- Earnings call transcript Q3 2022

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Operator

Good day, everyone, and welcome to today's Weave Third Quarter Fiscal Year 2022 Earnings Call. Today's call is being recorded. And now at this time, I'd like to turn the call over to Maria Hocut. Please go ahead.

Maria Hocut

Thank you, April. you XXXX us earnings thank Communications the and quarter third call. afternoon for for joining Weave Good

Investor company's found Investor be the simultaneously Joining me Officer. on section on the website are Chief our Executive corporate the and this available at call today which can and Relations results release, that Taylor, are in Alan our Chief management Financial will be additional investors.getweave.com. Full earnings of section call the Officer; details of commentary Brett Relations website. on the of Please note webcast White,

and Before you limited statements not neither we for statements here. discussion those securities start, within risks plans These actual cause I involve and the forward-looking but would from expectations including, to, promises guarantees like statements federal to contains uncertainties to business. the are that and may discussed results laws, that remind the regarding the the and these results materially nor of differ meaning financial following future management's

except as call, by including of your a whether assumed developments with You subsequent forward-looking XX, place file in law. contains actual on from as we update SEC filed obligation August we've that or following the differ measures. to Factors is the results SEC. this may required which Any at found otherwise, responses to any on new could supplemented discussion reports the on should be with forward-looking website of the available no undue non-GAAP at revise can conference The our Form made are SEC's periodic our current cause and be financial on or statements based in forward-looking questions, XX-Q result and not accessible website www.sec.gov as today, XXXX, expectations statements on statements. them, to in reliance also investors.getweave.com as

release, which of of website most metric, IR the see is the press section each investors.getweave.com. directly non-GAAP available financial our of please For our a GAAP comparable earnings on reconciliation these corporate measures to at

the of Brett call turn Now Officer over I Chief Executive White, Brett? to will Weave.

Brett White

Maria, address us of Directors in My continued I to thank April. a plus CEO. tenure my team you, as past I history to company my made for July financial when our into prior I'm pleased with you payments and when of Weave the Thank with with everyone, experience and Weave for new XXXX joined smooth and C-suite results today the today, conference third very My joined Weave's software transition role. this Board started welcome and you, call. quarter has new SMB executive joining

laser and and effective that As I've scalable core that I'm and delivering overwhelming investors team, our our CEO, the very thankful engaged growth a foundation I'll from support building Weave profitable extremely for our customers lives am about I and have excited team for joining values. future. received our team members love, experience fostering that our focus since on and our Board, an management the optimistic

in of business, we've the efficiency from results, made on this of Meanwhile, XX%. This negative XX% $X.X subscription of QX results which the million of profit revenue XX% aspects company due in share efficiencies year-over-year by to reduced QX QX improved was in year. revenue our earlier results. and go-to-market of our that from $XX.X highlights $X.X our a revenue. addition non-GAAP year. driving Year-over-year, improving our results. November in trends continued of These wanted improving been quarter operating we've XX%, to business last work expense, by much execution which details our loss provides our the non-GAAP Alan financial the gross only operating XX%. representing of of hard us in We positive loss record is million quarter. we contributed to million, margin Before some We've operating team reflected and and revenue public growth with at The demonstrate all non-GAAP has to of our we increased that following saw changes I our becoming improvement throughout our payments negative are

companies, For past those background model key over our to I'd to that like couple a big is be most that energy a flywheel newer rotation. of for evolution its accelerate you story, drivers must it to may the years. little their upon to the provide revenue our like and Like Weave on SaaS continue impart revenue

to rate since well these continue come events that below still pre-pandemic in green latter pleased of for in-person the time. of view declining sales negative for and saw our acquisition. acquisition impact Weave events of Prior that QX pandemic, trade we our channel back acquisition growth into the report early a translate these us. industry are our customer a and the in-person on as COVID to that and which customer our that of year, had new for seen these that contributed industry flywheel in-person though source this effectively accelerates energy customer was new we've future. For shoots I'm levels, shows revenue significant half largest source bode to These events events. in XXXX, we halted business, is to that in-person the new Even new major

model sales March the nine team. which long-term the and earnings year, model a Additionally, ultimately our of beginning to resources sales as six the transition across the call, put was our of effect to new productivity to better of processes. XXXX expected drive months we goal at outlined align into sales the was to take we in sales our The

