Q2 2025 Weave Communications Inc Earnings Call
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Yes.
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Greetings and welcome to we've communications second quarter 2025 financial results and conference call. At this time all participants are on a listen only mode. A question and answer session will follow the formal presentation.
If you'd like to get into the queue with that time. Please press star one on your telephone keypad that will access you into the queue.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
I'd now like to turn the conference over to your host Mr. Mark Mcreynolds head of Investor Relations. Thank you you may begin.
Thank you Rob good afternoon, and welcome to <unk> second quarter 2025 earnings call.
With me on today's call are Brett White, CEO and Jason Christiansen CFO.
During the course of this conference call, we will make forward looking statements regarding the anticipated performance of our business.
These forward looking statements are based on management's current views and expectations until assumptions made as of today's date and are subject to various risks and uncertainties uncertainties described in our SEC filings.
We've disclaims any obligation to update or revise any forward looking statements.
Further on today's call, we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results.
Unless otherwise noted all numbers, we talk about today will be on a non-GAAP basis, which exclude one time acquisition related costs amortization of acquired intangible assets and stock based compensation.
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 the earnings presentation on our Investor Relations website at investors Dot get we've dotcom.
And with that I'll turn the call over to Brett.
Thank you Mark.
Thank you to everyone joining us today.
We've delivers an AI powered patient interaction platform tailored to the needs of small and medium sized health care practices.
Our solution unifies communication scheduling payments practice insights and more to one seamless platform.
We help our customers grow their businesses keep schedules for accelerate collections and deliver exceptional patient care.
That's S M B health care practices look to modernize we.
We've improved operational efficiency by automating workflows, freeing up office teams to build stronger relationships with their patients and clients.
I'd like to highlight a few key financial results from a very strong Q2.
We delivered revenue of $58 $5 million, representing 15.6% year over year growth and marking our 14th consecutive quarter of exceeding the top end of our revenue guidance.
We had another record sales quarter and an acceleration in sequential revenue added even excluding the impact of true lurk.
Payments revenue continues its rapid growth.
Gross margin rose to 72, 3% an improvement from Q1, and we also exceeded the top end of our guidance range for operating income.
We delivered strong cash flow performance in the quarter generating $4 $5 million in free cash flow.
This continued improvement reflects our disciplined execution and underscores the efficiency and scalability of our business.
As we speak with customers across the verticals, we serve we consistently hear a common set of priorities.
First profitable growth.
96% of F N B health care practices reported growing patient base they.
They are challenged to keep up with the demand for services, while maintaining margins, especially in a market with labor constraints inflationary pressure and shifting payer provider dynamics.
Operational efficiency is no longer a back office concern, it's a growth lever.
Standardizing recall, an appointment reminder, workflows reduces administrative burden and streamlines patient communications to keep schedules fall.
For example in its first year in business, a single practitioner Optometry office generated $70000 in additional booked appointments using weaves recall reminders.
Next patients increasingly expect consistent digital first interactions and the majority of practices say technology is critical to developing great experiences.
From personalized phone greetings to 24, seven online scheduling practices that embraced technology are better positioned to stand out and competitive local markets.
For instance, 60 locations in a large dental service organization used we've miskal techs feature to generate one and a half million dollars in revenue in a single quarter scheduling over 7200 appointments from Mr calls.
Another key priority for F. N B health care practices is accelerating revenue cycles to strengthened financial health by reducing receivables days outstanding increasing collections and automating billing.
As an example, a single location dental practice collected $100000 and outstanding balances in under a year using vis text to pay.
Finally, Mckinsey research reports that MTI has the potential tuck automate up to 45% of administrative tasks and health care.
That's not just cost reduction its capacity creation.
80% of practices that reported fast growth say, new office technology was a contributing factor in over 60% reported that current technologies make hiring easier.
These strategic imperatives are shaping the future of health care delivery and every technology investment must directly support these priorities.
That's where we've comes in.
In May we acquired true Lar and AI powered workflow automation platform that enables 24, seven online scheduling miskal responds and marketing lead conversion.
This acquisition marks a major step in bringing intelligent automation to the workflows that matter most to small and medium sized health care practices.
