- Third quarter total revenue of $36.2 million, up 20%
year-over-year
- Subscription and Payments revenue growth of 23%
year-over-year
- Significant gross and operating margin improvement
year-over-year following strategic and operational actions
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 third quarter ended September 30, 2022.
“In the third quarter we continued to improve the efficiency of
our business and our go to market and technology innovation
execution resulting in favorable revenue and operating margins,”
said CEO Brett White. “We will continue to have a laser focus on
delivering an experience that our customers love, building a
scalable foundation for profitable growth, and fostering an engaged
team that lives our corporate values.”
Third Quarter 2022 Financial Highlights
- Total revenue was $36.2 million, representing a 20%
year-over-year increase compared to $30.3 million in the third
quarter of 2021.
- GAAP loss from operations was $11.9 million, compared to a GAAP
loss from operations of $13.9 million in the third quarter of
2021.
- Non-GAAP loss from operations was $6.5 million, compared to a
non-GAAP loss from operations of $9.9 million in the third quarter
of 2021.
- GAAP net loss attributable to common stockholders was $11.8
million, or $0.18 per share compared to a GAAP net loss
attributable to common stockholders of $14.8 million, or $1.03 per
share in the third quarter of 2021.
- Non-GAAP net loss attributable to common stockholders was $6.5
million, or $0.10 per share compared to a non-GAAP net loss
attributable to common stockholders of $10.3 million, or $0.72 per
share in the third quarter of 2021.
- Dollar-Based Net Retention Rate (NRR) was 101% as of September
30, 2022.
- Dollar-Based Gross Retention Rate (GRR) was 94% as of September
30, 2022.
Business Highlights
- Weave added new features to online scheduling tool
- Weave announced Brett White as Chief Executive Officer
- Weave named a Great Place to Work for the fourth year in a
row
- Weave named as a leader in five of G2’s Fall 2022 reports
- Weave hosted first ever Virtual Conference for 130,000+ of its
users
- Weave appointed Brooke Shreeve as Chief People Officer
- Weave named Best SMB CRM in 5th Annual MarTech Breakthrough
Awards
- Weave launched new phone reporting analytics feature for
multi-location practices
Financial Fourth Quarter and Full Year 2022 Outlook
The company expects the following financial results for the
three months and full year ending December 31, 2022:
Fourth Quarter
Full Year
(in millions)
Total revenue
$36.0 - $37.0
$140.5 - $141.5
Non-GAAP loss from operations
$(7.5) - $(6.5)
$(34.0) - $(33.0)
Weighted average share count
65.6
65.1
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 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 and webcast for analysts
and investors on Wednesday, November 2, 2022, beginning at 5 p.m.
EDT.
Individuals interested in listening to the conference call may
do so by dialing (786) 697-3501 or (866) 580-3963 for toll free.
The live webcast and a webcast replay of the conference call can be
accessed from the investor relations page of Weave’s website at
investors.getweave.com.
About Weave
Weave is the all-in-one customer communication and engagement
platform for small and medium-sized businesses. 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. Weave has set the bar
for Utah startup achievement & work culture. In the past year,
Weave has been named a member of the Forbes Cloud 100, a Certified
Great Place to Work, and a G2 leader in Patient Engagement,
Optometry, Dental Practice Management and Patient Relationship
Management software. 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 fourth 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 plans for the company’s
business.
