Weave Communications, Inc. (WEAV) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 was a beat-and-raise quarter: revenue of $61.3M grew 17.1% YoY and came in above consensus; non-GAAP EPS $0.03 also exceeded the Street, while gross margin reached a record 73% non-GAAP . Versus consensus, revenue was ~$60.7M* and EPS ~$0.02*, implying beats on both lines.
Management raised full-year guidance: revenue to $238.0–$239.0M (midpoint up from $236.8–$239.8M) and non‑GAAP operating income to $3.3–$4.3M (up from $1.2–$3.2M) .
Mix and execution improved: payments revenue grew at more than double total growth, and non‑GAAP operating income (2.7% margin) exceeded the high end of guidance; free cash flow was $5.0M .
Offsets: GAAP net loss widened to $8.7M on elevated stock‑based comp and integration costs, while retention moderated (NRR 94% vs 98% YoY; GRR 90% vs 92% YoY) as WEAV laps prior price actions and ramps newer medical verticals .
Stock catalysts: consistent beats (15th straight above top-end revenue guide), raised FY outlook, accelerating AI/automation roadmap (TrueLark) and new payment features (surcharging, bulk payments) supporting upsell and mid‑market momentum .

What Went Well and What Went Wrong

What Went Well

“15th consecutive quarter of exceeding the top end of our revenue guidance,” with Q3 revenue $61.3M (+17.1% YoY) and record 73% non‑GAAP gross margin; free cash flow of $5.0M underscored improving efficiency .
Payments outperformed: “Payments revenue again grew more than double our total growth rate,” aided by new features (surcharging and bulk payments) targeted at multi‑location practices .
Strategic positioning: Authorized, secure integrations with leading practice systems cited as a competitive moat; example wins include a 600+ location specialty medical group (initial ~50 locations live), expanding mid‑market pipeline beyond core dental .

What Went Wrong

Retention moderation: GRR 90% (vs 92% YoY) and NRR 94% (vs 98% YoY) as the company lapped the 2024 price increase and scaled newer medical verticals with initially higher churn/lower ASPs; management expects normalization as integrations mature .
GAAP losses widened: GAAP net loss of $8.7M (vs $5.9M YoY) and GAAP operating loss of $8.9M reflect elevated stock‑based comp ($9.9M) and integration costs tied to TrueLark .
Onboarding and hardware remain drags: Onboarding gross margin was –173% and phone hardware –5% in Q3 as WEAV prioritizes software-led model; these lines continue to weigh on consolidated margins despite subscription strength .

Financial Results

Headline vs. Consensus (Q3 2025)

Metric	Actual (Q3 2025)	Consensus Mean	Surprise
Revenue ($)	$61,342,000	$60,672,320*	+$669,680 (~+1.1%)
EPS (Non‑GAAP, basic)	$0.03	$0.017*	+$0.013

Values with asterisk are from S&P Global consensus and may reflect methodology differences (e.g., EPS basis). Values retrieved from S&P Global.

Sequential and YoY Performance

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($)	$52,386,000	$58,470,000	$61,342,000
GAAP Gross Margin (%)	72.0%	71.7%	72.3%
Non‑GAAP Gross Margin (%)	72.5%	72.3%	73.0%
Non‑GAAP Op Inc ($)	$1,392,000	$70,000	$1,674,000
GAAP Net Loss ($)	$(5,879,000)	$(8,711,000)	$(8,668,000)
Non‑GAAP Net Inc ($)	$2,143,000	$1,545,000	$1,950,000
Non‑GAAP EPS (basic)	$0.03	$0.02	$0.03
Adjusted EBITDA ($)	$2,249,000	$1,059,000	$2,656,000
Net Cash from Ops ($)	$4,500,000	$5,445,000	$6,069,000
Free Cash Flow ($)	$3,541,000	$4,478,000	$5,047,000

Segment/Disaggregated Revenue (Q3 2025 vs Q3 2024)

Segment	Revenue Q3’24 ($000)	Revenue Q3’25 ($000)	Gross Margin Q3’24	Gross Margin Q3’25
Subscription & Payment Processing	50,375	58,760	78.3%	78.0%
Onboarding	845	821	(137.4%)	(172.7%)
Phone Hardware	1,166	1,761	(47.6%)	(5.4%)

KPIs and Balance Sheet

KPI	Q3 2024	Q3 2025
Gross Revenue Retention (GRR)	92%	90%
Net Revenue Retention (NRR)	98%	94%
Cash & Equivalents ($000)	51,103	64,394
Short‑Term Investments ($000)	47,534	15,897
Cash + ST Investments ($000)	98,637	80,291