Two lark helps practices boost revenue keeps schedules full and reduce front office burden.
For one customer to lark handles over 15000 conversations monthly across 60 locations.
We're rapidly integrating through Larkin, we've across go to market and product teams to bring this automation to our customers and prospects joint.
Joining selling to mid market dental groups is already underway and we're progressing towards offering true lark as an add on within unified we've inbox.
By unifying these AI capabilities into a single experience. We've it's positioning itself as the go to platform for simplifying operations and increasing impact across key health care verticals.
We are transforming everyday operations, making it possible for practices to deliver better care and service without additional strain on their teams.
This foundation of intelligent automated workflows sets the stage for our next chapter of growth.
Building on this momentum, we're seeing clear signals of strength across our strategic growth vectors that we laid out for you in our February earnings call.
Just one year ago, we announced that specialty medical was our third largest and fastest growing vertical today. It is our second largest by customer count.
With under 1% share of the total specialty market.
The opportunity ahead remains enormous Q2 marked a record quarter for our medical vertical driven by strong growth in medical aesthetics primary care and physical therapy.
Organic demand and average revenue per location continued to improve as we launch more authorized integrations with electronic medical record systems.
Our authorized integrations with their dime practice fusion and prompt are off to a very strong start just five months post launch.
We also recently launched authorized integrations with ortho to edge, a leading orthodontic.
Practice management system, and IDEXX Neo a widely adopted cloud based platform for veterinary clinics.
These integrations address key patient engagement challenges for practices in both verticals and expand our reach to thousands of new locations.
On the mid market front momentum is building with a growing and increasingly diverse pipeline.
We have seen strong traction in veterinarian specials.
Including two multi site physical therapy management service organization signed in Q2, representing over 70 clinic locations combined.
Everything we do it we even centered around helping health care practices grow and thrive and our customers continue to take notice.
And G to summer 2000, and twenty-five report we ranked first in 34 categories and remains the top rated platform in the grid for patient relationship management.
G. Two rankings are driven by real customer reviews, and reflect the trust practices placed and we've to power meaningful patient connections streamline operations and grow their businesses.
Before I turn the call over to Jason I'm excited to announce that Avi Sharma is being promoted to chief Technology Officer.
He was originally hired as R. S V P of technology and in the short time that we've has exceeded expectations demonstrating strategic vision and operational excellence. He is the clear choice to lead our technology organization.
This promotion reflects our planned succession strategy and ensured strong forward looking leadership as we accelerate innovation scale, our platform and deliver greater value to our customers.
Finally, I want to thank our customers partners team and shareholders for your continued trust and support.
We are very encouraged by strong momentum across the business, especially in the significant growth in medical and the AI powered solutions, we're bringing to market where there is vast opportunity ahead.
I'll now turn the call over to Jason for the financial update.
Thanks, Brett and good afternoon, everyone I'll begin with a quick update on our acquisition of true arc.
As a reminder, the transaction closed on may 16th comprising $25 million in cash and $10 million in equity.
As part of this transaction, we filed a form S. Three shelf registration with the S. E C to register the resale of the equity issued under the terms of the steel.
This is standard practice and we have no current plans to offer or so additional securities under this registration.
As Brent mentioned, we are already executing on our integration strategy with initial with initial efforts focused on expanding product integration and aligning go to market programs.
True larks momentum and Multilocation health care is highly complementary to weaves distribution model and we remain confident that this will be an accretive asset in 2026.
Turning to our results, we delivered revenue of $58.5 million exceeding the midpoint of our guidance by $700000.
This represents 15.6% year over year growth.
As a reminder, Q2 represents our toughest year over year revenue comparison of 2025, as we lapped the effect of a price adjustment from the prior year.
Payments again was a key contributor in the quarter. These results include just over one month of true arc revenue and expenses.
Gross revenue retention in Q2 was a healthy 90%, which remains in the top tier for S. M B SaaS companies.
For the past two years net revenue retention has consistently been between 95% 98%.
Q2, net revenue retention was 96% consistent with our historical range.
Let me now turn to our operating results for the quarter.