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 June 30, 2022, filed
with the SEC on August 12, 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 income 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 and per share data)
September 30, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
118,358
$
135,996
Accounts receivable
3,653
3,059
Deferred contract acquisition costs,
net
9,391
8,931
Prepaid expenses and other current
assets
4,886
6,461
Total current assets
136,288
154,447
Non-current assets:
Property and equipment, net
10,929
24,502
Operating lease right-of-use assets
45,740
—
Finance lease right-of-use assets
10,612
—
Deferred contract acquisition costs, net,
less current portion
7,810
7,873
Other non-current assets
1,161
663
TOTAL ASSETS
$
212,540
$
187,485
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
3,398
$
4,061
Accrued liabilities
15,773
12,250
Deferred revenue
32,722
29,511
Current portion of operating lease
liabilities
5,149
—
Current portion of finance lease
liabilities
7,718
8,485
Current portion of long-term debt
10,000
—
Total current liabilities
74,760
54,307
Non-current liabilities:
Deferred rent
—
4,319
Operating lease liabilities, less current
portion
45,964
—
Finance lease liabilities, less current
portion
5,290
6,558
Long-term debt
—
10,000
Total liabilities
126,014
75,184
Stockholders' equity:
Preferred stock, $0.00001 par value per
share; 10,000,000 shares authorized, zero shares issued and
outstanding as of September 30, 2022 and December 31, 2021
—
—
Common stock, $0.00001 par value per
share; 500,000,000 shares authorized as of September 30, 2022 and
December 31, 2021; 65,453,292 and 64,324,628 shares issued and
outstanding as of September 30, 2022 and December 31, 2021,
respectively
—
—
Additional paid-in capital
309,023
294,230
Accumulated deficit
(222,369
)
(181,898
)
Accumulated other comprehensive (loss)
income
(128
)
(31
)
Total stockholders' equity
86,526
112,301
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
212,540
$
187,485
WEAVE COMMUNICATIONS,
INC
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited, in thousands,
except share and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Revenue
$
36,230
$
30,302
$
104,432
$
84,031
Cost of revenue
13,023
12,868
40,525
35,693
Gross profit
23,207
17,434
63,907
48,338
Operating expenses:
Sales and marketing
16,292
16,021
49,259
42,475
Research and development
7,897
6,183
22,529
19,890
General and administrative
10,876
9,131
32,077
22,717
Total operating expenses
35,065
31,335
103,865
85,082
Loss from operations
(11,858
)
(13,901
)
(39,958
)
(36,744
)
Other income (expense):
Interest expense
(380
)
(303
)
(1,005
)
(876
)
Other income (expense)
451
(4
)
574
10
Loss before income taxes
(11,787
)
(14,208
)
(40,389
)
(37,610
)
Provision for income taxes
(31
)
(12
)
(82
)
(12
)
Net loss
$
(11,818
)
$
(14,220
)
$
(40,471
)
$
(37,622
)
Less: cumulative dividends on redeemable
convertible preferred stock
—
(585
)
—
(1,691
)
Net loss attributable to common
stockholders
$
(11,818
)
$
(14,805
)
$
(40,471
)
$
(39,313
)
Net loss per share attributable to common
stockholders - basic and diluted
$
(0.18
)
$
(1.03
)
$
(0.62
)
$
(2.97
)
Weighted-average common shares outstanding
- basic and diluted
65,143,929
14,317,575
64,898,948
13,250,767
WEAVE COMMUNICATIONS,
INC
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss
$
(11,818
)
$
(14,220
)
$
(40,471
)
$
(37,622
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization
3,151
3,165
9,844
8,751
Amortization of operating right-of-use
assets
920
—
2,742
—
Provision for losses on accounts
receivable
159
155
458
227
Amortization of contract acquisition and
fulfillment costs
2,828
2,458
8,236
6,846
Loss on disposal of assets
10
—
10
—
Stock-based compensation
5,322
3,954
13,227
11,047
Changes in operating assets and
liabilities:
Accounts receivable
(831
)
244
(1,052
)
(2,263
)
Contract acquisition costs
(3,196
)
(3,922
)
(8,490
)
(10,041
)
Prepaid expenses and other assets
(774
)
(1,725
)
934
(1,466
)
Accounts payable
(1,304
)
(743
)
(712
)
(335
)
Accrued liabilities
1,902
4,681
3,923
5,832
Operating lease liabilities
(717
)
—
(1,688
)
—
Deferred revenue
325
1,508
3,114
5,567
Deferred rent
—
1,171
—
3,140
Net cash used in operating
activities
(4,023
)
(3,274
)
(9,925
)
(10,317
)
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from sale of assets
9
—
9
—
Purchases of property and equipment
(270
)
(2,292
)
(1,191
)
(5,730
)
Capitalized internal-use software
costs
(325
)
(823
)
(1,003
)
(1,929
)
Net cash used in investing activities
(586
)
(3,115
)
(2,185
)
(7,659
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from advance on line of
credit
—
5,995
—
5,995
Principal payments on finance leases
(2,234
)
(2,081
)
(6,694
)
(5,821
)
Proceeds from stock option exercises
316
1,115
