- Second quarter total revenue of $34.9 million, up 24%
year-over-year
- Subscription and Payments revenue growth of 28%
year-over-year
- Weave launches several additions to its all-in-one
communications platform
- Weave announces Brett White as Interim CEO
Weave Communications, Inc. (NYSE: WEAV), a leading all-in-one
customer communications and engagement software platform for small
and medium-sized businesses, today announced its financial results
for the second quarter ended June 30, 2022.
“I’m very happy to report the Weave team posted another
impressive quarter of performance. We made substantial progress in
our new product delivery and Go-to-Market optimizations,” said CEO
Roy Banks. “And while I'm saddened to announce that I am stepping
down for health and family reasons, I am extremely proud of what
the company has been able to accomplish during my time as CEO. I'm
confident that Brett and the rest of Weave’s leadership team will
guide the company to further successes.”
Second Quarter 2022 Financial Highlights
- Total revenue was $34.9 million, representing a 24%
year-over-year increase compared to $28.1 million in the second
quarter of 2021.
- GAAP loss from operations was $14.6 million, compared to a GAAP
loss from operations of $14.1 million in the second quarter of
2021.
- Non-GAAP loss from operations was $10.1 million, compared to a
non-GAAP loss from operations of $8.9 million in the second quarter
of 2021.
- GAAP net loss attributable to common stockholders was $14.8
million, or $0.23 per share compared to a GAAP net loss
attributable to common stockholders of $15.0 million, or $1.12 per
share in the second quarter of 2021.
- Non-GAAP net loss attributable to common stockholders was $10.3
million, or $0.16 per share compared to a non-GAAP net loss
attributable to common stockholders of $9.2 million, or $0.68 per
share in the second quarter of 2021.
- Dollar-Based Net Retention Rate (NRR) was 102% as of June 30,
2022.
- Dollar-Based Gross Retention Rate (GRR) was 94% as of June 30,
2022.
Business Highlights
- Weave Launches its All-in-One Platform feature — Insurance
Verification
- Weave Adds Buy Now, Pay Later Offering to Streamline Payments
in Small Healthcare Practices
- Erin Goodsell Joins Weave as Chief Legal Officer
- Weave Named to List of 50 Most Inspiring Workplaces in North
America
- Weave Adds George Scanlon to Board of Directors
- Weave Named Leader in Five Categories in G2 Summer Report
- Weave, Fuse Dental Practice Management Software Launch New
Integration for Dental Practices
Brett White Named Interim CEO
Brett White, President and Chief Operating Officer, has been
appointed Interim CEO, effective August 15, 2022, as the board of
directors conducts an evaluation of candidates for the CEO role.
Roy Banks will remain in an advisory role and will also remain a
member of the board of directors through September 2, 2022.
“Roy showed a tremendous passion for the business and had an
immediate positive impact on Weave and its stakeholders during his
tenure as CEO. He established a strong leadership team, improved
our market position, and successfully served our customer base with
unique solutions that enabled the growth and health of their
business,” said Stuart Harvey, Chairperson of the board of
directors.
Financial Third Quarter and Full Year 2022 Outlook
The company expects the following financial results for the
three months ending September 30, 2022 and year ending December 31,
2022:
Third Quarter
Full Year
Total revenue (in millions)
$35.0 - $36.0
$141.0 - $143.0
Non-GAAP loss from operations (in
millions)
$(9.5) - $(8.5)
$(38.0) - $(36.0)
Weighted average share count (in
millions)
65.6
65.4
The guidance provided above constitutes forward-looking
statements and actual results may differ materially. Refer to the
“Forward-Looking Statements” safe harbor section below for
information on the factors that could cause our actual results to
differ materially from these forward-looking statements.
Non-GAAP loss from operations excludes estimates for, among
other things, stock-based compensation expense. A reconciliation of
this non-GAAP financial guidance measure to a corresponding GAAP
financial guidance measure is not available on a forward-looking
basis because we do not provide guidance on GAAP net loss from
operations and are not able to present the various reconciling cash
and non-cash items between GAAP loss from operations and non-GAAP
loss from operations without unreasonable effort. In particular,
stock-based compensation expense is impacted by our future hiring
and retention needs, as well as the future fair market value of our
common stock, all of which is difficult to predict and is subject
to constant change. The actual amount of these expenses during 2022
will have a significant impact on our future GAAP financial
results.
Webcast
The company will host a conference call for analysts and
investors on Wednesday, August 3, 2022, beginning at 5 p.m.
EST.
Individuals interested in listening to the conference call may
do so by dialing (646) 828-8193 or toll free at (888) 394-8218.
