where you find yourself in the front of the one. [inaudible]
Yeah, so we- Um-
Speaker Change: We've been looking at this for a while. We've got a pretty clear three-year vision on what our product roadmap looks like and what our solution set should be and could be. So we've been looking at these types of businesses. I think we've
Probably looked pretty deep at 20 or more.
Speaker Change: And the thing that really struck us about the true like business.
is just the fact that it worked.
Speaker Change: and so, you know, with multi-year contracts and these contracts scale over time and it's just a proven solution. It just works. It gets the job done.
Speaker Change: And so that's the most impressive part for us was the customer base and the fact that they raped about it and it actually solves the problem. There are lots of
I would say [inaudible]
Company
products out there that are really cool.
Speaker Change: Looking but they just didn't have the traction and the footprint and the established pattern of success that true like that so we're very excited about what we've got here and the other thing I think that was quite exciting for us on a competitive front of the 20 plus companies that we looked at. [inaudible]
What's the leadership team? These are very, very experienced.
A.I. folks going back to ML learning researchers from Microsoft.
Speaker Change: And so they've got a long period of time. They've got a lot of learnings in the industry that we're in. You know, you can always spin up a product and put it on top of chat GPT and make it look good.
Speaker Change: Solving real customer problems, because when it comes to booking, you just can't get it wrong. And so, having their deep experience, having them learn the hard way about how these businesses work was incredibly and is incredibly valuable to us.
Weave Commns
Speaker Change: Thanks for the feedback there. And just to follow up on the customer relationships they already have, you know, you mentioned that this could be applicable to all the different sub verticals you work with longer term. Sounds like maybe dental is where they've gotten some of the bigger customer relationships. But I also see, you know, if you be in wellness and fitness on their website, is there potentially an opportunity for you to go deeper with some of those sub verticals that they have brought to the table that you don't currently address? Yeah.
Speaker Change: Yeah, absolutely. So they've done real well in Med Spa. And in Med Spa, you know, we've done we've had we have had a couple great quarters.
Speaker Change: in Medzboz as well. So we consider Medzboz specially medical. They've done well there, they're indenciled, but you're right. They also have had fitness. Basically their footprint works really well in appointment-based businesses, both single location and multi-location, which is where our platform works well as well. So I could definitely see us taking weave, kind of our weave quarter platform into, you know, verticals where they currently are through their pro-loc relationships.
Weave Commns
Great. Thanks for the feedback again. Appreciate it. Thank you.
Thank you.
Moderator: The next question comes from Michael Fung with Bank of America, please go ahead.
Michael Fung: Yeah, thank you for the questions tonight. So you mentioned your order on the script, successfully you've seen especially medical med spa and plastic surgery.
Michael Fung: Success with, so where are we in penetration of the verticals and then related question?
Michael Fung: Which of the verticals do you think is most economically sensitive? So based on your macro viewpoint, which ones would be most affected by a macro downturn or improvement?
Yeah, thank you for the question.
Overall.
Michael Fung: We are less than 15% penetrated in all of the verticals that we service. Even back to our S1 when we IP out, we indicated that optometry is where we were probably the
uh
to the question of sensitivity.
Michael Fung: I think that's where ever there's markets with discretionary spend. And so when you think about the businesses that have...
Michael Fung: have more luxury tags to them or elective elements to them. Those are the areas that we see
Michael Fung: Can have some struggles now the fortunate thing is the vast majority of the businesses that we're in the vast majority of our customers
Michael Fung: are not really that elective. And where are existing install bases? So...
Michael Fung: You know, fortunately, we're not seeing a lot of headwind at this point or really any headwind associated with the macro, but if we were to see it, it would be in those elective areas.
Yeah, so maybe, you know, I think-
Speaker Change: As Jason said, dental would be our most penetrated. I think we're just north of 10% there, specialty medical we're still what sub 1% that is a really really big space.
Speaker Change: And although we've got a lot of growth there, we're still very early stages when it comes to penetration. I think it's...
Speaker Change: It's like 22 or so sub verticals in there. So we have tons of runway but dental is the most penetrated and especially medical is the least penetrated. I'm going to answer the other question a little bit backwards. I'm going to answer the other question a little bit backwards.