Through disciplined execution and ongoing efficiency initiatives, we delivered solid financial performance across our key operating metrics.
Gross profit grew to $42.3 million in Q2, an increase of nearly $6 million year over year.
That represents a gross margin of 72.3% up 40 basis points year over year, and up 20 basis points quarter over quarter.
We expect our gross margin to continue to improve modestly through the remainder of 2025.
Sales and marketing expenses were $23.2 million or 40% of revenue.
As stated in our February call, we are making targeted investments to drive our midmarket partnerships and specialty medical growth initiatives.
Given the positive momentum across these areas, we accelerated the hiring of sales account executives originally planned for the second half of the year into Q2 to capitalize on these opportunities.
Research and development expenses were $8 $9 million or 15% of revenue.
We are focused on integrating true lark in bringing AI powered workflow solutions to the markets we serve.
As discussed in previous calls we are making targeted investments associated with these initiatives.
General and administrative expenses were $10.1 million or 17% of revenue an improvement from 19% in Q2 2024.
As we continue to scale the business, we anticipate we will continue to gain operating leverage in general and administrative expenses.
<unk> income for Q2 was $70000 an improvement of $1 million compared to Q2 2024.
Operating income also exceeded the midpoint of guidance by $600000.
Next I'd like to highlight our balance sheet and cash flow performance.
We ended the quarter with $77.8 million in cash and short term investments during the quarter, we deployed $23 million in cash to fund the acquisition of true arc.
From a cash flow perspective, Q2 was a great quarter.
We generated $5.4 million in cash from operating activities.
And delivered $4.5 million of free cash flow.
Year to date free cash flow was $3.4 million or 2.7 million dollar improvement over the same period last year.
Looking ahead, our outlook for the third quarter of 2000 and twenty-five reflects steady progress we expect revenue to be in the range of $60.1 billion to $61.1 million we.
We expect non-GAAP operating income to be in the range of breakeven to $1 million.
For the full year, we expect revenue to be in the range of $236.8 million to $239.8 million representing.
And expectation for accelerated growth in the second half of the year the midpoint of the range.
We expect non-GAAP operating income to be in the range of $1.2 million to $3 $2 million for the year.
Profitability is set to improve in the second half driven by revenue growth and continued focus on operating efficiency.
Our expected weighted average share count for the full year remains approximately 76.5 million shares.
Q2 reflects meaningful progress and continued execution against our strategic priorities.
We delivered solid financial performance improved gross margin and strong free cash flow.
We remain committed to balancing growth with profitability as we invest in the new vectors of growth, we have discussed and strengthen our leadership position in front office automation.
Thank you for your continued support and with that we'll now turn the call over to the operator for Q&A.
Thank you at this time, we'll be conducting a question and answer session.
If you'd like to ask a question. Please press star one on your telephone keypad.
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Our first question comes from Alex Sklar with Raymond James. Please proceed with your question.
Great. Thank you.
Bret personal for you just great to hear the specialty medical success again this quarter second largest vertical for you any commonality in terms of where youre seeing the most success within specialty medical and I'm curious how did those land look in terms of coming on with one of your larger integrated bundle relative to your kind of average tenneco optometry.
Thanks.
Sure. So I'll take the first one and then I'll, let Jason add some detail on the second one so you.
No.
When we roll into a new vertical like specialty medical we generally focus on a few practice areas because we want to get the integrations and we want to get the product market fit right and then.
Once we kind of get rolling there then we start adding additional practice areas. So we're still very focused in medical aesthetics, which which we call plastic <unk>.
Physical therapy.
Those are probably the big ones.
General practice has also done quite well and the way they roll.
<unk>.
You know when we move into a new vertical the way it kind of works is.
We enter generally the E. S. P is a little bit lower because you don't have the brand yet you don't have all the integrations done yet.
Churn may be a little bit higher and then as you mature in that segment you know say over the next 12 to 36 months generally a S. P rises.
That goes down because your brand is more well known and then churn comes down as you perfect market.
Product market fit so that's kind of how it rolls out and as far as how they're landing now I think it's pretty consistent.
Yeah.