Please reference the following conference ID: 6573115. The live
webcast and a webcast replay of the conference call may be accessed
from the investor relations page of Weave’s website at
investors.getweave.com.
About Weave
Weave is a leading all-in-one customer communications and
engagement platform for small business. From the first phone call
to the final invoice and every touchpoint in between, Weave
connects the entire customer journey. Weave’s software solutions
transform how local businesses attract, communicate with and engage
customers to grow their business. The first Utah company to join Y
Combinator, Weave has set the bar for Utah startup achievement
& work culture. In the past year, Weave has been included in
the Forbes Cloud 100, Inc. 5000 fastest-growing companies in
America, and Glassdoor Best Places to Work. To learn more, visit
www.getweave.com/newsroom/.
Forward Looking Statements
This press release and the accompanying conference call contain
forward-looking statements including, among others, current
estimates of third quarter and full year 2022 revenue and non-GAAP
loss from operations and statements in the quotes of our chief
executive officer relating to our market opportunity.
These forward-looking statements involve risks and
uncertainties. If any of these risks or uncertainties materialize,
or if any of our assumptions prove incorrect, our actual results
could differ materially from the results expressed or implied by
these forward-looking statements. These risks and uncertainties
include risks associated with: our ability to attract and retain
talent; transitions in company leadership; our ability to attract
new customers, retain existing customers and increase our
customers’ use of our platform; our ability to manage our growth;
the impact of the global COVID-19 pandemic on our company; our
ability to maintain and enhance our brand and increase market
awareness of our company, platform and products; customer adoption
of our platform and products; expansion into new vertical markets;
customer acquisition costs and sales and marketing strategies;
competition; our ability to enhance our platform and products;
interruptions in service; general business and economic conditions;
and the risks described in the filings we make from time to time
with the Securities and Exchange Commission (SEC), including the
risks described under the heading “Risk Factors” in our Quarterly
Report on Form 10-Q for the three months ended March 31, 2022,
filed with the SEC on May 13, 2022, which should be read in
conjunction with our financial results and forward-looking
statements and is available on the SEC Filings section of the
Investor Relations page of our website at
investors.getweave.com/.
All forward-looking statements in this press release are based
on information available to us as of the date hereof, and we do not
assume any obligation to update the forward-looking statements
provided to reflect events that occur or circumstances that exist
after the date on which they were made.
Channels for Disclosure of Information
Weave Communications uses the investor relations page on our
website, blog posts on our website, press releases, public
conference calls, webcasts, our twitter feed (@getweave), our
Facebook page, and our LinkedIn page as the means of complying with
our disclosure obligations under Regulation FD. We encourage
investors, the media, and others to follow the channels listed
above, in addition to following Weave Communications’ press
releases, SEC filings, and public conference calls and webcasts,
and to review the information disclosed through such channels.
Supplemental Financial Information
Dollar-Based Net Revenue Retention (NRR)
For retention rate calculations, we use adjusted monthly revenue
(AMR), which is calculated for each location as the sum of (i) the
subscription component of revenue for each month and (ii) the
average of the trailing-three-month recurring payments revenue. To
calculate our NRR, we first identify the cohort of locations (the
Base Locations) that were active in a particular month (the Base
Month). We then divide AMR for the Base Locations in the same month
of the subsequent year (the Comparison Month), by AMR in the Base
Month to derive a monthly NRR. We derive our annual NRR as of any
date by taking a weighted average of the monthly net retention
rates over the trailing twelve months prior to such date.
Dollar-Based Gross Revenue Retention (GRR)
To calculate our GRR, we first identify the cohort of locations
(the Base Locations) that were under subscription in a particular
month (the Base Month). We then calculate the effect of reductions
in revenue from customer location terminations by measuring the
amount of AMR in the Base Month for Base Locations still under
subscription twelve months subsequent to the Base Month (Remaining
AMR). We then divide Remaining AMR for the Base Locations by AMR in
the Base Month for the Base Locations to derive a monthly gross
retention rate. We calculate GRR as of any date by taking a
weighted average of the monthly gross retention rates over the
trailing twelve months prior to such date. GRR reflects the effect
of customer locations that terminate their subscriptions, but does
not reflect changes in revenue due to revenue expansion, revenue
contraction, or addition of new customer locations.
