Weave Communications, Inc.

Greetings and welcome to the Weed Communications Q4 and Full Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the full more presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce our host, Mark McReynolds, Head of Investor Relations. Thank you, Mark. You may begin.

Thank you, Matt. Good afternoon and welcome to WEAVE's fourth quarter and fiscal year 2024 earnings call. With me on today's call are Brett White, CEO, Alan Taylor, CFO, and Jason Christensen, VP of Finance. 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 to tell certain assumptions made out of today's data and are subject to various risks and uncertainties described in our SEC file. We've disclaimed any obligation to update or revise any forward-looking statements. Further, on today's call, we will discuss certain non-GAAP metrics that we believe aid the understanding of our financial results. And as 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.gitme.com. And with that, I'll now turn the call over to Jack.

Thank you, Mark, and thanks to everyone joining us today. 2024 was a year of remarkable progress and transformation for Weave. I'm excited to share key financial and strategic highlights from the past year, as well as our vision for 2025. We exist to create better healthcare experiences for patients and the practices that serve. Our goal is to make every interaction with a healthcare provider simple, seamless, and positive. For SMB healthcare practitioners, managing a small healthcare business while delivering quality patient care is challenging. We've streamlined operations, making it easier for providers to focus on what matters most, caring for their patients. Our vision is to elevate the patient experience through a unified platform that improves business operations, enabling healthcare professionals to focus on patient care and achieve their dreams. Instead of a fragmented set of tools, we've offered an AI-powered solution that integrates communication, scheduling, forms, payments, and more. Through authorized and supported integrations with leading practice management systems, we unlock deeper functionality without adding complexity. These integrations enable practices to automate and personalize patient communication while embedding FinTech solutions, such as Tech2Pay, Tech2Pay Online Bill Pay, and payment plans directly into the communication workflows. By streamlining payment processes, Weave accelerates collections, reduces write-offs, and improves practice profitability. Technology isn't just about efficiency and revenue growth for healthcare practices. It's a key factor in attracting and retaining top talent. 61% of practitioners agree that hiring high-quality employees is easier when their practice leverages the latest office technology, and almost 70% say that retaining great staff is significantly improved with modern tools in place. Investing in the right technology enhances the workplace experience and reduces burnout. Weave's platform gives practices a competitive edge, not just in patient engagement and payments, but in building strong, successful teams. By helping healthcare practices attract, engage, and retain patients, Weave enables providers to focus on what they do best, delivering excellent care while growing their business. For many, their practice is a lifelong dream, and Weave is here to help them achieve it by simplifying operations, reducing burdens, and empowering them to build thriving patient-centered practices. The dental, optometry, veterinary, and specialty medical verticals we serve give us access to an addressable market that we believe exceeds $7 billion in the U.S. alone. Before Alan shares more details about our financial performance, I want to share a few key highlights. In Q4 24, we delivered another outstanding quarter with strong revenue growth of nearly 19%, and continued improvements of both profitability and free cash flow. Growth margins improved again for the 12th consecutive quarter, reaching 72.6%. Q4 also marked our second consecutive quarter of positive operating income, resulting in full-year profitability for the first time in WEIS history. We achieved $6.1 million in free cash flow in Q4, more than doubling year over year, and representing a free cash flow margin of 11%. We produced free cash flow of $10.4 million for the year, representing nearly 60% year-over-year growth. Finally, we're very pleased to have exceeded the high end of the revenue and profitability guidance we gave a year ago. These results underscore the strong market demand for our solution, driven by the disciplined execution and a clear commitment to efficient growth. At the start of 2024, we identified several key focus areas to open up and expand new vectors of growth, including expanding into specialty medical verticals, strengthening integration partnerships, enhancing solutions for multi-location practices, elevating payments as a core component of our product, and delivering AI-powered innovations. Today, alongside our financial performance, I'm excited to share the significant progress we've made in each of these areas. In 2024, we laid the groundwork for success, and we're already seeing strong early traction. As a result, in 2025, we will be expanding these initiatives and investing to further accelerate momentum. Let me provide some additional color into each of these key growth factors. In 2024, we identified a set of specialties within the SMB medical vertical at strategic expansion opportunities. Revenue from specialty medical practices led by primary care, med spa, plastic surgery, and physical therapy grew at twice the rate of the overall company revenue in 2024. Specialty medical remained our fastest growing market segment in Q4 with more active medical locations added than in any previous period. Our momentum in this space was fueled by the release of new authorized integration with practice management software, including eClinical Works, Athena Health, Dr. Crono, and NextGen, expanding our reach and deepening the value of our platform. The SMB medical market in the U.S. spans 29 specialties, representing an addressable opportunity that is more than twice the size of the dental, optometry, and veterinary markets combined. With less than 1% market penetration in this vertical, we are only beginning to unlock its vast potential. We began 2025 with the launch of authorized integrations with prompts and practice fusion, further expanding our presence in the medical vertical. At the same time, we are expanding our go-to-market efforts by broadening our target specialties, increasing demand generation investments, and advancing sales enablement programs. These initiatives will accelerate our growth in high-potential medical specialties and solidify Weave's position as a category leader while expanding our market share. Turning to partnerships, in early 2024, we launched a dedicated partnerships team led by an experienced executive to drive new growth opportunities. This investment expanded our serviceable market by over 100,000 locations through new and enhanced integrations across all of our vertical markets. Our strategic partnership with Patterson Dental announced in June significantly broadened our market reach through co-marketing and co-selling efforts resulting in increased