When you look at dental and a higher level packages. This is where the integrations become really key really important to understand is typically within the medical side.
Where we're at from an integration coverage perspective, we continue to make great progress.
But you do see customers, who come in on a non integrated solution or come a little bit further down the stack because we haven't had as much time and market to deepen those integrations as well and the deepening of the integrations as well. It also allows those customers to move up the stack into the elite and ultimate bundles. So you will see that dynamic are relative.
Two dental and optometry and so you know.
There's a couple of points of improvement there one is in just new late new location acquisition, but then to over time as we get those integrations.
And deliver on the product market fit side.
The opportunity to then move them up the stack of packages.
Yeah, and I'll just add you know, we we still sell them.
Actually we sell a lot of non integrated kind of core product into specialty medical and so then when we build the integrations theres an upgrade opportunity. But then also the integration creates new demands so theres kind of two actions.
Actions at play there that move.
Specialty medical customers kind of.
Up the E S P. Jane if you win.
Okay, great color. Thank you both maybe Jason one follow up for you just in terms of thinking through one of the big drivers of N. R. R payments.
How is the growth trend is there for that solution relative to kind of overall subscription and what have you seen from kind of the sales team just in terms of being a priority. This year for driving higher attach and then higher usage is the year for us.
Yeah.
Thank you for the question so.
In terms of.
Payments performance. So it continues to grow much faster than our subscription line of business.
As it has in the past and.
We we've talked about how there's been incremental focus on payments are really coming into this year, where we've made targeted investments.
On the payments lined up front, along with the other growth factors.
And you know.
We're beginning to see a good improvement and progress on that front, where the attach rate of payments.
Within our install base continues to move up and continues to make good and steady progress.
And there's two layers to that one is getting the attach rate and then the second is then capturing all of the volume of the customers and we're making progress on both fronts are the works not done on either of those we still have a massive opportunity and we're significantly.
Significantly underpenetrated in that opportunity and continues to be a focus for us.
Okay, great. Thank you both.
Our next question comes from Parker Lane with Stifel. Please proceed with your question.
Hi, This is Matthew kicker on for Parker and thank you for taking my questions to.
To start could you just detail maybe the progress of the integration with the <unk> team itself, how the assets are being integrated with years. The combination of the go to market approach and then also any early feedback you may have received from customers on the trailer product.
You bet.
So we closed the acquisition in mid May and.
You know started our integration activities. Shortly shortly thereafter I think the two major areas of integration are on the go to market side and on the product side. So on the go to market side I mean, a true Lark had was well established within you know kind of large DSO mulch.
The location type businesses so.
They have the motion networks, there they've got the sales motion the delivering the proof of concept the onboarding and the support so so we immediately took that capability.
And combined it with our Multilocation sales team. So now they're joint prospecting they are sharing pipelines, what's really interesting.
Oh, the we've Multiunit multilocation.
The team can actually go and prospect into say, a DSO that maybe isn't ready to switch out their entire telephony stack or they may be on a contract or something but actually can start building that relationship. We can sell true lurking there and they start building that trusted relationship. So so those activities kind of joint prospecting started.
Immediately and underway.
On the on the.
Rest of the business so.
We're right now working to build out the capability of the platform to.
Land and onboard successfully single location. So you know the the true LEC business was really designed around multilocation. So they they didn't really have the onboarding and support capability to bring on hundreds of new locations individually.
So we don't want to we don't want to sell the product into single locations before we're able actually to deliver.
Deliver that great Onboarding experience. So we're building that team building that go to market map the next.
The next.
Activity, there would be to start selling.
True lark into our install base and we expect that to kind of kick off and in Q4.
And then lastly, the the final piece would be to start selling it into new single location product prospects and we expect that that to be Q1 and in one of the important pieces. There is gonna be bill.
Building out the product experience. So we want to move to where we have a combined inbox or where you get both the true lark.
Services and the web services in a combined inbox are you can you can manage all your experience all in one place and so the product teams. The joint product teams are hard at work.
Delivering that and then that that really is what we would take to market for for the single locations and then as far as feedback.
We.
During the.
<unk> process, we talked to a lot of the true like customers and they were very very happy with the product we continue to hear that we.
