Weave Communications - Earnings Call - Q2 2025

Executive Summary

• Q2 revenue was $58.5M (+15.6% y/y) with GAAP gross margin 71.7% and non-GAAP gross margin 72.3%; management cited a “record sales quarter,” accelerating payments, and strength in Specialty Medical (now second-largest vertical) as key drivers.
• Non-GAAP EPS was $0.02 vs S&P Global consensus ~$0.00*, and revenue beat by ~$0.7M vs ~$57.8M*; gross margin (GAAP) was ~71.7% vs 72.1%* consensus, a slight shortfall.
• FY25 guidance was maintained for revenue ($236.8–$239.8M) and raised for non-GAAP operating income to $1.2–$3.2M (from $0.0–$3.0), signaling improved profitability expectations in 2H25; Q3 revenue guided to $60.1–$61.1M and non-GAAP operating income to $0.0–$1.0.
• Catalysts: continued payments attach/usage growth, mid-market traction, AI automation ramp via TrueLark integration (closed mid-May) and new EMR/PMS integrations (e.g., Ortho2 Edge, IDEXX Neo) expanding reach to “thousands of new locations”.

What Went Well and What Went Wrong

What Went Well

• Payments outpaced subscription growth and contributed to the revenue beat; attach and volume capture both improved, with “massive opportunity” remaining given underpenetration.
• Specialty Medical delivered a record quarter and rose to Weave’s second-largest vertical by customer count; integrations (Veradigm, Practice Fusion, Prompt) and new additions (Ortho2 Edge, IDEXX Neo) broadened TAM and demand.
• Positive cash generation: Q2 operating cash flow $5.4M and free cash flow $4.5M; year-to-date FCF of $3.4M vs $0.7M last year indicates improving liquidity and operating efficiency.
  Selected quote: “We delivered... improved gross margins, and increased free cash flow... Specialty Medical has grown to be our second-largest vertical... We also closed our acquisition of TrueLark” — CEO Brett White.

What Went Wrong

• Retention moderated: GRR fell to 90% (from 92% y/y) and NRR to 96% (from 97%), reflecting some attrition and softer expansion vs last year.
• GAAP operating loss widened to $(10.2)M from $(9.3)M y/y as Weave accelerated sales hiring and absorbed one month of TrueLark opex; non-GAAP operating income was modest at $0.1M.
• Gross margin was below S&P consensus (71.7% actual vs 72.1%*), though it improved y/y and q/q; onboarding and phone hardware remain gross-loss contributors.

Transcript

Operator (participant)

Greetings and welcome to Weave 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 at 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 would now like to turn the conference over to your host, Mr. Mark McReynolds, Head of Investor Relations. Thank you. You may begin.

Mark McReynolds (Head of Investor Relations)

Thank you, Rob. Good afternoon and welcome to Weave Communications' 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, entail assumptions made as of today's date, and are subject to various risks and uncertainties described in our SEC filings. We've disclaimed 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.getweave.com. With that, I will turn the call over to Brett.

Brett White (CEO)

Thank you, Mark, and thank you to everyone joining us today. Weave delivers an AI-powered patient interaction platform tailored to the needs of small and medium-sized healthcare practices. Our solution unifies communication, scheduling, payments, practice insights, and more to one seamless platform. We help our customers grow their businesses, keep schedules full, accelerate collections, and deliver exceptional patient care. As SMB healthcare practices look to modernize, Weave improves 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 TrueLark. 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 SMB healthcare practices report a growing patient base. 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 and appointment reminder workflows reduces administrative burden and streamlines patient communications to keep schedules full.

For example, in its first year in business, a single practitioner optometry office generated $70,000 in additional booked appointments using Weave's 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 24/7 online scheduling, practices that embrace technology are better positioned to stand out in competitive local markets. For instance, 60 locations in a large Dental Service Organization used Weave's Missed Call Text feature to generate $1.5 million in revenue in a single quarter, scheduling over 7,200 appointments for missed calls. Another key priority for SMB healthcare practices is accelerating revenue cycles to strengthen financial health by reducing receivables days outstanding, increasing collections, and automating billing. As an example, a single-location dental practice collected $100,000 in outstanding balances in under a year using Weave's Text to Pay.

