Summary
Weave Communications closed fiscal 2022 with fourth quarter revenue of $37.7 million, up 18% from the prior-year quarter. Full year revenue reached $142.1 million, up 23%. Gross profit was $24.93 million for the quarter, up 37.3%, and $88.84 million for the full year, up 33.6%. Gross margin came in at 66.2% for the quarter and 62.5% for the year. The operating loss narrowed to $9.75 million in the quarter from the prior-year quarter, and the full year operating loss was $49.70 million, also narrower than the prior year. Net loss was $9.27 million for the quarter, a narrower loss than the prior year quarter, and $49.74 million for the full year, again narrower. Diluted loss per share for the full year was $0.76, an improvement from the prior year. Operating margin was negative 25.9% for the quarter and negative 35.0% for the full year.
The company added 3,362 net new customer locations during 2022 and finished the year with 27,193 customer locations, up from 23,831 at the end of 2021. Retention softened. Dollar-based net retention rate was 99% as of December 31, 2022, down from 103% a year earlier, while the dollar-based gross retention rate held at 94%. Management describes its growth levers as attracting new customers, expanding within the base, adding products and moving into new verticals, with particular focus on specialty healthcare. On a non-GAAP basis, loss from operations was $4.2 million in the fourth quarter, compared with $10.6 million a year earlier. The full year non-GAAP loss from operations was $31.0 million, an improvement from $36.3 million. Adjusted EBITDA was negative $2.4 million for the quarter, better than negative $9.7 million in the prior-year quarter, and negative $25.7 million for the year, better than negative $33.3 million.
Cash consumption improved through the year. Operating cash flow was negative $2.84 million in the quarter, better than the prior-year quarter, and negative $12.77 million for the full year, also better than the prior year. Free cash flow, which the company defines as net cash used in operating activities less purchases of property and equipment and capitalized internal-use software costs, was negative $3.774 million for the quarter and negative $15.893 million for the year, compared with negative $12.197 million and negative $30.182 million in the comparable prior-year periods. Capital expenditures were $0.70 million in the quarter, down from the prior-year quarter, and $1.90 million for the full year, down from the prior year. Deferred revenue was $34.14 million at December 31, 2022, up 15.7% from the prior-year quarter.
Guidance for the three months ending March 31, 2023 is a range of $37.5 million to $38.5 million, with a non-GAAP loss from operations of $4.5 million to $5.5 million. For the full year ending December 31, 2023, management's outlook is $156.0 million to $160.0 million, with a non-GAAP loss from operations of $21.3 million to $17.3 million. Weighted average share count is expected to be 66.0 million in the first quarter and 68.0 million for the full year. The company notes that stock-based compensation, which is excluded from the non-GAAP loss, depends on future hiring and the share price, so the GAAP result could diverge. Risks flagged in the filing include transitions in company leadership, the ability to attract and retain customers, managing growth, the pandemic, brand awareness, competition, customer acquisition costs, platform enhancements, service interruptions and general economic conditions. Weave also addressed the failure of Silicon Valley Bank. As of March 15, 2023, cash held at Silicon Valley Bridge Bank, N.A. was less than 1% of cash and cash equivalents and short-term investments. The credit facility requires at least $20.0 million in liquidity if certain cash thresholds are not met.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $37.7M | $36.2M | +4.0% | $31.8M | +18.4% |
| Gross profit | $24.9M | $23.2M | +7.4% | $18.2M | +37.3% |
| Gross margin | 66.2% | 64.0% | +2.1 pp | 57.0% | +9.1 pp |
| Research & development | $8.2M | $7.9M | +3.6% | $7.1M | +15.2% |
| Sales & marketing | $16.1M | $16.3M | -1.1% | $15.8M | +2.2% |
| General & administrative | $10.4M | $10.9M | -4.6% | $8.9M | +16.3% |
| Total operating expenses | $34.7M | $35.1M | -1.1% | $31.8M | +9.1% |
| Operating income (loss) | -$9.7M | -$11.9M | +17.8% | -$13.6M | +28.5% |
| Operating margin | -25.9% | -32.7% | +6.9 pp | -42.8% | +17.0 pp |
| Net income (loss) | -$9.3M | -$11.8M | +21.6% | -$14.1M | +34.1% |
| Net margin | -24.6% | -32.6% | +8.0 pp | -44.2% | +19.6 pp |
| Diluted EPS | -$0.14 | -$0.18 | +$0.04 | -$0.69 | +$0.55 |
| Customers | 25,000 | — | — | 22,000 | +13.6% |
Risks
The company states that its recent rapid growth may not be indicative of future growth and expects its growth rate will decline in the future due to increasing scale and higher penetration in existing vertical markets.
Dollar-based net retention rate declined to 99% for the year ended December 31, 2022 from 103% for 2021. The company notes that a majority of customers pay monthly and have no contractual obligation to renew.
Revenue is derived from SMBs, which are more susceptible to economic downturns. MD&A highlights ongoing macroeconomic uncertainties including inflation, interest rates, and recession risks that could reduce customer spending.
The company depends on a contract with dental PMS provider Dentrix through July 2026 for critical integration functionality for a significant portion of its customer base. Any termination or adverse change could lower platform value and harm results.
Weave Payments relies on a single payment service provider, Stripe, under agreements expiring after 2028. Any disruption or termination of that relationship could decrease revenue and harm customer relationships.
The company substantially relies on Google Cloud Platform (GCP) to host its platform, and any disruption of or interference with GCP could materially adversely affect operations and financial condition.
The market is highly competitive, and some competitors are larger with greater resources. This could lead to pricing pressure, reduced margins, and difficulty attracting or retaining customers.
The company has experienced significant employee churn, particularly in customer service and sales organizations. Approximately one-third of customer service and support staff have been employed for less than one year, which may affect service quality and growth.
The company has experienced higher fees associated with text messaging from network service providers. Reliance on these providers reduces operating flexibility and control over quality of service and costs.
The company may require additional capital to support growth, and such capital may not be available on acceptable terms. Future equity or debt issuances could dilute existing stockholders or impose senior rights.
Executive officers, directors, and holders of more than 5% of capital stock beneficially owned approximately 65.5% of total shares outstanding as of December 31, 2022, limiting other stockholders' ability to influence corporate matters.
As an emerging growth company and smaller reporting company, the company may take advantage of reduced disclosure and reporting requirements, which could make its common stock less attractive to investors and impair comparability.
The company had deposits at Silicon Valley Bank (SVB), which was closed on March 10, 2023. As of March 15, 2023, cash held at SVB represented less than 1% of cash and short-term investments, considered immaterial to liquidity.
SaaS KPIs
All quarters →Dollar-Based Gross Retention Rate (GRR)
Dollar-Based Net Retention Rate (NRR)
Number of locations (at period end)
Total customers
Summary, forecast, risks and KPIs are extracted from Weave Communications, Inc.'s SEC filings for Q4 FY2022 (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.