Weave Communications, Inc.

Good day, ladies and gentlemen, and welcome to WEAVE third quarter 2024 financial results conference call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Mark McReynolds, head of investor relations. Sir, the floor is yours.

Thank you, Kat. Good afternoon and welcome to Weave's third quarter 2024 earnings call. With me on today's call are Brett White, CEO, and Alan Taylor, CFO. During the course of this conference call, we will make forward-looking statements regarding the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations and tell certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings. We've disclaimed any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. Unless otherwise noted, all numbers we talk about today will be on a non-GAAP basis. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8K furnished with the SEC before this call. as well as the earnings presentation on our investor relations website at investors.getweave.com. With that, I will now turn the call over to Brett.

Thank you, Mark. And thanks to everyone for joining the call today. I'd like to start with a few financial highlights from Q3. We delivered another quarter of solid top line performance and significant improvements in gross and operating margins and free cash flow. We also achieved another major performance milestone, reporting positive non-GAAP operating income for the first time in the company's history. Revenue for Q3 was $52.4 million, representing over 20% year-over-year growth and $1.2 million above the midpoint of the guidance range we provided in July. Gross margin reached 72.5%. an improvement from last quarter and over 300 basis points greater than Q3 of last year, marking our 11th consecutive quarter of gross margin improvement. Weave's mission is to enhance healthcare experiences for both patients and the practices that serve them. We deliver an all-in-one customer experience and payment software platform specifically designed for small and medium-sized healthcare practice. Our solution enables healthcare providers to focus on patient care while we help optimize office operations, streamline billing and payment processing, and drive practice growth for improved patient communication and engagement. Our current focus is on dental, optometry, veterinary, and specialty medical verticals, which we estimate is an addressable market exceeding $7 billion in the U.S. alone. Specialty medical, which includes family practice, med spa, plastic surgery, and physical therapy was our fastest growing category, again, in Q3. Our origins are in helping practitioners grow their businesses by effectively attracting, engaging, and retaining patients. The integration of FinTech solutions like payment processing, buy now, pay over time, and payment plans is a natural progression to help practitioners accelerate collections and increase acceptance rates of additional services. With Weave, billing and payment requests are seamlessly integrated into communication workflows using the practice's trusted phone number and domain. This approach streamlines payment timelines, reduces accounts receivable and write-offs, and further supports practice growth and profitability. Healthcare providers, often without dedicated IT, business intelligence, finance, or marketing teams, rely on intuitive software like Weave to succeed. Our platform integrates seamlessly with practice management systems, enabling greater personalization, more automation, and improved data accuracy. Last week, we announced the availability of the new Weave platform, which is the most significant product launch in our company's history. This is a culmination of a multi-year effort that holds great strategic importance for Weave and our customers. Now available across all customer locations, the new Weave platform strengthens our market position with a robust, scalable, and cutting-edge technology infrastructure that enables us to accelerate innovation. Weave has been at the forefront of administrative AI solutions for healthcare practices, and an AI-powered Weave Assistant is integrated throughout the new platform. Our unique advantage is that we have more than a decade of patient interactions available to train large language models. This unique training dataset includes billions of records like phone calls, voicemails, and SMS messages. Our AI-powered features provide immediate customer value. McKinsey reports that AI tools could automate nearly 45% of administrative tasks in the healthcare sector, potentially saving $150 billion annually. Weave Assistant helps craft personalized responses to reviews, write professional branded emails, and automate tasks like message tagging and voicemail transcriptions. Our new call intelligence product leverages a custom AI model to extract actionable insights from call data. To keep their businesses running smoothly, our customers must manage communications and payments workflows simultaneously. The new Weave platform improves practice operations by consolidating tasks into a more unified system. It features a modern user interface that prioritizes versatility and ease of use, streamlining daily tasks with fewer steps and clicks. Pop-out texting and team chat allows users to text patients, chat with staff, accept a phone call, and view the calendar all at the same time. Users can toggle between locations to access one or all locations and configure forms, messages, and other settings once for a single location or multiple locations with ease. The NuWe platform features an enhanced user interface, which can now expand to full screen for a comprehensive view or shrink to fit seamlessly alongside the practices system of record. A fully customizable dashboard places the most essential elements front and center providing a helpful overview of the day. The new Weave platform is available via mobile app, desktop app, or any browser. Security and software updates are installed automatically, ensuring the platform stays up to date without any extra effort on the part of our customers. I invite you to watch a two-minute video on our website to see firsthand the exciting leap forward our new platform represents for our customers. Take a look at getweave.com slash new. Last week, we also launched an enhanced email marketing tool on the new Weave platform, enabling the easy