Weave Communications, Inc.

Please stand by, we're about to begin. Good day and welcome to the WEAVE's fourth quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Barry Hutton. Please go ahead, sir.

Good afternoon and thank you for joining us for the WEAVE communications fourth quarter and 2021 earnings call. Joining me on the call today are Roy Banks, Chief Executive Officer, and Alan Taylor, Chief Financial Officer. Full details of our results and additional management commentary are available in our earnings release, which can be found on the investor relations section of the website at investors.gitweave.com. Please note that this call will be simultaneously webcast on the investor relations section of the company's corporate websites. Before we start, I would like to remind you that the following discussion contains forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding WEAVE's future financial results and management's expectations and plans for the business. These statements are neither promises nor guarantees and involve risk and uncertainties that may cause the actual results to differ materially from those discussed here. You should not place undue reliance on any forward-looking statements. Factors that could cause actual results to differ from the forward-looking statements can be found on our Form 10-Q filed with the SEC on December 9, 2021, which is accessible on the SEC's website at www.sec.gov and also available on our website at investors.getweave.com. as may be supplemented in subsequent periodic reports we file with the SEC. Any forward-looking statements made in this conference call, including responses to your questions, are based on current expectations as of today, and WEAV assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. The following discussion contains non-GAAP financial measures, For reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our earnings press release, which is available in the IR section of our website at investors.getweave.com. Now I will turn the call over to Roy, Chief Executive Officer of Weave.

