Weave Communications Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 1, 2024

There are 10 speakers on the call.

Operator

Greetings, and welcome to the Weave First Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark McReynolds, Head of Investor Relations.

Operator

Thank you, Mark. You may begin.

Speaker 1

Thank you, Paul. Good afternoon, and welcome to Weave's Q1 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 until certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings.

Speaker 1

We disclaim any obligation to update or revise any forward looking statements. Further, on today's call, we will also discuss non GAAP metrics that we believe aid in the understanding of our financial results. Unless otherwise noted, all numbers that we talk about today will be on a non GAAP basis. 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 8 ks furnished with the SEC before this call, as well as in the earnings presentation on our Investor Relations website at investors. Gitweave.com.

Speaker 1

And with that, I'll turn the call over to Brett.

Operator

Thanks, Mark, and thank you

Speaker 2

to everyone for joining us today. I'm pleased to report that we had another terrific quarter providing a strong start to the year. At Weave, our aim is to deliver a better healthcare experience, every patient, every practice, every interaction. We specialize in an integrated customer experience and payments platform built specifically for small and medium sized healthcare practices. We empower practitioners to prioritize patient care, while we streamline office operations, handle payments processing, deliver practice growth through improved patient communication and engagement.

Speaker 2

SMBs are a cornerstone of the U. S. Business landscape. For the past 15 years, we've dedicated ourselves to developing a solution finely tuned to the unique requirements of SMB Healthcare Practitioners. Unlike larger healthcare institutions, dental clinics, veterinary hospitals, optometry and medical practices operate without dedicated IT teams relying instead on a user friendly software solution like Weave.

Speaker 2

Our platform streamlines disparate point solutions often utilized by these practitioners making it easier to attract, engage and retain patients. I'm excited to share some of the financial highlights from Q1. We started the year with solid top line performance, significant improvements in gross and operating margin and adjusted EBITDA. Revenue for Q1 was $47,200,000 representing a 19.2% year over year growth and $1,000,000 above the high end of the range we provided in February. This is our 9th consecutive quarter of exceeding the top end of our revenue guidance.

Speaker 2

We've went public. Our gross margin was approximately 57% and we set crossing the 70% mark as an important goal and milestone for our business. We are proud to report that in Q1 gross margin reached 70.4%, 280 basis points greater than Q1 last year, marking the 9th consecutive quarter of gross margin improvement. Additionally, our adjusted EBITDA margin is getting very close to breakeven, improving by over 700 basis points from last year to a negative 0 point 8% of revenue compared to a negative 7.9% of revenue a year ago. These results underscore the market's demand for our vertically tailored software and payments platform and our continued efforts to improve efficiency.

Speaker 2

In our February call, I shared our business focus areas for 2024 and I'd like to highlight some of our progress in the Q1. Accelerating revenue growth is a top priority with an emphasis on expanding our presence in dental, optometry and veterinary verticals and growing in specialty medical markets. We are pleased with the growth that we saw across all of these verticals in Q1 with Specialty Medical being our fastest growing segment. Partnerships are a vital contributor to growth across our target verticals. Authorized and certified integrations with partner practice management systems and other healthcare systems of record serve to both increase our addressable market and enhance our product market fit by automating and personalizing communications, which boost practice growth and efficiency.

Speaker 2

We aim to become our partners' top choice for patient engagement and communication, allowing Weave to enrich the patient experience and improve data synchronization. Our customers count on Weave to run their business operations and authorized integrations increase the reliability of their experience. We made great progress in both new and deepening integration partnerships and I'd like to highlight a few. In March, we delivered our initial integration with athenahealth, a leading provider of cloud based healthcare software for 160,000 physicians serving over 110,000,000 patients. We also signed an integration partnership with IDEXX, an industry leader that serves as the system of record for over 20% of the veterinary market.

Speaker 2

Scoping and development has commenced on our integration with 2 of their brands, EasyVet and Neo, whose veterinary software solutions service more than 8,000 veterinary hospitals. In addition to developing new integrations, we are successfully pursuing deeper product integrations and go to market programs with existing partners. We have renewed and enhanced our partnership with Doctor. Crono, a leading electronic health record provider serving tens of thousands of physicians and over 17,000,000 patients. We are deepening our existing integration and working closely to inform their large customer base of these enhancements.

