Q4 2023 Earnings Summary
- Rapid expansion into the Specialty Medical vertical: Weave's Specialty Medical segment is now the company's fastest-growing vertical, recently surpassing veterinarian as the #3 vertical. This growth is driven by a larger Total Addressable Market, increased inbound demand, and successful integrations with practice management and EMR software in this segment. ( , , )
- Significant growth opportunity in the Payments business: Weave's Payments revenue is growing faster than its subscription revenue, which itself is accelerating. The Payments business currently represents less than 10% of total revenue but is expected to grow meaningfully over the next several years. The company is investing in integrating Payments functionality more deeply into customer workflows and has hired a dedicated general manager for Payments to drive adoption. ( , )
- Experienced leadership to drive scaling efforts: The appointment of David McNeil as Chief Revenue Officer brings significant scaling expertise from his time at HubSpot, where he helped grow revenue from $90 million to nearly $1 billion. His focus on scaling the business from $170 million to $500 million, improving the Payments business, and leveraging strategic partnerships positions the company for accelerated growth. ( , )
- Weave expects a modest decrease in its year-over-year revenue growth rate in Q1 2024 due to lapping the initial impact of increased onboarding and payments revenues from the prior year, which may signal slowing growth momentum.
- Expansion into new specialty medical sub-verticals may face challenges due to Weave's lack of brand recognition in these areas, potentially impacting the company's ability to drive growth in these segments.
- Weave is discontinuing the reporting of certain metrics, such as "boomerang customers," indicating that these metrics are no longer a key focus, which may raise concerns about transparency in competitive dynamics.
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Specialty Medical Growth
Q: What's driving Specialty Medical's rapid growth?
A: Specialty Medical has become our fastest-growing segment, overtaking veterinarian as our No. 3 vertical. Growth is driven by a larger TAM, increasing inbound demand, more integrations, and better product-market fit. -
2024 Revenue Outlook
Q: What's the expected revenue growth shape in 2024?
A: We anticipate revenue growth in 2024 to be consistent with 2023. The biggest upside comes from partnerships on integration and other avenues. While payments contribute, the more significant compare in Q1 relates to onboarding revenues, which previously grew 150% year-over-year but are now at a stable level. -
Payments Growth Potential
Q: How will new payment features impact adoption?
A: We see significant opportunity in payments by integrating functionality into office workflows, driving adoption. Payments currently make up less than 10% of revenue but are growing faster than subscription revenue. We expect payments to grow meaningfully as a percentage of revenue over the next several years. -
New CRO's Focus
Q: What are David McNeil's priorities for 2024?
A: Our new CRO, David McNeil, aims to scale the business from $170 million to $500 million. His priorities include enhancing our payments business, focusing on multi-location segments, and expanding strategic partnerships. -
Customer Growth and NRR
Q: Will customer additions and NRR improve in 2024?
A: We expect new customer additions to follow the same pattern, with potential acceleration from partnerships. We anticipate higher Net Revenue Retention (NRR) in 2024, particularly in the second half of the year. -
Guidance Philosophy
Q: What are the assumptions behind 2024 guidance?
A: Our philosophy remains to provide guidance with high confidence in delivery. While demand and execution are strong, we focus on guidance we can meet or exceed. -
Next-Gen Platform
Q: When will the next-gen platform release, and benefits?
A: The next-gen platform is expected to release around mid-2024. It offers a dynamic app and web platform, improving usability, especially for multi-location offices. Over 1,000 customers are testing it with positive feedback. -
Employee Retention
Q: How did you reduce employee attrition from '22 to '23?
A: By improving clarity on priorities, increasing ownership, and fostering collaboration, we materially improved employee attrition rates. Tools like weekly "vital signs" meetings enhanced teamwork. -
Hiring Plans
Q: What's your hiring plan for 2024, especially go-to-market?
A: We added sales capacity in 2023 and plan to continue expanding sales, product, and engineering teams in 2024, based on execution and metrics. -
Specialty Medical Integrations
Q: What integrations are you working on in Specialty Medical?
A: We're integrating with practice management and EMR software in sub-verticals like physical therapy, medical aesthetics, medspa, general practice, and plastic surgery. We emphasize "front door" integrations through authorized partnerships. -
Integration Results
Q: What tangible results from added integrations?
A: We've seen strong demand from existing and new customers after releasing integrations like Dentrix Ascend. Specialty Medical's growth reflects the tangible results of our integration efforts. -
Location Growth
Q: How did location growth trend, and outlook for 2024?
A: Customer acquisition improved each quarter in 2023, with Specialty Medical leading growth, though dental remained the major contributor. We plan to continue increasing both gross and net new customers throughout 2024. -
Boomerang Customers
Q: How many boomerang customers this quarter?
A: The trend remained consistent with previous quarters. We've decided to stop reporting this metric as it's not a key internal focus.
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