revenue while are adds performance And QX this results. shoot sales; costs to increased these to updates in pleased green lower report and customer that we momentum continue team of to of in the and reduced help to continue half trend. are some visible the increased of we on size we ramped sales reps; is of revenue in not and attrition; improved due may lead stakeholders first focus form number in our flywheel, are the business will understand sales go-to-market positive go-to-market to to the seeing We relative aggressively customer in year efficiency to sales two near-term. we sales form acquisition, I'm of become seeing our another the clearly that this of positive the better new that, sharing benefit the growth close acquisition

in these continue profitability. our meaningful a motion as towards to and continued progress we expect do capitalize our the we momentum double However, enjoy business, down indicators sales positive throughout and operational to improvements in on XXXX sales

study platform patient Weave's and technology addresses only uncertainty environment owners that a in are employees. invested technology ways caused pain point, their and office and streamlining the to aid for provide economic importantly, to and XX% The businesses. efficiency. on improving staffed, productive for rapid to enhancements. pandemic automate Healthcare their directly are positive key tedious care new small short practice Moving becoming changes due patient offices burnout, A experience. in and, the have recent many engagement; experience searching that steps health this happy these staff more keep overall employee to yet great to and the found medium resignation operating

with to expand products. we During additional the and platform our quarter, technology third continued enhancements

decisions website, appointment patients integrations Connect with give their Scheduling can for missed multi-location phone For more customize staff staff busiest administrators can day. functionality calendar now each added experiences. of schedule office features, make letting practices online a more practice select deeper which hours from in day-to-day let the systems, their Analytics time directly example, improve to types, new way management With them better Text both and now by it operations. availability. to and practices business like metrics the We we Reporting appointments saving With monitor improved efficiency to day our Phone and into calls offices a schedule help for Online patient feature & capture data location. and can their offices visibility This important providers for calls called give they staffing

to efficiencies and business to several cost our data savings delivered to addition engineering have teams these streamline feature via substantial infrastructure. In improvements, the center operational our initiatives

operational and will experience increased scalability, customer future also enhancements larger capability Care going XXX signing overall clients. Dental new agreement In These ever, U.S. forward. to over for across the an our see have which improve our and will related margins reliability benefits locations gross multi-location customer and largest February, with the announced of our We both we Alliance

Alliance work to the become continually we've platform has opted to businesses, As by concluded new innovate their to with its to customers. as our recognized they the been Care serve platform Dental expand us additions our to These and portfolio. live contract our into in locations these ability have Weave implement

categories in report, is the ROI software best the being addition GX summer, again yet honored were in by leader which by GX In the reviews. key named software XXXX market we as customer to by verified this five driven fall

part to live our services featured values. ways of XX, full platform event to our interest October conference, great to helping hosted our and effort first get customer deep is The them As unearth for registered ever discussions dive launch our value event, base this virtual out everything. of enhancements. of offering. platform, some latest company's the of new cross-functional current utilize on commitment attendees the of of our The one the user customer Weave training of Weave a additional core all-in-one platform help and customers most supporting our into its of the these representation sparking in to which Thousands is

this access conference can content getweave.com/connect. You at

be of for the certified outlook our to values earlier, Work because to Weave mentioned Place around year our a and in fourth named engagement employee I company recently focus alignment for leadership a culture, Great career row, and maintaining As continues team. high opportunities. a was

Additionally, diversity, equity inclusion nationally Workplace our for Top recognized practices by and USA. we are

other first our that team our and to conjunction XX team, valuable, working roughly in consisting a in product innovation of meeting on-site months throughput. skilled part very reflects of Weave global This to group, with had is engineers was team XX employee built highly a and team U.S.-based and our As commitment members. technical we roughly engineering our India, in the increase

our to to optimistic In as experience. technology in expect enhanced and conclusion, these invest this and teams We in very about customer build I'm role both our excited geographies to continue continue assume innovation at journey, our to supports CEO very I'm priorities point Weave future and future. the around it

are in thankful many I base. customer there and we cannot the strong for resilient factors a that macro control, am environment Although

in in to we headwinds execute do for our last of against our control. in green us couple continuing We and our ability years, team confident are business faced recovery shoots am that that results initiatives and I have the seeing and the the pandemic-related

it growth year-over-year operating is in benefits the ongoing an positive that we margins customer While both evolution, next margins, in to the focus emphasis we continuing may flow improvement profitable resources including outlook and support time company's in and and during these realize, XXXX, financial clear improvements free capabilities with on our of to getting and breakeven. on will our to and realigned engagement cash take have on aggressively the significant phase gross non-GAAP trends

provide outlook. our Now details results Alan QX on our quarter and will third

Alan Taylor

On and role. behalf a CEO the team want Weave, capacity the Board in with joined he appreciate Brett. of Thanks, I to work quickly been It April. grew his entire The in when to joined Brett mid-XXXX. privilege Weave Brett executive closely team he since to has our energy to welcome

in he as phase Now working Brett all with forward we leads the company's next look to the closely journey.