Non-GAAP Financial Measures
In this press release, Weave Communications has provided
financial information that has not been prepared in accordance with
generally accepted accounting principles in the United States
(GAAP). We disclose the following historical non-GAAP financial
measures in this press release: non-GAAP loss from operations,
non-GAAP net loss or non-GAAP net loss attributable to common
stockholders, non-GAAP net loss per share, adjusted EBITDA and free
cash flow. We use these non-GAAP financial measures internally in
analyzing our financial results and evaluating our ongoing
operational performance. We believe that these non-GAAP financial
measures provide an additional tool for investors to use in
understanding and evaluating ongoing operating results and trends
in the same manner as our management and board of directors. Our
use of these non-GAAP financial measures has limitations as an
analytical tool, and you should not consider them in isolation or
as a substitute for analysis of our financial results as reported
under GAAP. Because of these and other limitations, you should
consider these non-GAAP financial measures along with other
GAAP-based financial performance measures, including various cash
flow metrics, operating income (loss), net loss, and our GAAP
financial results. We have provided a reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
measures in the tables included in this press release, and
investors are encouraged to review the reconciliation.
Non-GAAP net loss and non-GAAP net loss per share
We define non-GAAP net loss or non-GAAP net loss attributable to
common stockholders as GAAP net loss attributable to common
stockholders less stock-based compensation expense and non-cash
cumulative dividends on redeemable convertible preferred stock.
Non-GAAP net loss per share is calculated as non-GAAP net loss
divided by the diluted weighted-average shares outstanding.
Non-GAAP gross profit
We define non-GAAP gross profit as GAAP gross profit less
stock-based compensation expense.
Non-GAAP operating expenses
We define non-GAAP operating expenses, in the aggregate or its
individual components (i.e., sales and marketing, research and
development or general and administrative), as the applicable GAAP
operating expenses less the applicable stock-based compensation
expense.
Non-GAAP loss from operations
We define non-GAAP loss from operations as GAAP loss from
operations less stock-based compensation expense.
Adjusted EBITDA
EBITDA is defined as earnings before interest expense, provision
for taxes, depreciation, and amortization. Our depreciation
adjustment includes depreciation on operating fixed assets and does
not include depreciation on phone hardware provided to our
customers. We further adjust EBITDA to exclude stock-based
compensation expense, a non-cash item. We believe that adjusted
EBITDA provides management and investors consistency and
comparability with our past financial performance and facilitates
period-to-period comparisons of operations. Additionally,
management uses adjusted EBITDA to measure our financial and
operational performance and prepare our budgets.
Free Cash Flow
We define free cash flow as net cash used in operating
activities, less purchases of property and equipment and
capitalized internal-use software costs. We believe that free cash
flow is a useful indicator of liquidity that provides useful
information to management and investors, even if negative, as it
provides information about the amount of cash consumed by our
combined operating and investing activities. For example, as free
cash flow has been negative, we have needed to access cash reserves
or other sources of capital for these investments.
The foregoing non-GAAP financial measures have a number of
limitations. For example, the non-GAAP financial information
presented above may be determined or calculated differently by
other companies and may not be directly comparable to that of other
companies. In addition, free cash flow does not reflect our future
contractual commitments and the total increase or decrease of our
cash balance for a given period. Further, Adjusted EBITDA excludes
some costs, namely, non-cash stock-based compensation expense.
Therefore, adjusted EBITDA does not reflect the non-cash impact of
stock-based compensation expense or working capital needs, that
will continue for the foreseeable future. All of these limitations
could reduce the usefulness of these non-GAAP financial measures as
analytical tools.
