Summary
Weave Communications reported $67.5 million in revenue for the second quarter of fiscal 2026, ended June 30, 2026, up 15.5% from $58.5 million in the prior-year quarter. Gross profit rose 16.0% to $48.7 million from $42.0 million, and GAAP gross margin was 72.0%, up 30 basis points from 71.7%. Non-GAAP gross margin was 72.6%, up 30 basis points from 72.3%. The company still posted a GAAP loss from operations of $4.4 million, narrowed from $10.2 million, and a net loss of $4.3 million, or $0.05 per diluted share, compared with $8.7 million, or $0.11 per diluted share, in the prior-year quarter. GAAP operating margin was -6.5%, up 10.9 percentage points from -17.4%. Non-GAAP income from operations was $3.2 million, up $3.1 million from $0.1 million.
Cash flow from operating activities was $10.2 million for the quarter, up 88.1% from $5.4 million, and free cash flow was $8.7 million, up $4.2 million from $4.5 million. Capital expenditures were $0.6 million, up 16.4% from $0.5 million. For the six months ended June 30, 2026, revenue of $133.0 million was up 16.4% from $114.3 million, and gross profit of $96.2 million was up 17.5% from $81.9 million. The year-to-date GAAP loss from operations narrowed to $10.4 million from $19.5 million, and the year-to-date net loss was $10.0 million, or $0.13 per diluted share, compared with $17.5 million, or $0.23 per diluted share. Operating cash flow for the six months was $4.5 million, down 13.2% from $5.2 million, while capital expenditures were $1.2 million, up 16.8% from $1.0 million. Deferred revenue, current portion only, was $37.3 million at June 30, 2026, down 5.2% from $39.3 million a year earlier.
Retention softened. The dollar-based net revenue retention rate was 92% as of June 30, 2026, down from 96% a year earlier, and the dollar-based gross revenue retention rate was 89%, down from 90%. Management said Weave added the most new locations ever in a quarter, and the platform serves nearly 40,000 customer locations. Product news centered on an omnichannel AI Receptionist built on Google Cloud's Gemini Enterprise Agent Platform, which preserves conversation context across voice and text, configures intelligent call routing, answers routine questions around the clock, and escalates to staff when needed. Weave deepened its athenaOne integration and joined athenahealth's Marketplace program, which reaches more than 160,000 providers, and announced an authorized integration with Elation Health. Enterprise additions include single sign-on desktop authentication, enhanced AI Receptionist controls, and automated digital insurance eligibility and collection. The company also ranked first in G2's Summer 2026 Grid Report for Patient Relationship Management.
Guidance covers the third quarter ending September 30, 2026 and the full fiscal year ending December 31, 2026. The third quarter non-GAAP income from operations outlook is $3.0 million to $4.0 million, and the full year outlook is $12.0 million to $14.0 million, with weighted average share counts of 80.2 million and 79.8 million. That non-GAAP measure excludes stock-based compensation expense, acquisition transaction costs, amortization of acquisition-related intangible assets, and costs related to shareholder matters. Named risks include attracting new customers, retaining existing customers, increasing customer use of the platform, managing growth, reaching profitability, unfavorable economic conditions, competition, customer acquisition costs, sales and marketing strategy execution, platform enhancement, timely introduction of the voice-enabled AI Receptionist across all vertical markets, service interruptions, and integration of the TrueLark acquisition. Weave carried no outstanding balance on its $50.0 million revolving line of credit at June 30, 2026 and said it was in compliance with all SVB loan covenants.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $67.5M | $65.5M | +3.1% | $58.5M | +15.5% |
| Gross profit | $48.7M | $47.5M | +2.3% | $42.0M | +16.0% |
| Gross margin | 72.0% | 72.6% | -0.5 pp | 71.8% | +0.3 pp |
| Research & development | $12.1M | $10.8M | +11.5% | $12.0M | +0.6% |
| Sales & marketing | $27.4M | $28.8M | -4.7% | $25.2M | +8.5% |
| General & administrative | $13.6M | $14.0M | -2.9% | $14.9M | -8.8% |
| Total operating expenses | $53.0M | $53.6M | -1.0% | $52.1M | +1.7% |
| Operating income (loss) | -$4.4M | -$6.0M | +27.2% | -$10.2M | +56.9% |
| Operating margin | -6.5% | -9.2% | +2.7 pp | -17.4% | +10.9 pp |
| Net income (loss) | -$4.3M | -$5.8M | +26.2% | -$8.7M | +51.1% |
| Net margin | -6.3% | -8.8% | +2.5 pp | -14.9% | +8.6 pp |
| Diluted EPS | -$0.05 | -$0.07 | +$0.02 | -$0.11 | +$0.06 |
Risks
Revenue is derived from SMB healthcare practices, and the majority of revenue comes from small businesses that face higher business failure rates, limited budgets, and greater susceptibility to economic downturns. This customer profile increases churn and collection risk and limits cost-effective scale.
Dollar-based net revenue retention rate was 92% at June 30, 2026 compared with 96% at June 30, 2025, and gross revenue retention rate was 89% compared with 90%. A majority of customers pay monthly and have no contractual obligation to renew, which increases the risk of revenue decline.
Unfavorable economic conditions and macroeconomic uncertainties could reduce SMB spending, delay sales and implementation cycles, and increase customer terminations. The vast majority of the customer base is SMB, and monthly subscriptions can be terminated on short notice.
The market is highly fragmented and competitive, and PMS or EHR systems of record with significant market penetration could build or partner to offer functionality similar to Weave's platform. Larger competitors may bundle competing products at lower prices, pressuring pricing and margins.
Weave relies on Stripe as the primary payments technology provider for Weave Payments and on GCP to host its platform under a 60-month term through 2027 with no renewal right. Disruption or termination of these single-source relationships could interrupt payments or platform availability.
The platform processes protected health information and is subject to HIPAA and breach notification obligations. A breach of Weave, GCP, or service provider systems could cause data loss, regulatory penalties, litigation, and customer loss.
Weave continues to incorporate AI features such as AI Receptionist, but there is no assurance these efforts will produce the desired benefits and they may result in increased liability, reputational harm, or other adverse consequences. Conflicting and evolving AI regulations could also increase compliance costs.
Products must comply with HIPAA, FCC, state, local, and international regulations, and indemnification agreements cover liabilities if the platform contributes to a protected health information data compromise. Evolving AI regulations may further increase compliance costs or constraints.
Growth has created operational challenges, including significant employee growth and churn and a significant percentage of customer service and support staff employed less than one year. International expansion to India, Latin America, and the Philippines adds management and compliance demands.
Actions of stockholders could disrupt operations and divert management attention. The company has a cooperation agreement with Engine Capital and 2717 Partners and incurred $0.8 million in shareholder matter costs for the six months ended June 30, 2026.
SaaS KPIs
All quarters →Free cash flow
Free cash flow margin
Adjusted EBITDA
Non-GAAP gross margin
Non-GAAP income from operations margin
Summary, forecast, risks and KPIs are extracted from Weave Communications, Inc.'s SEC filings for Q2 FY2026 (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.