We have had.
Actually a fair bit of inbound after the announcement of Hey, this looks great.
How can I.
How can I build this into my business and also some very interesting partnership opportunities.
Of you know partners wondering to offer the product and the joint product so.
So that's that's quite exciting and then on the single location side, we've received a fair bit of inbound as well wanting to know when they'll get access to the product. So we're kind of building a waitlist there on when the product and the Onboarding and support processor ready for an amazing experience combined through <unk>.
We've experience.
And when it's ready we'll roll that out.
Yeah.
That's great color. Thank you.
And secondly, I'm wondering what impact you've seen on CAC from your push the enterprise and maybe more broadly what opportunities do you see to drive leverage on that sales and marketing line in coming years.
Right. So I'll give you my view and Jason you can anything so actually the mid market team.
We've done a complete refresh there they've got a very experienced leader and you know their sales cycle is much longer they build a pipeline.
Sometimes it's a proof of concept closed the deal and then rollout over time. So we were actually just doing some math and and they're there.
<unk> is actually terrific.
And slower than some of our other channel.
Channels. So we're quite pleased with the progress we're making we're quite pleased with the pipeline they're building them. The CAC is in a good place and I think the other interesting piece here then I'll just I'll just mention on the mid market side is.
If you look at the total just let's just say dental the total dental market U S is growing kind of mid single digits and the Multilocation segment is growing probably high teens. So theres a lot of growth there not only just new businesses, but also.
Also they are acquiring a lot of the single location so getting into that segment for US you know with a product that we've now had for about a year.
We think really offers some some great opportunities.
For for growth and in the CAC metrics are working and then now with this additional capability of being able to go into a D. S O or go into a large multilocation and they say hey, you know, we're not ready to talk to you. We've about about the telephony stack well, we can talk about true lock and the same the same goes the other.
Way, we've got you know true lark as in accounts and we can go and talk to them about telephony, so where we're actually really pleased when I. When I said I thought we had a really strong quarter.
Our mid market business is definitely one of the big highlights.
Yeah, maybe one thing I'll add to that.
Is when you think about the scalability of that model going back to the question of an IRR.
Our N R. R. Historically is a measurement that is based on locations not on logo. So what that means for a multilocation group is as you expand your footprint and acquire additional locations or as they grow their locations through that consolidation Brett talked about or current N. R. R.
Metric doesn't take credit for that and improve the NR or metric. We've been we're not ready to report an official metric on this but as we've looked at the multilocation customers within our customer base. What we're seeing is that they're an IRR is over 100% when you look at it through that lens.
Which goes to your question of what is the operating leverage and the scale that that motion provides another proof point of the benefit that we get through that motion.
Terrific.
Thank you.
Our next question comes from Brent bracelet with Piper Sandler. Please proceed with your question.
Hi, guys. This is Hannah Rudolph on for Brian Thanks for taking my questions.
First one I think you already discussed it but I just wanted to confirm you were talking about true lark.
Having certain dsos as customers and being able to cross sell them over time, I guess have you been able to start on that motion already or that is still in process.
Yeah. The two teams are definitely working together, they're combining their pipelines and they are engaging together.
Got it thank you and then Jason.
You talked about accelerating some investments into Q2 from the second half and I'm just wondering how much investment you feel you have left that needs to be elevated over the second half or if he is accelerate all of that investment.
It's a great question you know when we look at the investment most of these have been fairly small investments from a relative scale perspective, a handful of sales reps here or there.
A lot of that when we think about the balance between growth and profitability is really within our control as it stands now we brought we brought forward some of the hiring.
We need to ramp the capacity there and if we continue to see a growth that warrants.
Handful of additional investments here or there that's something that we'll continue to evaluate.
That's something that.
The throttles within our control based on the performance.
And then lastly did you see any specific dynamics in your payments business around seasonality in certain verticals, maybe having more activity in the summer months.
Nothing nothing in particular as it relates to Q2.
The.
Nothing to highlight here on that front are we continued to grow nicely and payments continued to grow well well faster than our subscription line of business we.
We continue to make progress on that front on both the go to market and the adoption side.