last the third almost of we the The revenue our total new above our customers million, added guidance in year-over-year top our driven XX% slightly XX-months. the financials, range. was $XX.X entirely reached the by increase Regarding over quarter quarter,

revenue from by We also small existing rate of indicated revenue net benefit expansion, had our XXX%. a as retention customer

our addition, remained that retention where with Weave and even last avid remain users our health XX%, for In during stable has quarters, care at been specialty platform conditions. the customers four the revenue the evolving of gross rate it signals economic

XXXX. QX of growth that our impact changing $XXX,XXX nationwide we revenue roughly have prior mentioned quarters, reflects XX% install the rate As program to our contributed in in

Excluding year-over-year, our channel customers. install the The we revenue. which partners our it and eliminates growth subscription our margins, of program rate is XX% payment improves for and our better growth is that the impact, to our gross our expertise impacts the made growth, IT expands experience for conflict, revenue our leverages change nationwide but

our discuss I refer will and I to non-GAAP results. As expenses margins,

from to expanded the earned a the today. issued year-over-year You can find gross to a attached XX%. margin profit reconciliation by results earlier non-GAAP XX.X% release GAAP our $XX.X basis of to gross related XXX million earnings points We and

vendor described. both reflects also We This on COGS spend benefits have from just through outsourced improvement our program and the I negotiations reducing margin installation optimizing focused our operations. the

In addition, depreciated improve our portion efforts third-party usage. platform as to continue and features continue installed has to and related expect increasing reduce margins will an certain our to we data we fully of hardware, gross base costs

an During increased by $X.X year versus in premium changes QX, team million The as increase D&O related to includes a compared public and fees. insurance result our non-GAAP payments and period company subscription executive due revenue operating last OpEx ago $X.X a our same roughly in of a for expenses in the million, professional increase in certain expenses of million November G&A, in to in change $X.X a increase year, becoming required to period. a

sales Brett capabilities, by marketing increased in personnel implementing our moments $X reflecting changes. non-GAAP to our grew expenses increases Meanwhile, expenses million, related our go-to-market reflecting modestly, as R&D innovation our Our ongoing and ago. investment expand and engineering discussed to expenses

non-GAAP versus last million million, non-GAAP loss margin The a $X.X corresponding operating $X.X from year the of XX.X% of significant ago. or of decrease margin operating is roughly loss QX a improvement loss a was of Our operating year. XX% XX%

compared margin loss ago. is million to on year a or loss XX.X EBITDA year-over-year. Adjusted was net compared negative quarter dramatic million EBITDA the million, a is or improvement, reported million ago. XX% weighted margin million year average of of a per to a $X.X loss $XX.X the was $X.X Our The outstanding. share loss share EBITDA $X.XX corresponding in non-GAAP shares non-GAAP per $X.XX based a $X.X negative improvement third XX.X% This of loss

have of to on strong end with equivalents a position continue sheet flexible financial the very We million cash of at balance and and $XXX.X the quarter. hand

cash million, compared of early flow enough primarily new improvement the $X.X than to cash free an investments $X.X had and which the XXXX. more of million, liquidity in QX, reductions through we by to profitability. in have our completed breakeven fund we as prior significant cash We In and us a of usage driven PP&E to headquarters was period, build-out flow

to Turning our now guidance.

on have solution is integrated offer customers. again revenue provided For the made us impact deeply higher third-party. Weave, Digital a with Digital Forms a a more by million integrated take compelling and impact and product offer it product our a QX QX our revenue retention the offered Digital will the decision revenue revenue. XXXX to QX past in customers in our would net revenue. will replace QX, Ending planned. anticipated product have impacted partnership the product this product partnership to with product we to our more an and occur in decided from to partner two for partner it our years, margins XXXX. end negative and have in-house We that Forms than In in-house platform, guidance this had product negatively offer significantly allows This Digital transition throughout Forms a fully time the more as forms partnership for is we year our that in Forms a we will product to $X full-year built new But transition the earlier approximately

