Weave Communications Q1 Earnings Call Highlights

Weave topped Q1 guidance with total revenue of $65.5 million (up 17.4% YoY), saw gross profit rise to $47.9 million and gross margin improve to 73.2%, and delivered operating income of $2.5 million, driven by faster payments growth and record location additions.

Product and AI momentum is a key driver: more than 50% of locations now use embedded AI, AI interactions grew roughly 300% YoY, and an Omnichannel AI Receptionist (voice + text) is rolling out this quarter, while payments features and integrations continue to accelerate adoption.

Management raised full-year 2026 guidance to $275–278 million in revenue and $10.5–13.5 million in non-GAAP operating income, provided Q2 revenue guidance of $67.2–68.2 million, and said free cash flow should turn positive in H1 2026 after Q1’s negative $7.1 million.

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Weave Communications (NYSE:WEAV) reported first-quarter 2026 results that exceeded the high end of its guidance ranges, led by accelerating revenue growth, expanding gross margin, and improved operating profitability. Chief Executive Officer Brett White said the quarter marked the company’s “17th consecutive quarter of meeting or exceeding the high end of our revenue guidance.”

Q1 revenue growth accelerates and operating income improves

Chief Financial Officer Jason Christiansen said Weave generated $65.5 million in total revenue, an increase of 17.4% year over year. Christiansen attributed the acceleration to faster-growing payments revenue and record location additions, noting that payments “again grew more than twice the rate of total revenue.”

White said Weave added “the most locations ever in a quarter,” while Christiansen added the company posted more gross and net location additions than in any previous quarter, with specialty medical the largest contributor. In response to a question from Raymond James analyst Alex Sklar, White said performance was broad-based across verticals and sales motions, adding that dental was “quite strong” and that mid-market bookings were also solid.

On profitability, Christiansen said gross profit rose more than 19% to $47.9 million, and gross margin improved to 73.2%, up 110 basis points year over year. Operating income was $2.5 million, compared with breakeven in the prior-year period, and operating margin was 3.9%, an improvement of 380 basis points year over year.

Margin drivers include scale, payments mix, and AI-enabled support

Christiansen said gross margin improvement was driven by scale in customer support, efficiencies in cloud infrastructure and hardware device costs, and “the growing contribution of higher-margin payments revenue.” He also said customer support scaled in part because Weave is using AI “to deflect calls and effectively manage the caseload tied to a growing customer base.”

Subscription and payment processing gross margin was 78.4%, which Christiansen said reflected growth in the number of locations using payments, higher processing volume per location, and a higher net take on transactions. He said the company’s progress and mix shift “highlights a path” toward its long-term gross margin target of 75% to 80%.

Product focus centers on AI Receptionist and expanding workflows

White described Weave as purpose-built for healthcare, stating the company serves over 40,000 customer locations and that “billions of patient interactions” flow through its platform. He outlined how Weave’s tools span the patient journey, including scheduling and reminders, digital forms and insurance eligibility, payment processing and financing support, review management, and accounts receivable follow-up.

White said more than 50% of customer locations use at least one embedded AI solution, such as intelligent review responses and an “always-on messaging assistant.” He added that AI-powered add-on products include Call Intelligence, Insurance Eligibility, and AI Receptionist.

White said Weave handled over 300% more AI interactions than a year ago, driven by expanded AI features and increased customer adoption. He highlighted examples of Call Intelligence use cases and said one primary care practice saw its “unhappy call rate dropped by over 40% in just two months” after using the product for coaching, while a multi-location med spa reported a 100% retention rate among clients it followed up with based on flagged calls.

For AI Receptionist, White said the current text-based version can schedule appointments and answer common questions such as office hours and accepted insurance providers. He said Weave plans to release an Omnichannel AI Receptionist supporting voice and text “next week” for select integrations, with broader availability anticipated “late this quarter.” White said Weave plans to add more workflows over time, describing a roadmap of “hundreds of additional workflows.”

White also discussed early customer results from the AI Receptionist pilot, including one dental office where patients received cancellation-fee warnings from the AI agent and chose to keep appointments, and a Florida dental practice where missed calls dropped “roughly 80%,” with a similar decrease in weekend voicemails.

Payments momentum and integrations remain a key theme

In the Q&A, Christiansen said payments strength was driven by multiple product capabilities, including bulk collection, payment reminders and invoice follow-up, and surcharging. He said surcharging saw particularly strong adoption in Q1, calling it “a very strong quarter for us.”

Christiansen also pointed to payment integrations with practice management systems as an ongoing “unlock,” saying Weave is “still pretty early stages” with more integrations to come. He said the company expects these integrations to help streamline workflows and reduce days sales outstanding and accounts receivable balances. He added that AI Receptionist is expected to become part of that effort over time, including more proactive collection and front-end intake workflows.

Retention metrics, expense trends, and updated outlook

Christiansen said Weave’s dollar-based net revenue retention rate was 92% in Q1, while dollar-based gross revenue retention was 89%. He said the company believes its retention metrics “found the floor in Q1” as monthly retention rates “positively inflected” and were higher than the second half of 2025, while noting reported retention is a weighted average of the prior 12 months and can take multiple quarters to reflect improvements.

Operating expenses were 69% of revenue, which Christiansen said is seasonally higher in Q1 due to payroll tax limit resets and benefit renewals. He said general and administrative expense was $10.2 million, or 15.6% of revenue, and research and development expense was $8.6 million, or 13.1% of revenue. Sales and marketing expense totaled $26.6 million, or 40.6% of revenue, up year over year due to advertising and sales costs, with Q1 being seasonally higher because of events and post-holiday prospect re-engagement.

On cash flow, Christiansen said Weave ended the quarter with $72.7 million in cash and short-term investments, down $9 million sequentially. Cash used in operating activities was $5.7 million, and free cash flow was negative $7.1 million, which he attributed to seasonal disbursements such as annual bonus payouts and prepaid software renewals, plus $1.6 million of cash used for net settlement of vesting equity awards. He said the company expects free cash flow to be positive in the first half of 2026.

Looking ahead, Christiansen provided the following guidance:

Q2 2026 revenue: $67.2 million to $68.2 million

Q2 2026 operating income: $2.1 million to $3.1 million

Full-year 2026 revenue (raised): $275 million to $278 million

Full-year 2026 non-GAAP operating income (raised): $10.5 million to $13.5 million

Christiansen also said the weighted average share count is expected to be approximately 79.6 million shares in Q2 and approximately 79.8 million for the full year.

In closing remarks, White said the company is “well-positioned for success in the new AI frontier” and emphasized Weave’s focus on continued execution, product launches, and improving financial results while increasing value for customers.

About Weave Communications (NYSE:WEAV)

Weave Communications is a technology company that provides integrated communications and customer management solutions tailored for small- to medium-sized local businesses. Headquartered in Lehi, Utah, the company developed a cloud-based platform that unifies voice calling, business texting, appointment reminders and payment processing within a single interface.

The platform's core offerings include a unified business phone system, two-way texting, automated appointment and recall reminders, secure payment acceptance and a basic customer relationship management module.