Summary
Weave reported third quarter fiscal 2025 revenue of $61.3 million, up 17.1% year over year. Gross profit was $44.3 million, up 17.5%, and gross margin was 72.3%, up 0.3 percentage points. The top line and gross margin expanded, but the GAAP bottom line moved the other way. Operating loss was $8.9 million, and the loss widened. Net loss was $8.7 million, or $0.11 per share, compared with $5.9 million, or $0.08 per share, in the prior-year quarter. Operating margin was -14.6%, down 1.9 percentage points. Cash generation held up. Operating cash flow was $6.1 million, up from $4.5 million. Non-GAAP income from operations was $1.7 million, non-GAAP net income was $2.0 million, or $0.03 per share, Adjusted EBITDA was $2.7 million, and free cash flow was $5.0 million. Non-GAAP gross margin was 73.0%, up 50 basis points. The spread between GAAP and non-GAAP results stays wide because of stock-based compensation, acquisition transaction costs, and amortization of acquisition-related intangible assets.
Management called out product and customer wins. Weave launched new payments features, including surcharging and bulk payments. It earned the top rating in the G2 Fall Report for Patient Relationship Management. The company was also certified as a Great Place to Work in the U.S. and India, the seventh consecutive year in the U.S. and the second in India. The TrueLark acquisition, completed in May 2025, remains part of the story. Retention metrics softened. Net revenue retention was 94%, compared with 98% a year earlier. Gross revenue retention was 90%, compared with 92%. Deferred revenue, current portion, was $38.5 million at September 30, 2025, down 4.3% from a year earlier. Those trends point to some pressure on expansion and prepayment activity even as total revenue grew.
Guidance points to continued growth. Management guided fourth quarter non-GAAP income from operations to $1.5 million to $2.5 million and full fiscal year 2025 non-GAAP income from operations to $3.3 million to $4.3 million. The release also included revenue guidance for the fourth quarter and for the full year ending December 31, 2025. The non-GAAP operating income guidance excludes stock-based compensation expense, acquisition transaction costs, and amortization of acquisition-related intangible assets. A reconciliation to GAAP operating income guidance is not available on a forward-looking basis because the company does not provide guidance on GAAP income or loss from operations.
The quarter carried a clear split between cash generation and GAAP losses. Revenue growth of 17.1% and a 72.3% gross margin are solid, but operating and net losses widened. Operating margin fell to -14.6%. Year-to-date revenue was $175.6 million, up 17.0%, and year-to-date operating cash flow was $11.3 million, up 51.1%. Year-to-date net loss was $26.2 million, and the loss widened. Year-to-date gross margin was 71.9%, up 0.7 percentage points. Capital expenditures in the current quarter were $0.3 million, down 49.1% from the prior-year quarter. The cash flow profile remains a positive, but the GAAP loss profile is still a constraint.
Risks are familiar for a vertical SaaS company moving upmarket. The company must integrate TrueLark and realize expected benefits. It must attract new customers, retain existing ones, and increase customer use of the platform. It must manage growth and achieve profitability in future periods. Competition, macroeconomic uncertainty, service interruptions, and the need to enhance the platform and products all remain. The company also flagged risks described in its filings, including the Risk Factors section of its quarterly report for the quarter ended June 30, 2025. Retention is the near-term item to watch. Net revenue retention of 94% and gross revenue retention of 90% are below the prior-year levels of 98% and 92%. Deferred revenue also declined 4.3% year over year. If those trends persist, they could pressure future growth even as the company invests behind new payments features and multi-location opportunities.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $61.3M | $58.5M | +4.9% | $52.4M | +17.1% |
| Gross profit | $44.3M | $42.0M | +5.7% | $37.7M | +17.5% |
| Gross margin | 72.3% | 71.8% | +0.5 pp | 72.0% | +0.3 pp |
| Research & development | $13.1M | $12.0M | +9.5% | $9.9M | +33.0% |
| Sales & marketing | $26.4M | $25.2M | +4.6% | $21.2M | +24.8% |
| General & administrative | $13.8M | $14.9M | -7.7% | $13.3M | +3.2% |
| Total operating expenses | $53.3M | $52.1M | +2.2% | $44.4M | +20.1% |
| Operating income (loss) | -$8.9M | -$10.2M | +12.2% | -$6.6M | -34.9% |
| Operating margin | -14.6% | -17.4% | +2.8 pp | -12.7% | -1.9 pp |
| Net income (loss) | -$8.7M | -$8.7M | +0.5% | -$5.9M | -47.4% |
| Net margin | -14.1% | -14.9% | +0.8 pp | -11.2% | -2.9 pp |
| Diluted EPS | -$0.11 | -$0.11 | ±$0.00 | -$0.08 | -$0.03 |
Risks
Dollar-based net revenue retention rate declined to 94% at September 30, 2025 from 98% a year earlier, and dollar-based gross revenue retention declined to 90% from 92%. Deferred revenue, current portion, was down 4.3% versus the prior-year quarter, and the risk factor notes most customers pay monthly and can terminate on short notice.
Revenue is derived primarily from SMB healthcare practices, and the risk factor states SMBs have higher rates of business failure, limited budgets, and greater susceptibility to inflation and interest rate trends. This may limit growth and make results more vulnerable to economic downturns.
Net loss widened to $26.2 million for the nine months ended September 30, 2025 from $21.6 million for the prior-year period, and operating loss widened to $28.5 million from $24.0 million. Accumulated deficit was $317.2 million as of September 30, 2025, and the company expects continued investments.
Weave Payments currently relies primarily on Stripe, and past limited interruptions caused temporary inability for some customers to collect payments. Termination or disruption of Stripe services would decrease revenue and harm customer relationships.
Sales and marketing expense rose 25% to $26.4 million in the quarter and 20% to $75.2 million year to date, with demand generation up $2.2 million and $4.5 million respectively, while revenue grew 17% in both periods. The risk factor says if new customer acquisition costs materially increase, expenses may rise significantly.
The risk factor emphasizes a highly fragmented market with competition from point solutions and PMS or EHR systems of record that may build or partner for competing functionality. Failure to maintain integrations or adverse changes in integration partner pricing could lower the value of the platform.
The company outsources a substantial majority of cloud infrastructure to GCP under a 60-month term through 2027 with no renewal right thereafter. Disruption or inability to arrange alternative cloud infrastructure could interrupt platform availability and increase expenses.
The risk factor heading states that use of AI technologies in the platform and business may not produce the desired benefits and may result in increased liability, reputational harm, or other adverse consequences. The MD&A highlights AI-powered patient engagement and AI-enabled features as central to the platform.
The company provides indemnification against liabilities if the platform contributes to a data compromise, particularly a compromise of protected health information, and must comply with HIPAA and other regulations. A breach could lead to fines, litigation, customer loss, and significant costs.
The risk factor says unfavorable economic conditions and macroeconomic uncertainties may reduce IT spending by existing and prospective customers and lead to longer or delayed sales cycles, with the impact potentially more acute among SMBs that comprise the vast majority of the customer base.
SaaS KPIs
All quarters →Free cash flow
Free cash flow 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 Q3 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.