WEAVE COMMUNICATIONS,
INC
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in thousands
except share amounts)
June 30, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
124,328
$
135,996
Accounts receivable
2,981
3,059
Deferred contract acquisition costs,
net
9,153
8,931
Prepaid expenses and other current
assets
4,198
6,461
Total current assets
140,660
154,447
Non-current assets:
Property and equipment, net
11,427
24,502
Operating lease right-of-use assets
46,660
—
Finance lease right-of-use assets
11,325
—
Deferred contract acquisition costs, net,
less current portion
7,612
7,873
Other non-current assets
1,143
663
TOTAL ASSETS
$
218,827
$
187,485
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
4,673
$
4,061
Accrued liabilities
14,142
12,250
Deferred revenue
32,287
29,511
Current portion of operating lease
liabilities
5,050
—
Current portion of finance lease
liabilities
7,728
8,485
Current portion of long-term debt
—
—
Total current liabilities
63,880
54,307
Non-current liabilities:
Deferred rent
—
4,319
Operating lease liabilities, less current
portion
46,780
—
Finance lease liabilities, less current
portion
6,179
6,558
Long-term debt
10,000
10,000
Total liabilities
126,839
75,184
Stockholders' equity:
Preferred stock, $0.00001 par value per
share; 10,000,000 shares authorized, zero shares issued and
outstanding as of June 30, 2022 and December 31, 2021
—
—
Common stock, $0.00001 par value per
share; 500,000,000 shares authorized as of June 30, 2022 and
December 31, 2021; 65,010,719 and 64,324,628 shares issued and
outstanding as of June 30, 2022 and December 31, 2021,
respectively
—
—
Additional paid-in capital
302,557
294,230
Accumulated deficit
(210,551
)
(181,898
)
Accumulated other comprehensive (loss)
income
(18
)
(31
)
Total stockholders' equity
91,988
112,301
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
218,827
$
187,485
WEAVE COMMUNICATIONS,
INC
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited, in thousands,
except share and per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenue
$
34,930
$
28,061
$
68,202
$
53,729
Cost of revenue
13,749
12,023
27,502
22,825
Gross profit
21,181
16,038
40,700
30,904
Operating expenses:
Sales and marketing
16,747
14,718
32,967
26,454
Research and development
7,428
7,871
14,632
13,707
General and administrative
11,597
7,583
21,201
13,586
Total operating expenses
35,772
30,172
68,800
53,747
Loss from operations
(14,591
)
(14,134
)
(28,100
)
(22,843
)
Other income (expense):
Interest expense
(332
)
(293
)
(625
)
(573
)
Other income (expense)
127
8
123
14
Loss before income taxes
(14,796
)
(14,419
)
(28,602
)
(23,402
)
Provision for income taxes
(19
)
—
(51
)
—
Net loss
$
(14,815
)
$
(14,419
)
$
(28,653
)
$
(23,402
)
Less: cumulative dividends on redeemable
convertible preferred stock
—
(557
)
—
(1,106
)
Net loss attributable to common
stockholders
$
(14,815
)
$
(14,976
)
$
(28,653
)
$
(24,508
)
Net loss per share attributable to common
stockholders - basic and diluted
$
(0.23
)
$
(1.12
)
$
(0.44
)
$
(1.93
)
Weighted-average common shares outstanding
- basic and diluted
64,963,045
13,373,712
64,774,428
12,708,522
WEAVE COMMUNICATIONS,
INC
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss
$
(14,815
)
$
(14,419
)
$
(28,653
)
$
(23,402
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization
3,393
2,951
6,768
5,586
Amortization of operating right-of-use
assets
914
—
1,822
—
Provision for losses on accounts
receivable
149
49
299
72
Amortization of contract acquisition
costs
2,693
2,273
5,333
4,388
Stock-based compensation
4,480
5,269
7,905
7,093
Changes in operating assets and
liabilities:
Accounts receivable
(233
)
(387
)
(221
)
(2,507
)
Contract acquisition costs
(2,885
)
(3,472
)
(5,294
)
(6,119
)
Prepaid expenses and other assets
758
37
1,708
259
Accounts payable
444
605
592
408
Accrued liabilities
1,952
1,541
2,021
1,151
Operating lease liabilities
(639
)
—
(971
)
—
Deferred revenue
2,058
2,600
2,789
4,059
Deferred rent
—
1,182
—
1,969
Net cash used in operating activities
(1,731
)
(1,771
)
(5,902
)
(7,043
)
CASH FLOWS FROM INVESTING
ACTIVITIES
—
Purchases of property and equipment
(380
)
(1,656
)
(921
)
(3,438
)
Capitalized internal-use software
costs
(311
)
(567
)
(678
)
(1,106
)
Net cash used in investing activities
(691
)
(2,223
)
(1,599
)
(4,544
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Principal payments on finance leases
(2,284
)
(1,923
)
(4,460
)
(3,740
)
Proceeds from stock option exercises
134
1,877
693
2,125
Paid offering costs
—
—
(400
)
—
Net cash used in financing activities
(2,150
)
(46
)
(4,167
)
(1,615
)
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(4,572