Got it thank you.
Our next question comes from Kash Rangan with Goldman Sachs. Please proceed with your question.
Hey, guys you got Henry on for Kash. Thank you for taking my question.
First it was it was great to hear the strength again in specialty medical I think you mentioned you had about 1% share of that market, where do you see the largest opportunities going forward.
Just across the specialty medical market.
Wow.
You know one of my things around here, sometimes there's opportunity everywhere.
And I definitely think.
That's the case here.
Where we're doing quite well in <unk>.
Physical therapy.
What we call plastics are aesthetics.
In general practice family practice.
You know, we're just kind of scraping the surface the.
There's like 21 sub verticals and specialty medical and and the trick is to be methodical. So you.
You know, if we could get 1% to 5%.
In the not too distant future that would be that would be all feel pretty amazing.
Yes.
Yeah.
One thing I would add to that is you know the <unk>.
Eight way for a lot of this is through integrations, Brett talks about Brett talked about how we're growing through even the core non integrated solution because.
Many of these businesses have needs for the exact type of solutions that we brings through.
And an integrated.
Interaction platform that brings in the payments elements and so a lot of that opportunity also comes with a an unlock as we deliver on additional integrations and then as we deliver those as we deepen those integrations.
To bring on additional capabilities or adjacent technologies beyond just the basic communications and payments side of the equation.
Great that all makes complete sense.
On AI I, just wanted to get a pulse check on where are your customers in terms of AI integration in terms of sales conversations how often does a I come up and like how has momentum been with our.
AI powered assistant I think everybody yearend to the launch of that.
Yeah. Thank you for the question so on the AI front I'll say, it's it's fairly fairly mixed we're absolutely seeing an increase in the amount of questions that we're getting asked.
<unk>.
There are early adopters, who are very far down the road, we see some of those within our true our customer base.
There are other customers who.
We'll say, they're at a much slower adoption cycle.
And our primary focus is really on getting them to use even just some of the basic AI assistance that we've had in the product for a couple of years like our review a review or response assistant which you know.
It was a little wizard that it can read.
Online review.
I understand the context and provided contextualized response back directly for the office to that rather than just some generic oh. Thank you for your message.
Or for your review you know all the customers vary from an adoption curve of trying to use those basic features all the way up to the more advanced a full.
Imation workflow solutions and so our focus is really meeting the customers, where they're at and then helping them on their on their automation journey, which they'll all be going through over the coming years.
I would say we're.
And at least seeing an uptick in interest in question on how in an openness to understand how AI technologies can improve.
Their businesses are.
Especially on the multi location side you know there are there large professionally run organizations they get it.
And they know that that is really the future too you know as I said in my remarks, creating additional capacity within their organization.
I think you know one good signs is as.
As as people just use things like chat G. P T more in their daily lives they get more comfortable with what the tool can do for them as opposed to being threatened that it's going to take their job. So I think.
In the single location, you know maybe not the most leading edge, they're getting much more comfortable saying Oh Wow, if I could have a tool that would perform these wrote task for me that would be great as opposed to Oh, a is trying to take my job.
Got it.
That's helpful. And then last one from me you guys have talked in the past about having a.
Relatively macro resistant customer base.
Resistant to sort of the tariff effects that we've been seeing a.
Somewhat elsewhere and so far just.
What are is that does that can you give me true what are your customers, saying about either tariffs or broader concerns about the.
The consumer weakness is that coming up in conversations or does your customer base still tend to be relatively insulated from those.
Wider effects.
Thank you guys.
Yep. Thank you I, you know I would say.
As far as tariffs it really it really depends on the industry and how.
Import heavy that industry is so for example death.
Dental.
You know they have to buy a lot of smocks and things like that sort of it it'll hit them, but not.
That kind of the same thing I think opto, where there a large part of their business is reselling products, it's going to it's going to hurt them more or I should say impact them more than than other segments of our vertical. So the answer is really depends on the vertical and their and their business model.
As far as consumer demand.
Demand headwinds things like that where we're really not seeing that I'm gonna knock on wood again here, but.
But we're really not seeing that but I would say.
