Summary
Weave Communications reported second quarter revenue of $58.5 million, up 15.6% from the prior-year quarter. Revenue for the six months ended June 30, 2025 reached $114.3 million, up 16.9%. Management attributed most of the quarterly increase to new customer locations added over the trailing year, with existing accounts contributing a smaller share. Gross profit of $42.0 million rose 16.1%. The top line keeps expanding at a mid-teens pace, and recurring subscription and payment processing revenue stayed near its prior-year share of the mix.
Gross margin was 71.7%, up 0.3 percentage points, helped by more customers running fully depreciated phone hardware and by faster growth in payments revenue, which carries a higher margin than the rest of the platform. Profitability is still the weak spot. Operating loss widened to $10.2 million, and net loss widened to $8.7 million. Diluted loss per share was $0.11, narrower than the prior-year quarter. On a non-GAAP basis, income from operations was $0.1 million, a swing from a non-GAAP operating loss a year earlier, and adjusted EBITDA was $1.1 million.
Cash generation slipped in the quarter. Operating cash flow was $5.4 million, down 76.0% from the prior-year quarter, while year to date operating cash flow was $5.2 million, up 75.7%. Free cash flow, a non-GAAP measure, was $3.4 million for the first half. Retention softened: gross revenue retention was 90% versus 92% a year earlier, and net revenue retention was 96% versus 97%. Deferred revenue of $39.3 million fell 3.0% year over year, and the share of customer locations electing annual prepayments dropped to roughly 31% from 40%.
The TrueLark acquisition closed in May for total consideration of $35.0 million, including a $25.0 million cash payment. TrueLark adds AI-driven workflow automation, round-the-clock scheduling and client communications, and integration plus joint go-to-market work are already underway. Cash and cash equivalents were $44.7 million at June 30, 2025, and the accumulated deficit reached $308.5 million. In July 2025, Weave amended its $50.0 million Silicon Valley Bank revolving credit facility, pushing maturity to August 2027, with no balance outstanding.
Guidance keeps the growth story intact. For the third quarter, revenue is guided to $60.1 million to $61.1 million, with non-GAAP income from operations of $0.0 to $1.0 million. For the full year 2025, revenue is guided to $236.8 million to $239.8 million, with non-GAAP income from operations of $1.2 million to $3.2 million. Weighted average share count is projected at 77.4 million for the third quarter and 76.5 million for the full year. The non-GAAP operating income guidance excludes stock-based compensation, acquisition transaction costs and amortization of acquired intangibles.
Risks center on execution and the customer base. Integrating TrueLark and retaining its employees is a live task, and the company faces competition, macroeconomic pressure on small healthcare practices and potential service interruptions. Operating expenses rose across sales and marketing, research and development and general administrative lines, which is why the operating loss widened even as revenue grew. Specialty Medical became the second-largest vertical by customer count and remains the fastest growing, and new integrations with Ortho2 Edge and IDEXX Neo widen reach. Still, softer retention and the deferred revenue decline are worth tracking.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $58.5M | $55.8M | +4.8% | $50.6M | +15.6% |
| Gross profit | $42.0M | $39.9M | +5.0% | $36.1M | +16.1% |
| Gross margin | 71.8% | 71.6% | +0.2 pp | 71.4% | +0.3 pp |
| Research & development | $12.0M | $11.2M | +7.5% | $10.0M | +20.4% |
| Sales & marketing | $25.2M | $23.5M | +7.3% | $21.9M | +15.3% |
| General & administrative | $14.9M | $14.6M | +2.2% | $13.5M | +10.1% |
| Total operating expenses | $52.1M | $49.3M | +5.8% | $45.4M | +14.9% |
| Operating income (loss) | -$10.2M | -$9.3M | -9.3% | -$9.3M | -10.1% |
| Operating margin | -17.4% | -16.7% | -0.7 pp | -18.3% | +0.9 pp |
| Net income (loss) | -$8.7M | -$8.8M | +1.3% | -$8.6M | -1.8% |
| Net margin | -14.9% | -15.8% | +0.9 pp | -16.9% | +2.0 pp |
| Diluted EPS | -$0.11 | -$0.12 | +$0.01 | -$0.12 | +$0.01 |
Risks
Weave has a history of losses, with a net loss of $17.5 million for the six months ended June 30, 2025 and an accumulated deficit of $308.5 million as of June 30, 2025. Operating loss widened to $19.5 million year to date and net loss widened to $17.5 million year to date, so the company may not achieve or sustain profitability.