Finally, McKinsey research reports that AI has the potential to automate up to 45% of administrative tasks in healthcare. That's not just cost reduction; it's capacity creation. 80% of practices that reported fast growth say new office technology was a contributing factor, and over 60% reported that current technologies make hiring easier. These strategic imperatives are shaping the future of healthcare delivery, and every technology investment must directly support these priorities. That's where Weave comes in. In May, we acquired TrueLark, an AI-powered workflow automation platform that enables 24/7 online scheduling, missed call response, and marketing lead conversions. This acquisition marks a major step in bringing intelligent automation to the workflows that matter most to small and medium-sized healthcare practices. TrueLark helps practices boost revenue, keep schedules full, and reduce front office burden. For one customer, TrueLark handles over 15,000 conversations monthly across 60 locations.

We're rapidly integrating TrueLark and Weave across go-to-market and product teams to bring this automation to our customers and prospects. Joint selling to mid-market dental groups is already underway, and we're progressing towards offering TrueLark as an add-on within a unified Weave inbox. By unifying these AI capabilities into a single experience, Weave is positioning itself as the go-to platform for simplifying operations and increasing impact across key healthcare 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 continue to improve as we launch more authorized integrations with electronic medical record systems. Our authorized integrations with Veradigm, Practice Fusion, and Prompt are off to a very strong start just five months post-launch. We also recently launched authorized integrations with Ortho2Edge, 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 veterinary inspections, including two multi-site physical therapy management service organizations signed in Q2, representing over 70 clinic locations combined. Everything we do at Weave is centered around helping healthcare practices grow and thrive, and our customers continue to take notice. In G2's summer 2025 report, we've ranked first in 34 categories and remained the top-rated platform in the grid for patient relationship management. G2 rankings are driven by real customer reviews and reflect the trust practices placed in Weave 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 Abhi Sharma is being promoted to Chief Technology Officer. Abhi was originally hired as our SVP of Technology, and in his short time at Weave, he has exceeded expectations, demonstrating strategic vision and operational excellence.

He's the clear choice to lead our technology organization. This promotion reflects our planned succession strategy and ensures 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.

Jason Christiansen (CFO)

Thanks, Brett, and good afternoon, everyone. I'll begin with a quick update on our acquisition of TrueLark. 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-3 shelf registration with the SEC to register the resale of the equity issued under the terms of this deal. This is standard practice, and we have no current plans to offer or sell additional securities under this registration. As Brett mentioned, we are already executing on our integration strategy with initial efforts focused on expanding product integration and aligning go-to-market programs. TrueLark's momentum in multi-location healthcare is highly complementary to Weave's 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 $700,000.

This represents 15.6% year-over-year growth. As a reminder, Q2 represents our toughest year-over-year revenue comparison of 2025, as we lacked 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 TrueLark revenue and expenses. Gross revenue retention in Q2 was a healthy 90%, which remains in the top tier for SMB SaaS companies. For the past two years, net revenue retention has consistently been between 95% and 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 mid-market 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 TrueLark and 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 that we will continue to gain operating leverage in general and administrative expenses. Operating income for Q2 was $70,000, an improvement of $1 million compared to Q2 2024. Operating income also exceeded the midpoint of guidance by $600,000. 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 TrueLark. 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, a $2.7 million improvement over the same period last year.

Looking ahead, our outlook for the third quarter of 2025 reflects steady progress. We expect revenue to be in the range of $60.1 million-$61.1 million. We expect non-GAAP operating income to be in the range of break-even to $1 million. For the full year, we expect revenue to be in the range of $236.8 million-$239.8 million, representing an 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-$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 in 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.

Operator (participant)

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. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Alex Sklar with Raymond James. Please proceed with your question.

Alex Sklar (VP)

Great, thank you. Brett, first one for you, just great to hear the specialty medical success again this quarter, second largest vertical for you. Any commonality in terms of where you're seeing the most success within specialty medical? I'm curious, how do those lands look in terms of coming on with one of your larger integrated bundles relative to your kind of average dental, optometry, vet land? Thanks.

Brett White (CEO)

Sure. I'll take the first one and then let Jason add some detail on the second one. 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 in, we want to get the product-market fit right. Once we kind of get rolling there, we start adding additional practice areas. We're still very focused in medical aesthetics, which we call plastic, physical therapy. Those are probably the big ones. General practice has also done quite well. The way they roll, when we move into a new vertical, the way it kind of works is we enter, generally, the ASP 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.

As you mature in that segment, say over the next 12-36 months, generally, ASP rises, CAC goes down because your brand is more well-known, and churn comes down as you perfect product-market fit. That's kind of how it rolls out. As far as how they're landing now, I think it's pretty consistent.

Jason Christiansen (CFO)

Yeah. When you look at dental and the 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. 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 in market to deepen those integrations as well. The deepening of the integrations is what also allows those customers to move up the stack into the elite and ultimate bundle. You will see that dynamic relative to dental and optometry. There are a couple of points of improvement there.