)
(4,040
)
(11,668
)
(13,202
)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
128,900
46,536
135,996
55,698
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
124,328
$
42,496
$
124,328
$
42,496
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for
interest
$
332
$
293
$
625
$
573
Cash paid during the period for income
taxes
19
—
51
—
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Equipment purchases financed with accounts
payable
—
36
20
231
Finance lease liabilities arising from
obtaining finance lease right-of-use assets
1,297
2,940
3,324
5,152
Accrued unpaid offering costs
271
271
—
WEAVE COMMUNICATIONS,
INC
DISAGGREGATED REVENUE AND COST
OF REVENUE
(unaudited, in
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Subscription and payment
processing:
Revenue
$
33,538
$
26,233
$
65,488
$
50,132
Cost of revenue
(9,009
)
(7,113
)
(17,830
)
(13,529
)
Gross profit
$
24,529
$
19,120
$
47,658
$
36,603
Gross margin
73
%
73
%
73
%
73
%
Onboarding:
Revenue
$
319
$
1,034
$
581
$
2,072
Cost of revenue
(2,502
)
(2,673
)
(5,088
)
(4,993
)
Gross profit
$
(2,183
)
$
(1,639
)
$
(4,507
)
$
(2,921
)
Gross margin
(684
) %
(159
) %
(776
) %
(141
) %
Hardware:
Revenue
$
1,073
$
794
$
2,133
$
1,525
Cost of revenue (depreciation of phone
hardware over a 3-year useful life)
(2,238
)
(2,237
)
(4,584
)
(4,303
)
Gross profit
$
(1,165
)
$
(1,443
)
$
(2,451
)
$
(2,778
)
Gross margin
(109
) %
(182
) %
(115
) %
(182
) %
WEAVE COMMUNICATIONS,
INC
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands,
except share and per share data)
The following tables reconcile the
specific items excluded from GAAP in the calculation of non-GAAP
financial measures for the periods indicated below:
Non-GAAP gross profit
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Gross profit
$
21,181
$
16,038
$
40,700
$
30,904
Stock-based compensation add back
176
210
324
279
Non-GAAP gross profit
$
21,357
$
16,248
$
41,024
$
31,183
Non-GAAP operating expenses
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Sales and marketing
$
16,747
$
14,718
$
32,967
$
26,454
Stock-based compensation excluded
(790
)
(679
)
(1,452
)
(811
)
Non-GAAP sales and marketing
$
15,957
$
14,039
$
31,515
$
25,643
Research and development
$
7,428
$
7,871
$
14,632
$
13,707
Stock-based compensation excluded
(1,078
)
(2,020
)
(1,630
)
(2,416
)
Non-GAAP research and development
$
6,350
$
5,851
$
23,505
$
18,526
General and administrative
$
11,597
$
7,583
$
21,201
$
13,586
Stock-based compensation excluded
(2,436
)
(2,360
)
(4,499
)
(3,587
)
Non-GAAP general and administrative
$
9,161
$
5,223
$
16,702
$
9,999
Non-GAAP loss from operations
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Loss from operations
$
(14,591
)
$
(14,134
)
$
(28,100
)
$
(22,843
)
Stock-based compensation add back
4,480
5,269
7,905
7,093
Non-GAAP loss from operations
$
(10,111
)
$
(8,865
)
$
(20,195
)
$
(15,750
)
Non-GAAP net loss
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net loss attributable to common
stockholders
$
(14,815
)
$
(14,976
)
$
(28,653
)
$
(24,508
)
Stock-based compensation add back
4,480
5,269
7,905
7,093
Non-cash cumulative dividends on
redeemable convertible preferred stock
$
—
$
557
$
(64,774
)
$
(12,709
)
Non-GAAP net loss attributable to common
stockholders
$
(10,335
)
$
(9,150
)
$
(85,522
)
$
(30,124
)
GAAP net loss per share attributable to
common stockholders - basic and diluted
$
(0.23
)
$
(1.12
)
$
(0.44
)
$
(1.93
)
Non-GAAP net loss per share attributable
to common stockholders - basic and diluted
$
(0.16
)
$
(0.68
)
$
(1.32
)
$
(2.37
)
Weighted-average common shares outstanding
- basic and diluted
64,963,045
13,373,712
64,774,428
12,708,522
Adjusted EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net loss
$
(14,815
)
$
(14,419
)
$
(28,653
)
$
(23,402
)
Interest on outstanding debt
332
293
625
573
Tax expense
19
—
51
—
Depreciation
685
533
1,358
963
Amortization
280
159
566
274
Stock-based compensation
4,480
5,269
7,905
7,093
Adjusted EBITDA
$
(9,019
)
$
(8,165
)
$
(18,148
)
$
(14,499
)
Free Cash Flow
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net cash used in operating activities
$
(1,731
)
$
(1,771
)
$
(5,902
)
$
(7,043
)
Less: Purchase of property and
equipment
(380
)
(1,656
)
(921
)
(3,438
)
Less: Capitalized internal-use
software
(311
)
(567
)
(678
)
(1,106
)
Free cash flow
$
(2,422
)
$
(3,994
)
$
(7,501
)
$
(11,587
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005308/en/
Investor Relations Contact The Blueshirt Group
ir@getweave.com
Media Contact Kali Geldis Director of Communications
pr@getweave.com
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