Revenue is derived primarily from small and medium-sized healthcare practices, and the majority from small businesses, which have higher failure rates, limited budgets and greater susceptibility to economic downturns. This concentration may make Weave more vulnerable to customer churn and demand reductions.
Unfavorable economic conditions and macroeconomic uncertainty could cause SMB healthcare customers to reduce spending or delay subscriptions, renewals and implementations. The filing notes inflation and interest rate trends have particularly impacted many SMBs and could lengthen sales cycles.
Most customers pay monthly and have no contractual obligation to renew, and retention metrics weakened: dollar-based net retention rate was 96% at June 30, 2025 compared with 97% at June 30, 2024, while dollar-based gross retention rate was 90% compared with 92%. Lower retention would pressure future revenue and gross margin.
The market is highly competitive and fragmented, with larger competitors that can bundle products, offer lower prices and respond faster. Systems of record such as PMS providers could also add competing functionality or partner with competitors, reducing demand for Weave.
Weave depends on integrations with systems of record, including PMS and EHR providers, to maintain platform value and enter new healthcare verticals. If those partners change pricing, terminate agreements or prioritize competing offerings, Weave's products could become less attractive or integration delays could impair growth.
Weave Payments relies primarily on Stripe, and disruptions, fee increases or termination of Stripe agreements could prevent payment processing and decrease revenue. The filing notes Weave has experienced limited payment processing interruptions with Stripe in the past.
Weave outsources a substantial majority of cloud infrastructure to Google Cloud Platform under an agreement through 2027 with no renewal right, and cannot easily switch providers. Any disruption or service-level change at GCP could impair platform availability and customer trust.
As a healthcare software provider, Weave must protect sensitive patient and customer data and comply with regulations such as HIPAA. A breach or unauthorized access, including at GCP or service providers, could lead to litigation, fines, reputational harm and loss of customers.
Weave is pursuing medium-sized and multi-location healthcare organizations, which may require more approvals, longer sales and installation cycles, higher costs and less predictable timing. Failure to manage this expansion could harm customer growth and results.
Weave is adding AI capabilities to its platform and acquired TrueLark, an AI-powered workflow automation platform. The filing warns that use of AI technologies may not produce desired benefits and may increase liability, regulatory exposure or reputational harm.
Weave has experienced significant employee growth and churn, creating operational challenges, and approximately one fifth of customer service and support staff has been employed for less than one year. Difficulty hiring, training and retaining personnel could impair customer support and growth execution.
In May 2025 Weave acquired TrueLark for total consideration of $35.0 million, including a $25.0 million cash payment. Integrating the AI-powered business may divert management attention, increase costs and fail to deliver expected benefits or customer expansion.
Operating cash flow decreased 76.0% to $5.4 million in the current quarter compared with the prior-year quarter, and deferred revenue declined 3.0% compared with the prior-year quarter. The filing also notes annual prepay customer locations fell to approximately 31% from 40%, which could pressure cash flow and billings.
Weave must comply with FCC regulations, state and local rules, international regulations, industry standards and healthcare privacy requirements. Changes may require modifying services, increase costs or expose Weave to penalties and enforcement.
SaaS KPIs
All quarters →Free cash flow
Free cash flow margin
Adjusted EBITDA
Non-GAAP gross margin
Net Revenue Retention
Non-GAAP Operating Margin
Gross Revenue Retention
Summary, forecast, risks and KPIs are extracted from Weave Communications, Inc.'s SEC filings for Q2 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.