creation of professional on-brand emails with a drag-and-drop composer, pre-built templates, and free stock images. Emails can be sent from the trusted business domain to ensure professionalism and help avoid spam filters. Our AI-powered Weave Assistant helps craft content while advanced filters target the right audience. The new WEAVE platform also introduces a new specialized user interface for veterinary practices. These UI enhancements built in collaboration with veterinary professionals streamline daily operations and improve the experience for clinic staff and clients. By making pets the primary profile across the WEAVE platform, the update enabled more personalized service and allow front desk staff to quickly access essential pet details. In addition to enhancements to our user experience and AI-powered features, the NewWeave platform opens up valuable opportunities for seamless integration of payments functionality into communication workflows via the trusted practice phone number. By embedding billing and payment features throughout the entire patient journey, from appointment scheduling to post-visit text-to-pay notifications, we simplify and enable customers to accelerate the billing and collection process. With Weave Payments, our customers can easily allow their patients to pay using their preferred methods. Practices can send payment requests via text-to-pay, accept payments through credit cards or ACH direct debit, and offer online and in-person payment options like online bill pay, scan-to-pay, and mobile tap-to-pay. Practices can also keep payment methods on file and provide flexible options such as buy now, pay over time, and payment plans. This empowers practices to increase procedure acceptance rates, optimize billing operations, improve collections on pass-to accounts, and reduce write-offs. In Q3, we've also announced payment reminders. This new feature allows our customers to collect more outstanding balances with less effort by turning each Weave payment invoice or text-to-pay request into an automated collection campaign. As we announced last quarter, the new Weave platform powers Weave Enterprise. Our solution design specifically for multi location practices. Approximately one third of our active locations are part of multi location group, and we've enterprise offers advanced capabilities like a unified inbox for appointments and forms, centralized management tools, region specific reporting and robust payment and collection features. We're very excited to share an early success story for the new platform and our enterprise product. Earlier today, we announced that Affordable Care, America's largest dental support organization for tooth replacement services, has selected Weave as the platform of record for patient engagement and payments across its supported dental practices. Affordable Care chose Weave for our ability to integrate seamlessly with their databases, streamline and automate patient engagement, and provide new digital payment options that fit naturally into patient communication workflows. Since implementing WEAVE, affordable care pilot locations have achieved measurable improvements in operational efficiency through online scheduling and digital forms by also seeing boosts in patient acquisition and treatment acceptance rates. These practices report increased cash flow and revenue capture per location, driven by flexible payment options that optimize revenue cycle management and enhance overall patient experience. To further drive growth in the multi-location space, we have recently added a seasoned leader with 20 years of industry experience to head our multi-location sales team. His experience, strategic vision, and strong market relationships will play a crucial role in Weave's presence, particularly among dental service organizations, or DSOs. On the partnership front, we continue to make progress. Our authorized and supported integrations with leading practice management systems empowers practices to automate and personalize their communications and play a critical role in driving growth across our target markets. This year, we have expanded our addressable market through new integrations with eClinicalWorks, Athena Health, NextGen, EasyVet, and other practice management systems. We've also deepened existing integrations with Dentrix Ascend, EagleSoft, and Fuze to include reading and writing patient information, appointment details, confirmations, and ledger entries to streamline payments collections, helping practices further enhance efficiency and accelerate growth. Even more compelling, we have advanced our strategic approach by forming deeper commercial partnerships. In June, we announced a strategic agreement with Patterson Dental, offering one of the most comprehensive integrations in the market and enabling co-marketing and co-selling initiatives. Since then, close collaboration between Weave and Patterson leadership has enhanced value for our shared customers, resulting in improved conversion rates at every stage of the sales cycle and bookings growth. Finally, Weave continues to earn recognition for our dedication to delivering exceptional customer experiences and the outstanding performance of our platform and team. In G2's fall 2024 report, Weave ranked first in 21 categories, and was once again named the leader in the grid for patient relationship management and was listed among the top 50 software products for small businesses. Additionally, Weave was named an Inc. Power Partner, recognizing our impact in helping businesses start, run, and grow. We are committed to fostering an exceptional workplace, and Weave is now Great Place to Work certified in the U.S. for six consecutive year and for the first time in India. In closing, I'm incredibly proud of the Weave team's achievement in Q3 as we continue our momentum from the first half of the year. We drove strong top-line growth, made solid progress in profitability, and brought to market some truly innovative new products. This success reflects our commitment to putting our customers first and constantly delivering solutions that meet their needs. I want to sincerely thank our customers, partners, team members, and shareholders for their ongoing support of Weave. With that, I'll hand the call over to Alan to dive deeper into the financial results and share our outlook. Alan?