Summary
Weave Communications reported $47.2 million of revenue for the quarter ended March 31, 2024, up 19.2% from $39.6 million in the prior-year quarter. Management attributed about $6.6 million of the increase to customers acquired after March 31, 2023 and roughly $1.0 million to expansion within the existing base. Gross margin was 69.9%, up 2.9 percentage points from 67.1%. On a non-GAAP basis, gross margin reached 70.4%, up from 67.6%, and the chief executive described crossing the 70% mark as a significant milestone. Non-GAAP loss from operations was $1.4 million, narrower than the $4.0 million loss a year earlier.
GAAP results are still unprofitable, although the trend improved. Loss from operations was $8.2 million versus $8.5 million, so the operating loss narrowed. Operating margin was negative 17.3%, better than negative 21.5% a year earlier. Net loss was $7.2 million, or $0.10 per diluted share, compared with $7.9 million, or $0.12 per share. Non-GAAP net loss was $0.4 million, or $0.01 per share, against $3.3 million, or $0.05 per share. Adjusted EBITDA was negative $358 thousand, an improvement from negative $3.1 million. Deferred revenue, current portion only, was $39.8 million, up 15.2% from $34.6 million, which points to billings that will be recognized as revenue later.
Cash is the quarter's most visible pressure point. Cash used in operating activities was $19.7 million, against cash provided by operating activities of $1.5 million in the prior-year quarter. Free cash flow, a non-GAAP measure, swung to negative $20.5 million from positive $0.6 million. Two timing items drove the move. A new billing system pushed March subscription billings into April, lifting accounts receivable by roughly $15 million, and annual employee bonuses of about $7 million were paid in the first quarter instead of the second quarter, when the company paid them in prior years. Excluding both items, free cash flow would have been positive. Capital expenditures were $0.5 million, down from $0.6 million. Cash, cash equivalents and short-term investments totaled $82.3 million as of March 31, 2024.
Retention eased slightly. Dollar-based net retention rate was 96% as of March 31, 2024, compared with 97% a year earlier, and dollar-based gross retention rate was 92% against 93%. About 40% of customer locations elected annual prepayments as of March 31, 2024. Product work centered on practice management integrations. Weave launched or deepened connections with athenahealth, DrChrono, NaVetor and IntraVet, started scoping work on ezyVet and Neo, and signed a product integration and commercial partnership agreement with Prompt EMR. Marcus Bertilson moved up to chief operating officer, and David McNeil joined as chief revenue officer. Weave also cited a first-place ranking in the G2 Grid for patient relationship management. Customer location counts are disclosed only with annual results.
Management's outlook covers the next quarter and the full fiscal year. For the second quarter, revenue is expected between $48.2 million and $49.2 million, with a non-GAAP loss from operations between $1.5 million and $2.5 million. For the full year 2024, revenue guidance is $197.0 million to $200.0 million, and non-GAAP loss from operations guidance is $2.0 million to $6.0 million. Those figures exclude stock-based compensation expense, and no reconciliation to GAAP is provided. Risks in the filing include attracting new customers, retaining and expanding existing accounts, unfavorable economic conditions, competition, and higher regulatory fees on texting and phone calls. Indemnification obligations tied to protected health information are another exposure. The SVB credit facility carries financial covenants, including a $20.0 million minimum liquidity requirement that applies if cash and investments held at SVB drop below $100.0 million.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $47.2M | $45.7M | +3.2% | $39.6M | +19.2% |
| Gross profit | $33.0M | $31.6M | +4.5% | $26.5M | +24.3% |
| Gross margin | 69.9% | 69.1% | +0.8 pp | 67.1% | +2.9 pp |
| Research & development | $9.6M | $9.1M | +5.6% | $7.7M | +25.4% |
| Sales & marketing | $19.6M | $18.3M | +7.3% | $17.2M | +14.0% |
| General & administrative | $11.9M | $12.2M | -2.3% | $10.1M | +17.0% |
| Total operating expenses | $41.1M | $39.6M | +4.0% | $35.1M | +17.4% |
| Operating income (loss) | -$8.2M | -$8.0M | -2.0% | -$8.5M | +4.3% |
| Operating margin | -17.3% | -17.5% | +0.2 pp | -21.5% | +4.2 pp |
| Net income (loss) | -$7.2M | -$7.0M | -2.3% | -$7.9M | +8.3% |
| Net margin | -15.3% | -15.4% | +0.1 pp | -19.9% | +4.6 pp |
| Diluted EPS | -$0.10 | -$0.46 | +$0.36 | -$0.12 | +$0.02 |
| Net retention rate | 96.0% | — | — | 97.0% | -1.0 pp |
Risks
Unfavorable economic conditions and macroeconomic uncertainties, including supply chain disruptions, inflation, recession risks, and delayed sales cycles, have impacted and may continue to adversely impact our business, particularly among SMB customers. Global economic and business activities continue to face widespread uncertainties that could result in decreased spending by existing and prospective customers.