One is in just new location acquisition, but then two, 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.

Brett White (CEO)

Yeah, I'll just add, you know, we still sell, actually, we sell a lot of non-integrated kind of core product into specialty medical. When we build the integrations, there's an upgrade opportunity, but also the integration creates new demand. There's kind of two actions at play there that move specialty medical customers up the ASP chain, if you would.

Alex Sklar (VP)

Okay. Great follow-up. Thank you both there. Maybe Jason, one follow-up for you. Just in terms of thinking through one of the big drivers of NRR payments, how has the growth trended there for that solution relative to kind of overall subscription? 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 as the years progress?

Jason Christiansen (CFO)

Thank you for the question. In terms of payments performance, it continues to grow much faster than our subscription line of business as it has in the past. We've talked about how there's been incremental focus on payments really coming into this year where we've made targeted investments on the payments line of front along with the other growth factors. We're beginning to see good improvements in progress on that front where the attach rates of payments within our install base continue to move up and continue to make good and steady progress. There are two layers to that. One is getting the attach rate, and the second is then capturing all of the volume of the customers. We're making progress on both fronts. The work's not done on either of those. We still have a massive opportunity, and we're significantly underpenetrated in that opportunity.

It continues to be a focus for us.

Alex Sklar (VP)

Okay. Great. Thank you both.

Operator (participant)

Our next question comes from Parker Lane with Stifel. Please proceed with your question.

Matthew Kikkert (Equity Research Associate)

Hi. This is Matthew Kikkert on for Parker. Thank you for taking my questions. To start, could you just detail maybe the progress of the integration with the TrueLark team itself, how the assets are being integrated with yours, the combination of the go-to-market approach, and then also any early feedback you may have received from customers on the TrueLark product?

Brett White (CEO)

You bet. We closed the acquisition in mid-May and started our integration activities shortly thereafter. I think the two major areas of integration are on the go-to-market side and on the product side. On the go-to-market side, TrueLark was well established within kind of large DSO, multi-location type businesses. They have the motion that works there. They've got the sales motion, the delivering the proof of concept, the onboarding, and the support. We immediately took that capability and combined it with our multi-location sales team. Now they're joint prospecting. They are sharing pipelines. What's really interesting is how the Weave multi-location 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 TrueLark in there, and they start building that trusted relationship. Those activities, kind of joint prospecting, started immediately and are underway. On the rest of the business, we're right now working to build out the capability of the platform to land and onboard successfully single locations. The TrueLark business was really designed around multi-locations. They didn't really have the onboarding and support capability to bring on hundreds of new locations individually. We don't want to sell the product into single locations before we're able actually to deliver that great onboarding experience. We're building that team, building that go-to-market map. The next activity there would be to start selling TrueLark into our install base, and we expect that to kind of kick off in Q4. Lastly, the final piece would be to start selling it into new single-location product prospects, and we expect that to be Q1.

One of the important pieces there is going to be building out the product experience. We want to move to where we have a combined inbox, so where you get both the TrueLark services and the Weave services in a combined inbox, so you can manage your experience all in one place. The product teams, the joint product teams, are hard at work delivering that. That really is what we would take to market for the single locations. As far as feedback, during the diligence process, we talked to a lot of the TrueLark customers, and they were very, very happy with the product. We continue to hear that. We have had actually a fair bit of inbound after the announcement of, "Hey, this looks great.

How can I build this into my business?" There have also been some very interesting partnership opportunities of partners wanting to offer the product and the joint product. That's quite exciting. 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. We're kind of building a waitlist there on when the product and the onboarding and support process are ready for an amazing experience, combined TrueLark Weave experience, and when it's ready, we'll roll that out.

Matthew Kikkert (Equity Research Associate)

That's great color. Thank you. Secondly, I'm wondering what impact you've seen on CAC from your push to the enterprise, and maybe more broadly, what opportunities do you see to drive leverage on that sales and marketing line in coming years?

Brett White (CEO)

Right. I'll give you my view, and Jason, you can add anything. The mid-market team, we've done a complete refresh there. They've got a very experienced leader, and their sales cycle is much longer. They build a pipeline, sometimes as a proof of concept, close a deal, and then roll out over time. We were just doing some math, and their CAC is actually terrific, and it's lower than some of our other channels. We're quite pleased with the progress we're making. We're quite pleased with the pipeline they're building. The CAC is in a good place. I think the other interesting piece here that 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. The multi-location segment is growing probably high teens.

