Weave Communications, Inc.

Greetings and welcome to Weaver Communications' third quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mark McReynolds, Head of Investor Relations. Thank you. You may begin.

Thank you, Rob. Good afternoon, and thank you for joining us for WEAVE's third quarter 2023 earnings conference call. Joining the call today are Brett White, CEO, and Alan Taylor, CFO. Brett will open the call with an overview of WEAVE's performance, and Alan will discuss our financial results in more detail. After the prepared remarks, we'll take questions. Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Please refer to the cautionary language in the earnings release and in WEAV's filings with the Securities and Exchange Commission, including our most recent Form 10-K and 10-Q, for additional information concerning factors that could cause these results to differ materially from the forward-looking statements. We'll also discuss financial measures that do not conform with generally accepted accounting principles. For the sake of clarity, unless otherwise noted, all numbers we talk about today will be on a non-GAAP basis. Information may be calculated differently than similar non-GAAP data presented by other companies. A reconciliation between these non-GAAP and GAAP financial measures is included in our earnings press release, which can be found on our investor relations website at investors.getweave.com. And with that, I'll turn the call over to Brett. Thank you, Mark.

And thank you to everyone for joining us on this call today. Before diving into our Q3 performance, I'd like to provide a brief overview of Weave for those of you who are new to our story. Weave provides small and medium-sized healthcare businesses with a vertically tailored customer experience and payment software platform, helping practitioners to modernize and personalize every interaction with their patients. Our customers typically do not have dedicated technology staff, so they need software solutions that are easy to implement and manage. Weave unifies a patchwork of point solutions into a single platform that helps attract, engage, and retain patients. SMBs make up the vast majority of businesses in the U.S., and we have spent almost 15 years building a platform specific to the needs of SMB healthcare practitioners. These businesses are well-capitalized, well-managed, and have demonstrated their resilience even through economic challenges of recent years. Moving on to our Q3 2023 results, we've had an excellent quarter, and I'm very pleased with the team's execution, delivering another quarter of both year-over-year and sequential quarterly improvements in revenue growth rate, gross and operating margin, adjusted EBITDA, and free cash flow. Revenue for Q3 was 43.5 million, representing 20.2% year-over-year growth. we exceeded the top end of our revenue guidance for the seventh quarter in a row, and we posted our third quarter in a row of accelerating year-over-year revenue growth. This growth was driven by continued strong demand for our platform and our expanding customer base. During Q3, we saw increased demand from both digital channels and in-person events, and we continued to add capacity to our sales team. In addition to our core verticals of dental, optometry, and veterinary, we saw increased demands from additional specialty medical providers and continued to expand our platform to support them. In Q3, we continued to make positive progress in the efficiency of our business. Our gross margin improved for the seventh consecutive quarter to 69.3%, a 470 basis point improvement increase from last year. Additionally, we cut our operating loss margin from last quarter by more than half to 4.2% of revenue Lastly, we produced $2.1 million in free cash flow, bringing us to $3.6 million in free cash flow generated year-to-date. These results reflect that our vertically tailored software payments platform continues to gain traction, and the Weave team is executing with intense focus on the needs of the customers and the verticals that we serve. On the product front, the team has been hard at work developing our next-generation platforms. which features an enhanced user interface to improve workflows, overall usability, and is optimized for multi-location customers. Customers with more than one location can perform key tasks for multiple practices from a single screen. This week, we will open up early access to this improved experience, and we are excited to receive customer feedback on this highly requested functionality. Additionally this week, We signed an agreement that deepens our existing partnership with Henry Schein 1, a leading provider of software for dentists with over 100,000 customers. In November, we will launch an integration with the Dentrix Ascend platform, Henry Schein 1's premier cloud-based practice management software with advanced features for group practices and DSOs. This new integration will open up a more robust set of weave features to Dentrix Ascend customers. On the payments front, our offering enables our customers to expedite billing and collect payments with minimal effort and administrative hassle. Payments are increasingly digital, and our aim is to provide customers with multiple options to collect payments as quickly and efficiently as possible. Our customer experience software platform powers frictionless and flexible payment options, which helps create a positive patient experience, build trust, and encourage repeat business for our customers. In September, we announced a new partnership with affirm integrated directly into our platform affirm allows patients to commit to treatment now and pay over time, making it easier to access and afford the care they need. This collaboration, not only benefits patients, but also enhances the speed of revenue collection for our practitioners, our customers experience is the keystone to retention. and Weave continues to receive positive recognition and validation that our platform delivers best-in-class results. Since 2017, Weave has been recognized every quarter as a leader in G2. In G2's Fall 2023 report, Weave ranked first in 34 different categories. These independent reports are grounded in authentic reviews, customer satisfaction metrics, and market presence. This recognition underscores our commitment to deliver technology tailored to suit the unique needs and challenges of our customers. In Q3, we also crossed a significant milestone, growing our customer base to over 30,000 active locations. This is a testament to both customer acquisition and retention as customers adopt Weave as their preferred customer experience platform. In our past several earnings calls, we've discussed the concept of boomerang customers. offices that leave Weave for a competitive solution only to come back a short time later after being dissatisfied with the competitive offering. This trend continued in Q3, and we have had approximately 350 Boomerang customers year-to-date. This trend provides another data point and underscores the scope and value delivered by our platform. Finally, before I hand it over to Alan, I'd like to take a moment to share a recent personnel change. Our Chief Revenue Officer, Matt Hyde, will be leaving Weave later this month to pursue a new opportunity, and we wish him luck with his future endeavors. During Matt's two-and-a-half-year tenure at Weave, he was instrumental in transforming our sales function into a tightly run organization that will enable us to scale for many years to come. Included in this transformation has been the development of an outstanding sales management team led by our VP of Sales, Jake Caressa. Jake will assume the role of interim CRO immediately effective while we conduct a search both internally and externally. I have complete confidence in Jake and the entire sales organization in continuing to produce the solid and improving results that we have experienced over the last several quarters. In conclusion, we are very pleased with the strong results and sustained momentum in Q3. Revenue growth continues to accelerate, and our execution and efficiency continues to improve. Thank you to our customers, our team members, and our shareholders for your support of WEED. We're excited about the path ahead and are intently focused on finishing an excellent year on a strong note. With that, I'll turn it over to Alan to go through the financial results in more detail, and then we'll take questions. Alan?