Summary
Weave opened fiscal 2025 with solid top-line momentum. First quarter revenue was $55.8 million, up 18.3% from $47.2 million in the prior-year quarter. Gross profit rose 21.1% to $39.9 million, and gross margin reached 71.6%, up from 69.9%. The operating loss widened to $9.3 million from $8.2 million, however. Net loss widened to $8.8 million from $7.2 million, and diluted EPS was -$0.12 versus -$0.10. Operating margin was -16.7%, a slight improvement from -17.3%. The spread between gross profit growth and operating loss growth shows that operating expenses are still rising faster than revenue.
Cash generation improved sharply. Operating cash flow was -$0.2 million, up from -$19.7 million a year earlier. Capital expenditures were $0.4 million, down from $0.5 million. Deferred revenue was $38.9 million, down 2.5% from $39.8 million. The company also showed progress on adjusted profitability. Non-GAAP income from operations was $39.0 thousand, compared with a non-GAAP loss from operations of $1.4 million. Non-GAAP net income was $0.5 million, or $0.01 per share, compared with a non-GAAP net loss of $0.4 million, or negative $0.01 per share. Adjusted EBITDA was $1.0 million, compared with -$0.4 million. Free cash flow was -$1.1 million, better than -$20.5 million. Those non-GAAP measures exclude stock-based compensation and acquisition transaction costs, so they do not change the GAAP loss picture.
Operational metrics gave a mixed read. Dollar-based net retention rate improved to 98% from 96%, but dollar-based gross retention rate slipped to 91% from 92%. The company said annual prepayments declined to about 33% of customer locations from 40%. A record quarter in specialty medical sales was supported by new integrations with Prompt, Practice Fusion, and Veradigm, which expanded Weave's serviceable market by an estimated 60,000 locations. Management described strong demand in specialty medical, continued progress in mid-market, and solid performance in payments. The bigger strategic move was the pending acquisition of TrueLark for $35.0 million, split between $25.0 million in cash and $10.0 million in equity. TrueLark provides AI-powered front-desk automation, including scheduling and client inquiries through SMS and web chat. Weave expects the deal to advance its AI roadmap and support always-on patient engagement.
Guidance points to steady growth but limited GAAP profitability. For the second quarter, total revenue is expected to be $57.3 million to $58.3 million. Non-GAAP income from operations for the second quarter is expected to range from a loss of $1.0 million to zero. For the full fiscal year, revenue guidance is $236.8 million to $239.8 million. Full-year non-GAAP income from operations is expected to be $0.0 to $3.0 million. The full-year weighted average share count is expected to be 76.5 million. The company notes that the outlook assumes the TrueLark acquisition closes in the second quarter.
Risks remain substantial. The TrueLark deal carries integration risk, the need to retain TrueLark employees, and uncertainty over whether the expected benefits materialize. The gross retention rate decline shows some customer churn pressure. Revenue growth still depends heavily on newly acquired customer locations, and the company continues to generate GAAP operating losses. Management also cited unfavorable economic conditions, macroeconomic uncertainty, competition, customer acquisition costs, and the challenge of managing growth. The $25.0 million cash payment for TrueLark will use cash on hand and reduce liquidity. Weave ended the quarter with deferred revenue down year over year, which adds another item to watch as the company works toward its full-year targets.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $55.8M | $54.2M | +3.0% | $47.2M | +18.3% |
| Gross profit | $39.9M | $39.0M | +2.3% | $33.0M | +21.1% |
| Gross margin | 71.6% | 72.1% | -0.5 pp | 69.9% | +1.6 pp |
| Research & development | $11.2M | $10.8M | +3.7% | $9.6M | +15.6% |
| Sales & marketing | $23.5M | $21.9M | +7.3% | $19.6M | +19.8% |
| General & administrative | $14.6M | $13.7M | +6.3% | $11.9M | +22.9% |
| Total operating expenses | $49.3M | $46.4M | +6.1% | $41.1M | +19.7% |
| Operating income (loss) | -$9.3M | -$7.4M | -26.4% | -$8.2M | -14.3% |
| Operating margin | -16.7% | -13.6% | -3.1 pp | -17.3% | +0.6 pp |
| Net income (loss) | -$8.8M | -$6.7M | -31.5% | -$7.2M | -22.5% |
| Net margin | -15.8% | -12.4% | -3.4 pp | -15.3% | -0.5 pp |
| Diluted EPS | -$0.12 | -$0.09 | -$0.03 | -$0.10 | -$0.02 |
| Net retention rate | 98.0% | — | — | 96.0% | +2.0 pp |
Risks
Revenue is concentrated in SMB healthcare practices, and the majority comes from small businesses that have higher failure rates, limited budgets, and greater susceptibility to economic downturns than larger enterprises.
Customers have no contractual obligation to renew, many pay monthly, and retention depends on adding products like Weave Payments and Call Intelligence; dollar-based gross retention rate was 91% as of March 31, 2025 compared with 92% as of March 31, 2024.
The platform relies on single-source suppliers including GCP through 2027 with no renewal right, Stripe for Weave Payments, and Yealink, Bandwidth and Telnyx; any disruption, termination, or fee increase could decrease revenue and harm results.
Unfavorable economic conditions and macroeconomic uncertainties could reduce spending by SMB healthcare customers, delay sales or renewals, and increase churn, especially because a majority of customers are on monthly subscriptions and can terminate on short notice.
Expansion into medium-sized and multi-location healthcare organizations may bring higher costs and longer sales and installation cycles, require more technical and management approvals, and make the timing of completed sales less predictable.
Weave is incorporating more AI features, but may not realize the desired benefits, may incur higher cost of revenue and gross margin pressure, and competes for AI talent and against rivals that could implement AI more quickly or successfully.
The business must comply with HIPAA, FCC rules, and state, local, and international regulations, and evolving AI regulations may require policy changes and significant time and expense.
The pending $35.0 million TrueLark acquisition, including $25.0 million in cash and $10.0 million in shares, may divert management attention, require integration spending, dilute stockholders, and reduce cash and short-term investments.
SaaS KPIs
All quarters →Free cash flow
Adjusted EBITDA
Non-GAAP gross margin
Net Revenue Retention
Dollar-Based Gross Retention Rate
Non-GAAP income from operations margin
Summary, forecast, risks and KPIs are extracted from Weave Communications, Inc.'s SEC filings for Q1 FY2025 (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.