There's a lot of growth there, not only just new businesses, but also they're acquiring a lot of the single locations. Getting into that segment for us, with a product that we've now had for about a year, we think really offers some great opportunities for growth, and the CAC metrics are working. Now with this additional capability of being able to go into a DSO or go into a large multi-location, and they say, "Hey, we're not ready to talk to you, Weave, about the telephony stack. We can talk about TrueLark." The same goes the other way. We've got TrueLark is in accounts, and we can go and talk to them about telephony. We're actually really pleased. When I said I thought we had a really strong quarter, our mid-market business is definitely one of the big highlights.

Jason Christiansen (CFO)

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 NRR, our NRR historically is a measurement that is based on locations, not on logos. What that means for a multi-location group is as you expand your footprint and acquire additional locations, or as they grow their locations through that consolidation Brett talked about, our current NRR metric doesn't take credit for that and improve the NRR metric. We're not ready to report an official metric on this, but as we've looked at the multi-location customers within our customer base, what we're seeing is that their NRR 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.

That's just another proof point of the benefit that we get through that motion.

Matthew Kikkert (Equity Research Associate)

Terrific. Thank you.

Operator (participant)

Our next question comes from Brent Bracelin with Piper Sandler. Please proceed with your question.

Hannah Rudoff (Software Equity Research)

Hi guys, this is Hannah Rudoff on for Brett today. Thanks for taking my questions. Just first one, I think you already discussed it, but I just want to confirm. You were talking about TrueLark 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?

Brett White (CEO)

Yeah, the two teams are definitely working together. They're combining their pipelines, and they are engaging together.

Hannah Rudoff (Software Equity Research)

Got it. Thank you. Jason, you talked about accelerating some investments into Q2 from the second half. I'm just wondering how much investment you feel you have left that needs to be elevated over the second half, or if you've accelerated all of that investment.

Jason Christiansen (CFO)

It's a great question. 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 forward some of the hiring. We need to ramp the capacity there. If we continue to see growth that warrants a handful of additional investments here or there, that's something that we'll continue to evaluate. That's something that the throttle is within our control based on the performance.

Hannah Rudoff (Software Equity Research)

Got it. Lastly, did you see any specific dynamics in your payments business around seasonality and certain verticals maybe having more activity in the summer months?

Jason Christiansen (CFO)

Nothing in particular as it relates to Q2. Nothing to highlight here on that front. We continued to grow nicely in payments, continued to grow well, well faster than our subscription line of business. We continue to make progress on that front on both the go-to-market and the adoption side.

Hannah Rudoff (Software Equity Research)

Got it. Thank you.

Operator (participant)

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 great to hear the strengths 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?

Brett White (CEO)

One of my sayings around here sometimes is opportunity everywhere. I definitely think that's the case here. We're doing quite well in physical therapy, what we call plastics or aesthetics, in general practice, family practice. We're just kind of scraping the surface. There's like 21 sub-verticals in specialty medical, and the trick is to be methodical. If we could get 1%-5% in the not-too-distant future, that would feel pretty amazing.

Jason Christiansen (CFO)

One thing I would add to that is, you know, the gateway for a lot of this is through integrations. 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 Weave brings through, you know, an integrated interaction platform that brings in the payments elements. A lot of that opportunity also comes as an unlock as we deliver on additional integrations. 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 want to get a pulse check on where are your customers in terms of AI integration, in terms of sales conversations? How often does AI come up? How has momentum been with AI-powered assistant? I think you're about a year into the launch of that.

Thank you for the question. On the AI front, I'll say it's fairly mixed. We're absolutely seeing an increase in the amount of questions that we're getting asked. There are early adopters who are very far down the road. We see some of those within our TrueLark customer base.

There are other customers who will say they're on a much slower adoption cycle, and our primary focus is really on getting them to use even just some of the basic AI assistants that we've had in the product for a couple of years, like our review response assistant, which is a little wizard that can read an online review, understand the context, and provide a contextualized response back directly for the office to that rather than just some generic, "Oh, thank you for your message or for your review." All the customers vary from an adoption curve of trying to use those basic features all the way up to the more advanced full automation workflow solutions. Our focus is really meeting the customers where they're at and then helping them on their automation journey, which they'll all be going through over the coming years.

Brett White (CEO)

I would say we're definitely seeing an uptick in interest and question on how, and an openness to understand how AI technologies can improve their businesses, especially on the multi-location side. They're large professionally run organizations. They get it, and they know that that is really the future to, as I said in my remarks, creating additional capacity within their organization. I think one good sign is as people just use things like ChatGPT 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.