And Although while as month it is this is since an we the this to mentioned pandemic forecast, regarding in QX best transition seen are we our Brett early by was headwind COVID have events the for QX. indication our traction hit. a September in events, encouraged events live is encouraging. previously,

we noticeable In and improvements see the continue will mid-term. addition, margin near over to

competencies to improving benefits with remaining experience. have margins, certain achieve and our and focused core the improving here, of on the customer Brett also we engagement changed As discussed already our dual have I third-parties our

total non-GAAP quarter, range $XX we and the million $XX to expect fourth range in revenue loss these for a million. in Given the $X.X operating to of considerations of million million the $X.X

of We for approximately expect a quarter. the million have to weighted count share average shares XX.X fourth

higher August given is million than we call, to $X of X the $X For on midpoint in is million, March $XXX.X which earnings previous decrease million to a to on XXXX X versus revenue our the product total forms but expectation the full-year, expectation our expect we be transition. initial due $XXX.X range the provided million

operating which in of to a $XX full-year as XXXX loss our be operating percent million range non-GAAP assumes expect loss We of the million, in improvement to revenue. fiscal our $XX

million have of average a XX.X now for the expect questions. that, We to weighted approximately happy shares count to full-year. share With take will be your we Operator?

Operator

Stifel. Instructions] Thank And you. [Operator of Lane from hear first Parker we'll

Matthew Kikkert

questions. lot taking Kikkert Matthew a Thanks on my is This for for Parker.

First placed How off, talked do dedicated go-to-market team you Alliance traction you of you Dental Care a multi-location about? for it practices in been that opportunity multi-location of a has practices? like that have attention outside lot seems set the the those And on recently.

Brett White

Thanks Yes. for the question.

then take you part. So can first the I'll follow-up. Alan, And

So been yes, on to lot that attractive product of product we spending the product. to working make the time a We've capabilities today some We've traction. have been multis. announced seeing more our enhancements improve

We building yes, That for pipeline dedicated they're locations. It's Alan, And their anything and have we the add? a sure, team, individual team. that longer are do small now. cycle, than to sales is pipeline. building a a

Alan Taylor

Yes. We're that to report a flesh muscle developing to can sales, as kinds out team of you having a and to new to pipeline that And really monitor behave continues these on. expect, And pipeline. space but counterparts sales, would sales mid-market those bit meet little respect with markets. for and and in in we DSOs other a their the service continue to to us product the more multi-app as go wonderful reflect enterprise like and requirements opportunity evolve after the a

Matthew Kikkert

then expanding And to Or are part solely hear. your Utah? are in secondly, go-to-market anticipate the as salespeople remainder talent you well? do throughout on hiring remote you then as focused you And to continued great revamped year? That's motion, Okay. of of the still

Alan Taylor

slowing. sales year, anything, be And positive through news going than what to more the for there. that us. attrition there see going head the sales that as more ramped is in is sales which gone although be count, will, we've obviously, is we the the improvement focus we're We good is many But really on do focused we So to the productivity of productivity.

Brett White

be as ourselves sales can lot certainly, talent won't far other the talent in we is. talent a As great Utah. to in There locations, of hiring on limit find we focused if But we're going is locations. where

Matthew Kikkert

Okay. Thank you much for questions. very taking

Operator

of America. Funk Next, we'll Bank hear of Instructions] [Operator from Michael

Michael Funk

evening. Yes, thank this the questions you for

mentioned You flywheel increased. productivity and for sales revenue of the a -- has the times growth few sorry, about the effect

You from also mentioned negative effect the forms.

we So sales productivity productivity how cycle as revenue those next then of couple forums growth does should think the the sequencing improves bring and first about the ramp as of quarters back in-house? you and that

Alan Taylor

The developing were we as that are and We we forms -- product the forms, the working were we growing place. had with partner. still already in product

third it quarter. mentioned, I us in developments given to a more necessary As that quickly the became for little do the

So in that. low-margin forms. done We prior very we've with were a situation the

implications little at bottom us to but top the margin taking bottom a from replace to line, in is it revenue. It will in-house months, forms So anticipate a the line our replace all more us impact. even going long though very while than a rev line take that little perspective. six the to actually, us improvement top for take good the the are We longer be margin won't no significant, line