You know that yes. So we're just not seeing on demand side I mean, certainly on our business I think we had yet record demand again this quarter. So demand for our products is certainly continues to be quite strong.
Okay.
Brett.
I was just going to say you know Brett also called out in his section that it was a record sales quarter for us and I think that just.
Addresses that that question of from a macro perspective that we're not really seeing you're experiencing it at this point.
Got it makes sense. Thank you guys.
Our next question is from Mark Chapell with loop capital markets. Please proceed with your question.
Hi, This is Tim Grieve Gulfport Mark. Thank you for taking the question just one for me I guess.
Could you provide an update on where you got and and respected engineering hiring in the first half of the year. How recall correctly you guys are one of your initiatives, what the add engineering capacity to build integrations with additional EHR systems. They just want to know how the hiring.
But in the first half.
Yeah. Thank you.
We made progress on the hiring front and I'll say the works not done we've we still have little more capacity to add on the engineering front, especially not just on the Mic practice management integration side, but also when you think about the true lark.
<unk> side the teams have been hard at work getting joint Roadmaps figuring out the roadmap for how we delivered that unified.
In box experience that Brett discussed and you know as part of that there's there's some capacity in some roles that will continue to expand on the engineering front to really bring that to market as quick as we can.
Yeah.
Okay. Thank you.
Our last question is from Tyler Radke with Citi. Please proceed with your question.
Hey, thanks, so much thank cooking our questions. This is karl.
On for Tyler.
I wanted to first ask about billings.
I noticed the reaccelerate it nicely this quarter and enclosed and surpassed the Caltech with revenue growth.
I'd be curious for.
Fair take on a mix of bacteria billings.
Revenue growth for the second half and into next year, especially as you expand into that Midmarket.
AD integration vertical expansions ramp.
Expect that to outpace revenue growth from here.
Kylie so billings isn't a metric that we provide a lot of color on what I will share with you is just remind you we've been making these targeted investments in these new growth initiatives, we talked about them as the green shoots that we saw as we exited last year.
And those teams those investments are beginning to ramp up.
And we're seeing traction Brett highlighted some of these are some of the distraction.
And.
Unless you're referring to deferred revenue, which is our annual bill paying are our annual paying customers.
That did tick up this is Q2 is our largest cohort of annual paying customers.
And so that that may be what you're referencing seeing within the P&L.
Beyond that though when you think about how the.
How growth within the revenue continues to.
Progress beyond here.
The investments, we're making we're seeing some modest contributions here in 2000 and twenty-five that's implied within our our guidance for the remainder of the year.
And we anticipate seeing continued progress in more meaningful progress in 2026 from those investments that we've been making.
Awesome. Thanks, and then just one more for me how are you thinking about the opportunity for price increases.
And would there be opportunity.
This year or next year, and then just an update on on how call intelligent usage and adoption is progressing so thanks so much.
Yeah, So I'll take a price increase first you know, it's something that we'll continue to evaluate on a cohort basis as we have.
Certainly not going to rule rule it out it's something we're going to evaluate especially as we get into 2020 six a lot of that is really going to be tied to one of the cohorts and to the value of the products that we deliver as we continue to.
Make those investments and the innovation and the products, we bring to market.
And then your second question.
Remind me your second question.
It was just an update on Collin College as he said send it around.
Yeah, So on call intelligence.
It continues to make progress for us. It's it's been a nice contributing factor for US here in 2025 are from an adoption perspective, we continue to identify new additional workflows or ways in which our customers will use. This this is unlike some of the other products we brought to market.
This is more of a net new product the isn't.
Isn't doesn't have a well established.
The.
A framework for how all of the offices are standard framework for how the offices use it and so we continue to make progress in finding new ways for the offices to use it and integrating that throughout our product in more places to deliver more value through the insights that that solutions surfaces up making it more actionable and helping them improve their efficiency.
But also.
Take advantage of those missed revenue opportunities that are the solution surfaces up to the office.
Thank you for Max.
We have reached the end of the question and answer session I'd now like to turn the call back over to Brett White for closing comments.
Well. Thank you all for joining the call and thank you again to the we've team for for all the hard work.
This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.