Business Context and Reporting Period
Company: Weave Communications, Inc. (WEAV)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: Weave is a vertical Software-as-a-Service (SaaS) platform providing AI-powered patient engagement and payment solutions for small and medium-sized healthcare practices. The company operates as a single reportable segment.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 | Q2 2025 | 6M 2026 | 6M 2025 |
|---|---|---|---|---|
| Revenue | $67,542 | $58,470 | $133,042 | $114,279 |
| Gross Profit | $48,653 | $41,951 | $96,192 | $81,896 |
| Gross Margin | 72% | 72% | 72% | 72% |
| Net Loss | $(4,257) | $(8,711) | $(10,027) | $(17,536) |
| Adjusted EBITDA | $4,569 | $1,059 | $8,293 | $2,079 |
| Free Cash Flow | $8,702 | $4,478 | $1,578 | $3,416 |
| Cash & Equivalents (End of Period) | $47,630 | $44,665 | $47,630 | $44,665 |
| Short-term Investments | $30,839 | $26,761 | $30,839 | $26,761 |
| Deferred Revenue (Current) | $37,299 | $38,051 | $37,299 | $38,051 |
Note: Free Cash Flow is defined by the company as net cash provided by operating activities less purchases of property and equipment and capitalized internal-use software costs.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 16% year-over-year for both the quarter and six-month periods. Growth was driven by approximately $7.5 million (Q2) and $13.5 million (6M) from new customer locations, with the remainder from existing customer expansion.
- Profitability Improvement: Net loss narrowed significantly, decreasing 51% for the quarter and 43% for the six-month period compared to 2025. Adjusted EBITDA turned positive and grew substantially ($4.6M in Q2 vs. $1.1M in Q2 2025).
- Expense Management: General and Administrative (G&A) expenses decreased 9% in Q2 and 6% in the six-month period, primarily due to reduced stock-based compensation and personnel costs. Sales and Marketing expenses increased 9% (Q2) and 15% (6M) due to higher demand generation spend.
- Acquisition Impact: The company acquired Vidurama, Inc. (TrueLark) in May 2025. While the acquisition did not materially impact revenue in the current period, it contributed to goodwill of $29.5 million and intangible assets.
Guidance, Outlook, and Risks
- Outlook: Management expects operating cash flows to improve as the company scales. The company is focusing on expanding into medium-sized businesses (Weave Enterprise) and new healthcare verticals (specialty medical). AI integration (AI Receptionist) is a key growth driver.
- Liquidity: As of June 30, 2026, the company held $78.5 million in cash, cash equivalents, and short-term investments. It maintains a $50.0 million revolving credit facility with Silicon Valley Bank, with no outstanding borrowings and full compliance with covenants.
- Key Risks:
- Regulatory: Evolving regulations regarding AI, data privacy (HIPAA, CCPA), and telecommunications (FCC, STIR/SHAKEN) could increase compliance costs.
- Operational: Reliance on third-party providers for cloud infrastructure (Google Cloud Platform) and payment processing (Stripe) creates concentration risk.
- Market: Competition from point solutions and systems of record providers; sensitivity of SMB customers to economic downturns.
Investor Verification Checklist
- Retention Metrics: Verify the reported Dollar-based Net Revenue Retention Rate (92% as of June 30, 2026) and Gross Revenue Retention Rate (89%) to assess customer stickiness.
- AI Investment ROI: Monitor the impact of AI investments on cost of revenue and gross margins, as management notes these may negatively impact margins until revenue scales.
- Debt Covenants: Confirm continued compliance with the SVB credit facility covenants, specifically the minimum liquidity requirement of $20.0 million and adjusted EBITDA thresholds.
- Stock-Based Compensation: Review the trajectory of stock-based compensation, which decreased significantly in 2026 but remains a material non-cash expense ($14.2M for 6M 2026).
- Deferred Contract Costs: Analyze the $11.5 million increase in deferred contract costs (sales commissions) in the first half of 2026, indicating aggressive sales bookings.