bookings and payments revenue in the latter half of 2024. Additionally, our commercial and integration partnership with Prompt, which launched this month, marks a major milestone in our expansion into the physical therapy market. Since launch, we have actively driven adoption through co-marketing efforts, engaging both shared customers and new prospects. To build on this momentum, we are launching a dedicated partner sales team in 2025 that will work closely with our commercial partners. By embedding within their go-to-market strategy, we aim to deepen collaboration, increase engagement, drive referrals, and accelerate revenue growth. Given the strong early success of our partnership strategy, we will continue to invest in 2025, strengthening both sales and marketing resources to further expand our market presence and accelerate growth. Another key focus of our strategy this year is expanding our mid-market customer base. In Q2 of 24, we launched an enterprise solution on our platform to meet the unique needs of multi-location practices. We added a proven sales leader in Q3 to accelerate our progress, and in Q4, Affordable Care, the nation's largest dental service organization for tooth replacement, shows Weave as its platform of record for patient engagement and payment. In 2025, we are expanding our mid-market sales capacity and increasing our marketing investments. These efforts will deepen engagement and expansion in existing accounts, drive pipeline growth, and position we for sustained success in this segment. In line with our other focus areas, we are seeing strong traction in our payments business. In 2024, we pointed a general manager of payments and doubled the size of our operations and an engineering team. We integrated payments with some of the largest practice management systems in our space, including Open Dental and Patterson's EagleSoft and Fuse, to deliver more streamlined communication and collection workflows for our customers. We enhanced our payments product suite with payment plans and payment reminders, which helped improve case acceptance and reduce outstanding accounts receivables for our customers. Timely payments are crucial for the financial health of any practice, and Weave Payments is designed to make that easier. 74% of practices believe they get paid faster by offering text-to-pay, and 62% say it helps prevent overdue invoices. Affordable Care selected the Weave Enterprise solution to improve collections and reduce write-offs with integrated digital payment solutions like text-to-pay. By leveraging mobile terminals, flexible payment options, and embedding payments into patient communication workflows, Affordable Care practices using Weave have seen significant revenue cycle management improvements. In 2025, payments will be a core element of our product and go-to-market strategy. Payments are now seamlessly integrated into our initial sale, reducing time to value for our customers. We are also investing in dedicated payments teams focused on adoption and increasing usage within our customer base. We believe that these resources will result in a scalable, resilient payments business that is well-positioned to drive continued growth in the coming years. Another important aspect of our strategy is AI. Last year, we made meaningful strides in this area. We launched our AI power platform for both single and multi-location practices. Weave AI is embedded throughout our platform to help streamline communications between a practice and its patients through review responses, email marketing creation, message tagging and prioritization, and voicemail transcriptions. In Q4, we announced our AI-powered call intelligence product. This revolutionary technology transforms how healthcare practices analyze and leverage call data, enabling them to elevate patient experiences, boost operational efficiencies, and unlock new revenue streams. 88% of practices say technology is crucial to delivering a great patient experience. In 2025, we will continue advancing AI-powered solutions to transform patient engagement and optimize complex practice operations. By automating workflows and enhancing communication, Weave is leading the way in intelligent, automated healthcare solutions, making our platform an essential tool for the modern healthcare practice. In summary, in 2024, we laid the foundation for expansion, achieving early success across multiple growth areas. In 2025, we will continue making disciplined, strategic investments where we see the greatest opportunity and a clear path to winning your business. medical vertical markets, mid-market, partnerships, payments, and AI. The traction we gained in 2024 reinforces our confidence that these investments will strengthen our market leadership and unlock new revenue streams. With a strong team, a clear vision, and proven ability to execute, Weave is well-positioned to accelerate growth and drive long-term success. Finally, Weave continues to earn recognition for our dedication to delivering exceptional customer experiences and the outstanding performance of our team and our platform. In G2's Winter 2025 report, Weave ranked first of 23 categories and was once again named the leader in the grid for patient relationship management. Weave was also selected as an Inc. Power Partner Award winner. We are committed to fostering an exceptional workplace, and Weave was named a Top Workplaces Culture Excellence winner in 2024 for innovation, employee appreciation, employee well-being, leadership, and compensation and benefits. In closing, I'm deeply proud of the Weave team's accomplishments over the past year. We achieved robust top-line growth, advanced profitability, and introduced groundbreaking products that address the evolving needs of our customers. These results highlight our unwavering focus on delivering value and driving innovation. As I sit here today, I am more confident in our opportunities and outcomes than I was just 12 months ago. A heartfelt thank you to our customers, partners, team members, and shareholders for their continued trust and support. Before I turn the call over, I'd like to take a moment to address the announcement we made earlier today. Our Chief Financial Officer, Alan Taylor, will be retiring at the end of this quarter. As part of a planned succession, Jason Christensen, Weave's Vice President of Finance, will be replacing Alan as Weave's new Chief Financial Officer and will join the executive team upon Alan's retirement. I would like to thank Alan for his significant contributions to the company. During his nine years at Weave, he built our finance function and guided Weave along the journey from startup to successful public company. I want to express my gratitude for his partnership and for his commitment to ensuring smooth transition before he embarks on his well-deserved retirement. I've had the privilege of working closely with Jason throughout his four-year tenure at Weave. His extensive experience in our business, understanding of our strategy, and deep insights into our customers make him the ideal successor. Having personally been and served as a CFO for over 20 years, I'm confident in Jason's ability to continue to scale Weave and drive continued growth and performance for many years to come. With that, I'll turn the call over to Adam.