I think in the single location, 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 rote tasks for me, that would be great," as opposed to, "Oh, AI is trying to take my job.

Got it. That's helpful. 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 somewhat elsewhere in software. Does that continue to be true? What are your customers saying about either tariffs or broader concerns about 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.

Yeah, thank you. I would say as far as tariffs, it really depends on the industry and how import-heavy that industry is. For example, dental, they have to buy a lot of smocks and things like that. It'll hit them, but not the same thing. I think opto, where a large part of their business is reselling products, it's going to hurt them more, or I should say impact them more than other segments of our vertical. The answer really depends on the vertical and their business model. As far as consumer demand headwinds, things like that, we're really not seeing that. I'm going to knock on wood again here, but we're really not seeing that. I would say, yeah, we're just not seeing it on the demand side. Certainly on our business, I think we had yet record demand again this quarter.

Demand for our products certainly continues to be quite strong.

Jason Christiansen (CFO)

I was just going to say, you know, Brett also called out in his section that it was a record sales quarter for us. I think that just addresses that question from a macro perspective that we're not really seeing or experiencing it at this point.

Got it. Makes sense. Thank you, guys.

Operator (participant)

Our next question is from Mark Schappel with Loop Capital Markets. Please proceed with your question.

Tim Greaves (Equity Research Associate)

Hi, this is Tim Greaves on for Mark. Thank you for taking the question. Just one for me, I guess. Could you provide an update on where you guys stand in respect to the engineering hiring in the first half of the year? If I recall correctly, you guys, one of your initiatives was to add engineering capacity to build integrations with additional EHR systems. I just wanted to know how the hiring has been in the first half.

Jason Christiansen (CFO)

Yeah, thank you. We made progress on the hiring front, and I'll say the work's not done. We still have a little more capacity to add on the engineering front, especially not just on the practice management integration side, but also when you think about the TrueLark integration side. The teams have been hard at work getting joint roadmaps, figuring out the roadmap for how we deliver that unified inbox experience that Brett discussed. As part of that, there's some capacity and some roles that will continue to expand on the engineering front to really bring that to market as quick as we can. Yeah.

Tim Greaves (Equity Research Associate)

Okay, thank you.

Operator (participant)

Our last question is from Tyler Radke with Citi. Please proceed with your question.

Hey, thanks so much for taking our questions. This is Kylie on for Tyler. I wanted to first ask about billings. I noticed it reaccelerated nicely this quarter and closed and surpassed the delta with revenue growth. I'd be curious for your take on the trajectory of billings relative to revenue growth for the second half and into next year, especially as you expand into mid-market and add integrations and vertical expansions ramp. Should we expect it to outpace revenue growth from here?

Jason Christiansen (CFO)

Thank you, Kylie. Billings isn't a metric that we've provided 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. Those teams, those investments are beginning to ramp up, and we're seeing traction. Brett highlighted some of this traction. Unless you're referring to deferred revenue, which is our annual bill paying or our annual paying customers, that did tick up. Q2 is our largest cohort of annual paying customers, so that may be what you're referencing seeing within the P&L. Beyond that, though, when you think about how that growth within the revenue continues to progress beyond here, the investments we're making, we're seeing some modest contributions here in 2025.

That's implied within our guidance for the remainder of the year. We anticipate seeing continued progress and more meaningful progress in 2026 from those investments that we've been making.

Awesome. Thanks. Just one more from me. How are you thinking about the opportunity for price increases? Would there be opportunity this year or next year? Just an update on how Call Intelligence usage and adoption is progressing as well. Thanks so much.

Yeah. I'll take a price increase first. It's something that we'll continue to evaluate on a cohort basis as we have. Certainly not going to rule it out. It's something we're going to evaluate, especially as we get into 2026. A lot of that's really going to be tied to, one, the cohorts and, two, the value of the products that we deliver as we continue to make those investments in the innovation and the products we bring to market. Your second question, remind me your second question.

It was just an update on Call Intelligence usage and adoption.

Yeah. On Call Intelligence, it continues to make progress for us. It's been a nice contributing factor for us here in 2025. 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've brought to market. This is more of a net new product that doesn't have a well-established framework for how all the offices or standard framework for how the offices use it. 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 solution surfaces up, making it more actionable and helping them improve their efficiency, but also take advantage of those missed revenue opportunities that the solution surfaces up to the office.

Thank you so much.

Operator (participant)

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.

Brett White (CEO)

Thank you all for joining the call, and thank you again to the Weave team for all the hard work.

Operator (participant)

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.