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q3 2025	$60.1–$61.1	$61.3 actual	Above high end
Non‑GAAP Op Inc ($M)	Q3 2025	$0.0–$1.0	$1.7 actual	Above high end
Revenue ($M)	Q4 2025	N/A	$62.4–$63.4	New
Non‑GAAP Op Inc ($M)	Q4 2025	N/A	$1.5–$2.5	New
Revenue ($M)	FY 2025	$236.8–$239.8	$238.0–$239.0	Raised midpoint
Non‑GAAP Op Inc ($M)	FY 2025	$1.2–$3.2	$3.3–$4.3	Raised
Weighted Avg Shares (M)	FY 2025	76.5	76.3	Lowered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/Automation (TrueLark)	Q1: Announced deal to acquire TrueLark to drive 24/7 agentic AI engagement . Q2: Closed acquisition; integration and joint GTM underway .	Expanding AI receptionist (voice coming), mid‑market upsell already underway; “Fusion” integrated inbox and “intelligent actions” roadmap (payments/RCM workflows) over next few quarters .	Accelerating
Payments	Strong momentum noted in Q1; platform enhancements ongoing . Q2: Payments growth more than double total; integrations with Ortho2/IDEXX .	Growth again >2x total; launched surcharging and bulk payments; workflows at core of differentiation .	Strengthening
Specialty Medical & Mid‑Market	Q1: Record specialty medical sales; integrations expanded serviceable market . Q2: Specialty medical became #2 vertical by count; mid‑market traction accelerating .	Signed 600+ location specialty medical group (initial ~50 locations onboarding); pipeline diversifying beyond dental via EMR partnerships .	Scaling
Integrations & Compliance	Focus on authorized APIs; new integrations launched (e.g., Ortho2, IDEXX) .	Emphasis on authorized, secure integrations as a moat; cited litigation risk around unauthorized methods .	Strategic moat
Retention/Churn	GRR/NRR strong through H1; Q2 NRR 96% (GRR 90%) .	NRR 94% (GRR 90%); CFO explains lapping prior price increase and early-stage churn in new verticals; expects normalization as integrations mature .	Moderating but explained
Operating Leverage	Q1: Non‑GAAP operating breakeven; improving cash flow . Q2: Non‑GAAP op profit positive; adj. EBITDA improved .	Q3: Non‑GAAP op margin 2.7%; raised FY non‑GAAP operating income; discussed balancing growth and profitability into 2026 planning .	Improving

Management Commentary

Strategic positioning: “This quarter… our 15th consecutive quarter of exceeding the top end of our revenue guidance. Gross margin reached a record high of 73%... This strong performance translated into another solid cash flow quarter with $5 million of free cash flow” — Brett White, CEO .
Payments differentiation: “Payments revenue again grew more than double our total growth rate… Surcharging helps our customers manage rising costs… Bulk payments allows practices to initiate multiple payment requests simultaneously” .
Retention dynamics: “We have lapped the effect of [the 2024] price increase, and our net revenue retention rate has decreased commensurately… In early phases of a new vertical… churn [is] higher… Over time, we expect churn to normalize and ASP to increase as integrations mature” — CFO .
Guidance tone: “We are raising the midpoint of our full‑year revenue guidance… and raising our full‑year non‑GAAP operating income guidance” — CFO .

Q&A Highlights

Payments adoption & roadmap: Management reiterated payments growth is driven by nailing workflows and authorized EMR integrations; integration of TrueLark into payments and RCM workflows (e.g., past‑due follow‑ups, eligibility checks) is on the roadmap over the next few quarters .
Specialty medical & mid‑market: 600+ location specialty medical group win via EMR partnership; initial ~50 locations onboarding; strong interest in integrated inbox and automation roadmap; still early in lifecycle with robust mid‑market pipeline .
Integrations strategy: Programmatic rollout prioritizing largest EMRs; integrated deployments yield higher ASPs and retention; upsell opportunities arise as integrations go live .
Profitability/leverage: 2025 investments targeted at GTM and engineering (integrations, AI); management aims to balance growth with incremental profitability, with more 2026 color next call .
AI receptionist role: Augments front desk by offloading lower‑value tasks; voice capabilities coming; early traction in single‑location and mid‑market accounts .

Estimates Context

Revenue: Actual $61.34M vs consensus $60.67M*, a ~1.1% beat .
EPS: Non‑GAAP EPS $0.03 vs consensus ~$0.02*, a beat; note WEAV reported $0.03 (basic) and $0.02 (diluted) non‑GAAP per share .
Q4 setup: Street revenue for Q4 is ~$63.14M*, broadly consistent with company guidance of $62.4–$63.4M; Q1 2026 revenue ~ $64.67M*; EPS estimates Q4 ~$0.033*, Q1 2026 ~$0.015*.

Values with asterisk are from S&P Global consensus and may reflect methodology differences. Values retrieved from S&P Global.

Key Takeaways for Investors

Beat-and-raise quarter: revenue and EPS above Street; FY revenue midpoint and non‑GAAP operating income raised — a constructive setup into Q4 seasonally stronger period .
Quality of growth improving: record non‑GAAP gross margin (73%) and higher free cash flow underscore operating leverage as scale and cloud costs are leveraged .
Payments and AI are catalysts: payments growing >2× total growth aided by surcharging/bulk features; AI receptionist and integrated “Fusion” inbox should drive attach/expansion in 2026 .
Retention moderation is explainable: NRR/GRR headwinds reflect lapping 2024 price action and early specialty medical mix; management expects normalization as integrations deepen .
Mid‑market pipeline real: large specialty medical group (600+ locations) and EMR‑aligned wins validate enterprise‑grade positioning and authorized API moat .
Watch mix drags: onboarding and hardware remain negative margin lines; continued software/payment mix shift is key to sustaining margin gains .
Near‑term focus: execution on Q4 guide, AI feature launches (voice), and initial RCM/payment workflow automation integration milestones are likely stock drivers .

Appendix: Additional Relevant Press Releases (Q3 2025)

Authorized integration vendor in Henry Schein One API Exchange, strengthening dental footprint and secure integrations positioning .
Abhi Sharma named CTO to accelerate AI roadmap and TrueLark platform unification .
Q3 2025 results date announced (Oct 30) .