Summary
Weave closed fiscal 2025 with fourth-quarter revenue of $63.4 million, up 17.0% from $54.2 million in the prior-year quarter. Full-year revenue reached $239.0 million, up 17.0% from $204.3 million. The top line held steady at a mid-teens pace, and the fourth quarter produced a GAAP gross margin of 72.7%, up 60 basis points from 72.1%. For the full year, GAAP gross margin was 72.1%, up 70 basis points from 71.4%. Margin gains came from a favorable customer mix, more customers with fully depreciated phone hardware, and a larger contribution from payments revenue.
Profitability improved at the operating and net lines. Fourth-quarter GAAP loss from operations was $2.2 million, compared with $7.4 million in the fourth quarter of 2024. GAAP net loss was $1.8 million, compared with $6.7 million. For the full year, GAAP loss from operations narrowed to $30.6 million from $31.4 million, and GAAP net loss narrowed to $28.1 million from $28.3 million. GAAP net loss per diluted share was $0.37 for the full year, compared with $0.40. The fourth-quarter operating margin was -3.4%, up 10.2 percentage points from -13.6%. The full-year operating margin was -12.8%, up 2.6 percentage points from -15.4%.
Weave ended 2025 with 39,625 customer locations, up from 34,997 a year earlier, after adding 4,628 net new locations during the year. Retention softened. Dollar-based net retention rate was 93% as of December 31, 2025, down from 98% a year earlier, and dollar-based gross retention rate was 89%, down from 91%. The retention measures exclude the impact of the TrueLark acquisition. Deferred revenue, current portion, was $38.1 million at year end, down 4.8% from $40.0 million. Non-GAAP gross margin was 73.3% in the fourth quarter, compared with 72.6%, and 72.7% for the full year, compared with 71.9%. Non-GAAP income from operations was $2.3 million in the fourth quarter, compared with $1.8 million, and $4.1 million for the full year, compared with $0.8 million. Non-GAAP net income was $2.6 million, or $0.03 per share, in the fourth quarter, compared with $2.4 million, or $0.03 per share. For the full year, non-GAAP net income was $6.6 million, or $0.09 per share, compared with $3.9 million, or $0.05 per share.
Net cash provided by operating activities was $6.2 million in the fourth quarter, down from $6.7 million, but full-year operating cash flow rose to $17.5 million from $14.1 million. Free cash flow was $4.4 million in the fourth quarter, compared with $6.1 million, while full-year free cash flow was $12.9 million, up $2.5 million from $10.4 million. Capital expenditures were $1.1 million in the fourth quarter, up from $0.4 million, and $2.4 million for the full year, up from $2.2 million. Management stated that current cash, cash equivalents, short-term investments, and available borrowing capacity should cover working capital and capital expenditure requirements for at least the next twelve months.
Management issued guidance for the first quarter of 2026 and for the full 2026 fiscal year, covering total revenue and non-GAAP income from operations. First-quarter non-GAAP income from operations is expected between $1.0 million and $2.0 million, while full-year non-GAAP income from operations is expected between $8.0 million and $12.0 million. The company expects weighted average share count of 78.7 million for the first quarter and 79.9 million for the full year. Weave does not provide a reconciliation of non-GAAP income from operations guidance to GAAP income from operations because stock-based compensation and other items are difficult to predict.
The quarter came with several operating initiatives. Weave announced a partnership with CareCredit, whose financing is accepted at nearly 300,000 locations nationwide, and launched Weave Insurance Eligibility for dental insurance verification. It was selected as the American Dental Association's endorsed Patient Engagement solution, with co-marketing access to 160,000 members. Those efforts support the push into the intelligent front office, but execution risks remain. The company must integrate the TrueLark acquisition completed in May 2025, retain and expand within its customer base after the drop in net retention, manage growth, and compete in a crowded healthcare software market. Other risks include unfavorable economic conditions, customer adoption of new AI features such as the AI Receptionist, service interruptions, data compromise involving protected health information, and higher regulatory fees on text messaging and phone calls. The decline in current deferred revenue and the lower retention rates are worth watching as Weave works toward its 2026 targets.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $63.4M | $61.3M | +3.4% | $54.2M | +17.0% |
| Gross profit | $46.1M | $44.3M | +3.9% | $39.0M | +18.0% |
| Gross margin | 72.7% | 72.3% | +0.4 pp | 72.1% | +0.6 pp |
| Research & development | $8.2M | $13.1M | -37.5% | $10.8M | -23.8% |
| Sales & marketing | $27.5M | $26.4M | +4.3% | $21.9M | +25.5% |
| General & administrative | $12.5M | $13.8M | -9.1% | $13.7M | -8.9% |
| Total operating expenses | $48.2M | $53.3M | -9.5% | $46.4M | +3.9% |
| Operating income (loss) | -$2.2M | -$8.9M | +75.8% | -$7.4M | +70.7% |
| Operating margin | -3.4% | -14.6% | +11.2 pp | -13.6% | +10.2 pp |
| Net income (loss) | -$1.8M | -$8.7M | +78.7% | -$6.7M | +72.5% |
| Net margin | -2.9% | -14.1% | +11.2 pp | -12.4% | +9.5 pp |
| Diluted EPS | -$0.02 | -$0.11 | +$0.09 | -$0.09 | +$0.07 |
| Customers | 30,000 | — | — | 30,000 | ±0.0% |
Risks
Dollar-based net retention rate declined to 93% for the year ended December 31, 2025 from 98% for 2024, and dollar-based gross retention rate declined to 89% from 91%. This deterioration indicates challenges in retaining and expanding revenue from existing customer locations.
The company faces risks from AI investments, including the May 2025 acquisition of TrueLark, which may negatively impact cost of revenue and gross margins until revenue offsets these investments. Competitors may incorporate AI into their offerings more quickly or successfully than Weave.
Weave Payments relies primarily on Stripe to provide point-of-sale devices and payment processing services. Any disruption to Stripe's services or termination of the agreement, which expires at various dates after 2028, could decrease revenue and adversely affect the business.
The company substantially relies on Google Cloud Platform (GCP) to host its platform, with an agreement through 2027 and no renewal right thereafter. Disruption or inability to renew could cause service interruptions and additional expenses.
Deferred revenue (current) decreased 4.8% to $38.1 million as of December 31, 2025 compared to the prior year, and the percentage of customer locations electing annual prepayments declined to 27% from 34%. This shift to monthly billing may reduce visibility and affect cash flow timing.
Sales and marketing expenses increased 21% to $102.7 million for the year ended December 31, 2025, representing 43% of revenue, up from 41% in 2024. Rising customer acquisition costs could pressure margins if revenue growth does not keep pace.
The company has experienced significant growth and churn in employees, creating operational challenges, particularly in customer service and sales. Approximately 40% of customer service and support staff have been employed for less than one year, which may affect service quality and retention.
The market is highly competitive with low barriers to entry, and competitors include larger companies with greater resources. Systems of record providers, such as PMS platforms, could expand their offerings to compete directly with Weave's platform.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP gross margin
Dollar-Based Gross Retention Rate (GRR)
Dollar-Based Net Retention Rate (NRR)
Non-GAAP Operating Margin
Number of locations (at period end)
Summary, forecast, risks and KPIs are extracted from Weave Communications, Inc.'s SEC filings for Q4 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.