Brett White

that, process through year annual our our in the plan XXXX. earnings we've get revenue on Board sharing next we'll We'll approval, our for it given call. And the We're so then you just of for QX. outlook and in overall be next operating kind of finalizing trajectory, finalize then for

Michael Funk

or productivity we gross also events commentary And Appreciate year on and of, additions I one relative comparison-wise, as where or the to are even Maybe you a industry ago? months ramp say, in-person. with it. and kind just, now those up well could. then increases, more, where as conferences ago were, Got XX qualitatively if you even gave

Alan Taylor

sell back, September the The hit. back encouraging levels. we've But our have leads both Sure, come that pre-pandemic becomes even pandemic with for had that the since an at it's events effect It's that we show, from so, well of other The very that them And month to later, around do office. to attendance at or respond. the one product. to the Weave that attend exposed as view I seeing at worked in would a productive have way they events booth. armful when can those as best called positive presents so is come had people and not us deals events opportunity higher home for it and a be halo or least of become energy an believe probability the thing marketing about we that Weave able enthusiastic Weave success. a of have they're the see products They're these contacted these that the to

Michael Funk

questions. Great. it. Thank the you for I appreciate

Operator

Raymond our James has question. [Operator Instructions] Alex Sklar next of

Unidentified Analyst

get This Alex. developments, Alan, of question. is count any a Analytics from Scheduling. the You will Online [Jonathan] revenue per know location you for for has lot how Thanks be new location can subscription product have just taking I including (ph) one us. the Review don't about and It But on talk we longer. trended?

of just or price are these future contributing points of increasing kind curious opportunity there. a more to growth So Thanks. if

Alan Taylor

enthusiastic you amounts in obviously, about so question. values stable are for that, thank our do trending improving We we up far, have slightly on But contract or stable customers. annual the we've products revenue that. monthly and been very queue So for MRR. We've the seen

that's positive of the economic despite we're conditions growth So a facing. sign

Operator

else there Was caller? anything

Unidentified Analyst

No, thank you.

Operator

Mark Schappel of Loop Capital question. our next has

Mark Schappel

with you wondering was you, I talk you you thank within about range? starting respect my quarter. customer Alan, the questions. in Was the with normal taking churn just for it saw what could to Hi, if

Alan Taylor

track We obviously very It closely. was. that

result. You rate, at That's a can from gross see our retention they remained XX%. revenue positive

customer's standpoint, a this consistent of ordinary. course from It's anything the we're been -- out not the through churn seeing not of we're So year.

that. pleased very about we're so And

Brett White

customer think I is just When would thing. me folks base. add about add -- The often, a one when churn-y they about SMB, other -- let thing that think

another gone really their They to is built are businesses. go craft. who They've school. Our These individuals, dedicated their option to something customer have else. base don't basically to incredibly do They lives resilient.

our very for company, our is business retention good, churn turnover, I and SMB can And business churn, gross tell So is churn low. very very, low. our an very you is

Mark Schappel

thanks. respect Brett, what give details responses to macro environment. on more seeing was if customer And a could Great, us like you're the wondering you then I just few with in

it were some last bit. that to a sales was quarter, noted quarter? cycles What starting maybe seeing think I this extend little you are

Brett White

Yes.

to share It's pretty we're happy So what seeing. actually interesting.

historically, now Maybe a doctors purchase So we're make -- maybe in administrator And the getting seeing so there's office the involved. decision. doctor practice, maybe is the of both would the involved. getting involved, getting if they're maybe couple

So earnings call, -- but not in like to it's have sales dramatic. we mentioned last our bit, elongated cycles appear a not

pretty The as is other steady retention. mentioned, we're thing gross seeing, Alan

I quite think spend. ensure owners, well is And customers, product against for SMB their Weave they're to that business review. are the that looking value getting up holding all all

value that And and product for super features that They're so sure continuing the product getting of our one we're new deliver value that that's are to things focused our have. products to customers more the more in -- new they we're and is just happy. functionality release even making on

is So the interesting very, holding very point thing the sales, other price the well. on up new is

another sign. encouraging that's so And

Mark Schappel

you. Thank Great.

Operator

are further questions today's time. [Operator conference. at no Instructions] does It this Also, conclude there appears that

You may now disconnect.

Weave Communications (WEAV) 5 Nov 222022 Q3 Earnings call transcript