Good afternoon, everyone, and thank you for joining us today. At Weave, we recognize that small businesses are the backbone of our economy and our communities. Specifically, health care is a significant and essential part of our everyday lives. From the very beginning, we developed an innovative and intelligent phone platform specifically designed to support small businesses in the health care sector so they could modernize and personalize the way they communicate and engage with their patients. Today, that product has evolved into a unified communications platform that enables us to further penetrate our estimated 11.1 billion TAM here in the U.S. Additionally, over the past two years, we further modified our product to help our customers adapt their business practices for a COVID and post-COVID world. We successfully continue to serve small and medium-sized businesses by providing innovative solutions that transform how they communicate, attract, retain, and engage with their customers. As a result, our unified platform solution replaces multiple unrelated and expensive point solutions in a cost-effective way that simultaneously improves the entire customer experience. Given the importance of the healthcare sector, our core customer verticals, dental, optometry, and veterinary, have shown resilience in the face of the pandemic and macroeconomic challenges. We demonstrated success in our ability to support each of these verticals by continuing to refine our solutions to meet their individual needs. Following our recent entrance into the home services vertical, we continue to evaluate and learn about how we need to refine our platform to meet the needs of this exciting new market opportunity. The unique benefits of our platform have enabled us to deliver consistent and strong year-over-year revenue growth despite the challenging market conditions. For the full 2021 year, we earned total revenue of $115.9 million, up 45% over the prior full year. This growth was driven by adding 5,292 net new customer locations to end the year with a total of 23,831. Specifically, in Q4, we earned total revenue of $31.8 million, up 34% year-over-year, which Alan will further discuss later on the call. As I look back on 2021, I am proud of our strong performance and our ability to operate successfully despite the uncertainty of the macroeconomic environment, an evolving pandemic, and the related impacts upon our customers and the Weave business. I am truly grateful for the efforts of our employees, business partners, and customers that contributed to the achievement of a few important milestones that I would like to share now. First, we expanded our leadership team with several executive hires. In particular, we hired a chief revenue officer and a chief marketing officer, both of which are new roles within our company and will help to accelerate our revenue growth and go-to-market execution. We continue to enhance our solutions by executing our integrations playbook with select third-party providers to better serve our audiology and veterinary customers. We executed our vertical domino expansion strategy as we entered the home services vertical, including HVAC and plumbing. We celebrated our 10-year corporate anniversary. And to cap off what was already an exciting and strong year, in November we completed our IPO and began trading on the New York Stock Exchange. As we turn now to 2022, our Weave payment solution has already surpassed the incredible milestone of processing $1 billion of payments volume since its launch in early 2020. We continue to expand this full payment solution with added capabilities such as text-to-pay, wireless terminals, and card-on-file features. Collectively, this payment solution adds yet another way small businesses engage with their customers by collecting payments faster and in more convenient ways. In early February, we announced that we recently won our largest customer engagement in company history, a dental service organization, or DSO, named Dental Care Alliance, that operates more than 370 locations across the country. A 19-location test pilot confirmed that our platform could unify office operations, create communication and engagement efficiencies, and help service more patients in a timely manner. Based on the success of the pilot program, they decided to integrate Weave across their organization. We are now working with this new client to align and schedule the onboarding process of the remaining locations over the next few quarters, creating a healthy pipeline of new locations. As we prepared our 2022 business plan, we recognized and anticipated the ongoing uncertainty of the macroeconomic environment that is beyond our control, including the evolving pandemic and a labor market that has challenged our efforts to retain, hire, and ramp productivity within our sales and customer onboarding organizations. In light of these challenges, we have continued to improve, adapt, and optimize our lead generation, go-to-market and sales strategies to increase our effectiveness reduce customer acquisition costs, and increase ROI. Under the combined leadership of our recently appointed Chief Revenue Officer and Chief Marketing Officer, we are taking actions to enhance our sales and marketing processes to improve alignment across key functions, productivity, and sustainability of our operations. This refocused effort will support ongoing growth despite the changing conditions in the macroeconomic environment. A few aspects of this new and improved program include we will remain focused on maximizing the opportunities within our core verticals of dental, optometry, and veterinary, which have proven to generate significant ROI for us over time and represent markets in which we remain largely underpenetrated. In each of these areas, we will continue to add more functionality to our platform and improve our overall customer experience. We are excited by the opportunity to increase our market share in each of our core markets as our product market fit remains strong and resonates more acutely during the pandemic. Additionally, we will continue our efforts to improve our WEA payments offering and make progress in specialty medical and our new verticals in home services, which are still in their early stages. In 2022, as the impact of the pandemic may become less severe, we expect that our participation level in live marketing events, which pre-COVID provided significant high-quality lead flow, will surpass our 2020 and 2021 levels. To the extent that these events come back, we will selectively invest our resources and once again exploit this historically valuable customer acquisition channels. However, the number of live marketing events in 2022 are still expected to be well below the 2019 pre-pandemic levels. So we are continuing to offset our previous reliance on live sales events by implementing and executing new digital marketing and lead generation tactics. We are also evolving our sales model to optimize lead sources, opportunities, and value per lead. Said another way, our future lead generation efforts will more narrowly target the vertical markets where we have had proven success and incredible product market fit. This will increase productivity, lower our customer acquisition costs, and ultimately help grow our subscription revenue and payment processing volume and revenue. As part of our effort to adapt and optimize our go-to-market strategy, we are transitioning our sales approach into a more efficient motion that better supports our sales cycle, reduces our customer acquisition costs, and allows us to scale for continued and future growth. While we recognize that we have experienced some Salesforce turnover during this transition, early results give us confidence that we will end up in a position to better serve our target customers while we execute a sustainable and cost-efficient go-to-market strategy. Our ability to continually improve our technology platform and other aspects of our customer success is paramount. In the fourth quarter and early first quarter, we have already completed several meaningful platform enhancements, which include Vetter integration. We launched with Vetter in Q4 as a new integration partner that repeats our integrations playbook in the veterinarian vertical. By providing an automated sync, customers will see real-time updates to their daily calendars and patient contact information. This eliminates the need for manual data uploads and provides improved communication solutions to veterinarians. New product updates. We've added mobile functionality that is key for many of our verticals to help users capture and save their future customers' information via the Weave mobile app. Payments product updates. In Q4, we expanded the Weave payments offering by adding the card-on-file feature, making collecting payments a faster experience for business owners and customers. We also launched wireless payment terminals. As I reflect upon where we are today, it's clear that our company and our customers have been impacted by certain macroeconomic challenges, and we've continued to adjust our business operations to sustain improvements in customer service and revenue growth. Collectively, these evolving factors impacted our sales and new location onboarding productivity as we approach 2022 and are reflected in the guidance we provide today. However, I am confident in our competitive position and our ability to significantly grow and increase our market share, particularly in our core vertical markets of dental, optometry, and veterinary. Within that context, the executive team and I have identified and started to implement a series of go-to-market strategies and operational changes that I outlined moments ago. While we are confident in these changes, it will take some time to see the results. As such, we are optimistic that we will see renewed sales and revenue momentum in the back half of 2022. With that, I'll turn the call over to Alan to discuss our financials.