1,009
3,240
Proceeds from the employee stock purchase
plan
828
—
828
—
Paid offering costs
(271
)
(745
)
(671
)
(745
)
Net cash provided by (used in) financing
activities
(1,361
)
4,284
(5,528
)
2,669
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(5,970
)
(2,105
)
(17,638
)
(15,307
)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
124,328
42,496
135,996
55,698
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
118,358
$
40,391
$
118,358
$
40,391
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for
interest
$
380
$
303
$
1,005
$
876
Cash paid during the period for income
taxes
31
—
82
—
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Equipment purchases financed with accounts
payable
29
103
49
334
Finance lease liabilities arising from
obtaining finance lease right-of-use assets
1,335
2,281
4,659
7,433
Accrued unpaid offering costs
—
1,075
—
1,075
WEAVE COMMUNICATIONS,
INC
DISAGGREGATED REVENUE AND COST
OF REVENUE (GAAP)
(unaudited, in
thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Subscription and payment
processing:
Revenue
$
34,943
$
28,377
$
100,431
$
78,509
Cost of revenue
(8,544
)
(7,523
)
(26,374
)
(21,052
)
Gross profit
$
26,399
$
20,854
$
74,057
$
57,457
Gross margin
76
%
73
%
74
%
73
%
Onboarding:
Revenue
$
278
$
1,016
$
859
$
3,088
Cost of revenue
(2,431
)
(3,055
)
(7,519
)
(8,048
)
Gross profit
$
(2,153
)
$
(2,039
)
$
(6,660
)
$
(4,960
)
Gross margin
(774
) %
(201
) %
(775
) %
(161
) %
Hardware:
Revenue
$
1,009
$
909
$
3,142
$
2,434
Cost of revenue
(2,048
)
(2,290
)
(6,632
)
(6,593
)
Gross profit
$
(1,039
)
$
(1,381
)
$
(3,490
)
$
(4,159
)
Gross margin
(103
) %
(152
) %
(111
) %
(171
) %
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 September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Gross profit
$
23,207
$
17,434
$
63,907
$
48,338
Stock-based compensation add back
190
139
514
418
Non-GAAP gross profit
$
23,397
$
17,573
$
64,421
$
48,756
Non-GAAP gross margin
65
%
58
%
62
%
58
%
Non-GAAP operating expenses
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Sales and marketing
$
16,292
$
16,021
$
49,259
$
42,475
Stock-based compensation excluded
(844
)
(693
)
(2,296
)
(1,504
)
Non-GAAP sales and marketing
$
15,448
$
15,328
$
46,963
$
40,971
Research and development
$
7,897
$
6,183
$
22,529
$
19,890
Stock-based compensation excluded
(1,292
)
(575
)
(2,922
)
(2,991
)
Non-GAAP research and development
$
6,605
$
5,608
$
19,607
$
16,899
General and administrative
$
10,876
$
9,131
$
32,077
$
22,717
Stock-based compensation excluded
(2,996
)
(2,547
)
(7,495
)
(6,134
)
Non-GAAP general and administrative
$
7,880
$
6,584
$
24,582
$
16,583
Non-GAAP loss from operations
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Loss from operations
$
(11,858
)
$
(13,901
)
$
(39,958
)
$
(36,744
)
Stock-based compensation add back
5,322
3,954
13,227
11,047
Non-GAAP loss from operations
$
(6,536
)
$
(9,947
)
$
(26,731
)
$
(25,697
)
Non-GAAP loss from operations margin
(18
) %
(33
) %
(26
) %
(31
) %
Non-GAAP net loss
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net loss attributable to common
stockholders
$
(11,818
)
$
(14,805
)
$
(40,471
)
$
(39,313
)
Stock-based compensation add back
5,322
3,954
13,227
11,047
Non-cash cumulative dividends on
redeemable convertible preferred stock
—
585
—
1,691
Non-GAAP net loss attributable to common
stockholders
$
(6,496
)
$
(10,266
)
$
(27,244
)
$
(26,575
)
Non-GAAP net loss margin
(18
) %
(34
) %
(26
) %
(32
) %
GAAP net loss per share attributable to
common stockholders - basic and diluted
$
(0.18
)
$
(1.03
)
$
(0.62
)
$
(2.97
)
Non-GAAP net loss per share attributable
to common stockholders - basic and diluted
$
(0.10
)
$
(0.72
)
$
(0.42
)
$
(2.01
)
Weighted-average common shares outstanding
- basic and diluted
65,143,929
14,317,575
64,898,948
13,250,767
Adjusted EBITDA
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net loss
$
(11,818
)
$
(14,220
)
$
(40,471
)
$
(37,622
)
Interest on outstanding debt
380
303
1,005
876
Provision for income taxes
31
12
82
12
Depreciation
645
620
2,003
1,583
Amortization
285
239
852
513
Stock-based compensation
5,322
3,954
13,227
11,047
Adjusted EBITDA
$
(5,155
)
$
(9,092
)
$
(23,302
)
$
(23,591
)
Free Cash Flow
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net cash used in operating activities
$
(4,023
)
$
(3,274
)
$
(9,925
)
$
(10,317
)
Less: Purchases of property and
equipment
(270
)
(2,292
)
(1,191
)
(5,730
)
Less: Capitalized internal-use software
costs
(325
)
(823
)
(1,003
)
(1,929
)
Free cash flow
$
(4,618
)
$
(6,389
)
$
(12,119
)
$
(17,976
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102005325/en/
Investor Relations Contact The Blueshirt Group
ir@getweave.com
Media Contact Kali Geldis Director of
Communications pr@getweave.com
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