Speaker Change: What we have seen through multiple economic evolutions is that the core space where we are in, dental, optometry, veterinary, and then the specially medical segments we're focused right now are actually have proven to be quite resilient.
Speaker Change: And it's a strange use of strange facts. So I've been in my prior role was in a wellness software company.
And we thought that...
Speaker Change: You know, during the great recession and then during COVID that the pullback would would happen in the places where they had big ticket items and it was most discretionary so cosmetics. So, let's take a look at this.
Plastics, and it turns out…
Speaker Change: When times get tough, people still spend money on that stuff. So I'm not really concerned about some of the, you know, the mere fact that something is optional, a service is optional is necessarily an outsized risk.
Speaker Change: to the business because, you know, when folks lose their jobs, they may give up on the Caribbean vacation, but they're not going to give up on some of their other elective activities. So, that would be my answer.
Speaker Change: Yeah, that's great. Thank you so much for all the color on that and really quickly one more if I could so
Excuse to really dial it in and go to market.
Speaker Change: The last couple of years and at least and you know we're working very well.
Speaker Change: Are there further refinements or changes planned where you think that you can either bring down the customer acquisition cost or increase the velocity or gross ads going forward?
The answer to both of those is yes. So,
You know, I personally just don't believe [inaudible]
that any part of our business cannot be improved.
Speaker Change: And that's that's really a mindset we have around here. So
Our go-to-market leadership is always trying to figure out
Speaker Change: New ways to scale the business, new ways to reduce CAC, new ways to create additional leverage.
Speaker Change: and one of the things we've done recently is we've stood up this mid-market team. We've totally
Speaker Change: We've changed the profile of the folks who are on that team, and that's starting to see a good, really good traction. We had a good quarter in our mid-market segment in bookings.
Speaker Change: But so the answers were never satisfied. We're always experimenting, trying new things. I'm really excited about what the true-lark opportunity brings to us because it really adds a new type of product.
Speaker Change: and it can be sold into our install base through our existing team. It really just further enhances or develops our opportunity to be a true trusted partner to our customers as opposed to just, you know, a software vendor.
Great. Thank you so much for the questions.
Speaker Change: Thank you. An next question comes from Mark Schappel with Loop Capital Markets, please go ahead.
Brett: All right. Thanks, guys. I'm Brett. Thanks for watching. I'll see you in the next video.
Speaker Change: Hi, this is Tim Greaves on for Mark. Thank you for taking our questions. I guess my question is regarding the payment solution. Could you talk about the attack rate that you're seeing from that business and whether it's increased and meaningful?
Speaker Change: And there's still a lot of room for us to grow in that area. We look forward to the day when we do cross the 10% threshold.
Speaker Change: I would just add, we are, I think, meaningfully...
You know, we are all hands on deck
Speaker Change: on building the payments functionality into the communications workflow and then integrating that back into the various practice management software. And again, here's another place.
Speaker Change: for TrueLark really helps us because they also can automate payment transactions.
Speaker Change: We're super excited about the opportunity. I think we mentioned, we did mention our commentary that we had a very strong revenue growth quarter and Q1 and payments and we're just going to continue to be heads down on that [inaudible]
Speaker Change: Okay, thank you. And I guess sticking on that, since you guys mentioned that it's a relatively small part of the percentage of revenue. I think you said a little 10%. How high do you think that percentage can get as you continue to execute on the opportunity?
Well, let me, um...
Weave Commns
Speaker Change: I probably shouldn't say too much, but we're definitely not even close to being anywhere satisfied with our current percentage of revenue, and I think we can definitely get it well north of 10%, and I think we have the opportunity to make it actually significant larger than that.
Okay. Thank you.
Speaker Change: Thank you. As there are no further questions, I would now like to hand the conference over to Brett White, CEO for closing remarks.
Brett White: Well, thank you all for joining the call and thank you again to the Weave team and welcome to the true art team.
Thank you.
Weave Commns
Brett White: Thank you. This concludes today's Delhi conference. You may disconnect your lines at this time. Thank you for your participation.
Mark Schappel, Alexander Sklar, Brent Bracelin, Brett White