Our revenue is derived from SMBs, and the majority from small businesses, which often have higher rates of business failures and limited budgets, are fragmented, and are more susceptible to economic downturns than enterprises. Inflation and interest rate trends have particularly impacted many SMBs, making us more susceptible to economic downturns.
We rely on Stripe as the single supplier for Weave Payments, and any disruption, termination, or increased fees could decrease revenue and harm customer relationships. We have experienced limited interruptions with Stripe in the past that temporarily prevented some customers from collecting payments.
We outsource a substantial majority of our cloud infrastructure to GCP under a 60-month term through 2027 with no renewal right, and we cannot easily switch to another cloud provider. Any disruption of or interference with our use of GCP could materially adversely affect our business, operating results, and financial condition.
Our platform depends on integrations such as Dentrix PMS, which provides critical functionality to a significant portion of our customer base under a contract through July 2026. If this or other integration agreements are terminated or if providers expand competing offerings, our platform's value to customers could decline and our business would be materially adversely affected.
Operating cash flow was negative $19.7 million for the three months ended March 31, 2024, down from positive $1.5 million in the prior-year quarter, a decrease of $21.2 million, primarily due to a new billing system that deferred March 2024 subscription billings into April 2024 and the timing of 2023 annual bonus payouts. Excluding these items, free cash flow would have been positive, but the delay highlights potential liquidity timing risks.
We continue to incorporate AI solutions and features into our platform, but may not realize desired benefits, may negatively impact cost of revenue and gross margins until revenue offsets investments, and face competition for AI talent and evolving legal and regulatory obligations. Competitors may incorporate AI more quickly or successfully, impairing our ability to compete effectively.
Our platform often requires integration and customization that can result in longer onboarding and ramping process times, and onboarding efforts may take up to several months. Delays from phone number porting or integrations with existing or new customer systems could limit our ability to attract and retain customers and adversely affect revenue and profits.
We have experienced significant growth and churn in employees, creating operational challenges, particularly in customer service and sales organizations. Approximately one-third of our customer service and support staff has been employed with us for less than one year and may be less familiar with our platform, potentially affecting support quality and retention.
We have incurred net losses in each year since inception, including a net loss of $7.2 million for the three months ended March 31, 2024, and had an accumulated deficit of $269.9 million as of March 31, 2024. We may not achieve or sustain profitability in the future if revenue does not increase sufficiently to offset expected cost increases.
The market for our platform is highly competitive, with larger competitors that have greater name recognition, longer operating histories, and significantly greater resources. These competitors may bundle competing products at lower prices, leading to pricing pressure and reduced margins for us.
Our products and services must comply with industry standards, FCC regulations, and state, local, country-specific, and international regulations, and changes may require us to modify existing services, potentially increase our costs or the prices we charge customers, and otherwise harm our business.
SaaS KPIs
All quarters →Free cash flow
Free cash flow margin
Non-GAAP gross margin
Dollar-Based Gross Retention Rate (GRR)
Dollar-Based Net Retention Rate (NRR)
Non-GAAP Loss from Operations Margin
Summary, forecast, risks and KPIs are extracted from Weave Communications, Inc.'s SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.