Speaker 2

We also deepened our partnership with Patterson Veterinary, maker of Navator and Intra Vet Practice Information Management Systems that service over 3,000 veterinary hospitals. This partnership includes a commercial agreement enabling the Patterson sales team to recommend Weave as a preferred solution for client communication and engagement for animal hospitals and clinics. Lastly, we signed a product integration and commercial partnership with Prompt EMR, a leading electronic medical record provider for outpatient therapy clinics serving over 8,000 physical, occupational and speech therapists. Our customers' experience is the keystone to retention and Weave has consistently been awarded accolades affirming our platform's industry leading performance. Weave was once again recognized by G2 in their spring 2024 report reflecting our unwavering dedication to customer service.

Speaker 2

We have also been named a top 50 software product for small business for 2024 and is the leader in the G2 grid for patient relationship management. Moreover, we are honored to be recognized for our dedication to building an excellent workplace environment for our employees. For the 3rd consecutive year, we've received a Top Workplaces USA award. We've also been named to the 2024 Shatter List by the Women Tech Council. This important recognition acknowledges our commitment to our people and our future.

Speaker 2

In closing, I'm immensely proud of what we have accomplished in Q1, making a strong start to the year. We continue to grow our top line and hit a significant milestone effectively address our customers' needs. I'd like to effectively address our customers' needs. I'd like to extend a big thank you to our customers, partners, team members and shareholders for their continued support of Weave. With that, I'll turn the call over to Alan to provide more detailed financial results and review our outlook.

Speaker 2

Alan?

Speaker 3

Thanks, Brett. Good afternoon, everyone. Before providing my financial update, I'd like to address Q1 fluctuation in free cash flow. We successfully implemented a new billing system in Q1 that necessitated deferring March subscription billings into April. This resulted in a one time increase in our accounts receivable balance as of the end of March and a corresponding decrease in free cash flow of approximately $15,000,000 Since the vast majority of our billings are done via credit card, cash is received within a few days of billing and our accounts receivable balance will be back to normal levels in Q2.

Speaker 3

There will be an associated positive impact on Q2 cash free cash flow of approximately $15,000,000 Also as I mentioned last quarter, we paid out our 20 23 annual employee bonuses in Q1 of this year, which amounted to approximately $7,000,000 In prior years annual bonuses were paid out in Q2. Excluding the impact of both the delay in billing and the timing difference of the bonus payout, free cash flow would have been positive for Q1. Moving on to the financial update, We had a great quarter delivering 1st quarter revenue of $47,200,000 reflecting a 19.2% growth year over year. This represents a $1,500,000 or 3 percent beat over the midpoint of the range we provided in February. As we called out in our last earnings call, in 2023, our revenue growth rate benefited from an increase of onboarding revenues.

Speaker 3

Those revenues grew by 150% last year and a new agreement with Stripe early last year also increased our payments take rate. Both the improvement in onboarding revenue and the improvement in our take rate for payments remain in place for 2024, but we do not expect to see the same growth rate in these components of our revenue as last year as we did last year given that we lapped the impact of both improvements in Q1. Our net revenue retention rate increased from 95% last quarter to 96% in Q1. The improvement in Q1 NRR was primarily due to positive adoption of payments and software upsells. As I shared in our February call, we anticipate further NRR improvement in 2024.

Speaker 3

Our gross revenue retention rate remained at 92% for Q1 among the best in class for SMB retention and logo retention has been consistent for over 2 years. Transitioning to operating results, as a reminder, I will be referring to non GAAP results unless stated otherwise. Our Q1 results showed significant improvement across the board. Gross margin was 70.4%. This the Board.

Speaker 3

Gross margin was 70.4%. This represents a 280 basis point increase year over year. Payments continues to be the fastest growing component of our revenue and the average selling price for our subscription product has increased over the last past few quarters due to the uptake of our higher end product bundles. In addition, our engineering and operating teams are dedicated to delivering an outstanding customer experience, while also prioritizing efficiency and expanding our margins. In Q1, operating expenses were $34,600,000 a $3,900,000 increase from last year compared to a $7,600,000 increase in revenue for the same period.

Speaker 3

Our operating loss was $1,400,000 an improvement of $2,600,000 or 66 percent compared to last year and $600,000 better than the midpoint of the guidance that we gave in February. The corresponding operating loss margin of 2.9 percent is a significant improvement from the operating loss margin of 10.1% last year. Our net loss was $400,000 or weighted average shares outstanding. This is compared to a net loss of $3,300,000 or $0.05 per share last year. This represents a $2,900,000 improvement due to revenue acceleration and operating efficiencies.

Speaker 3

Adjusted EBITDA loss was $400,000 a $2,800,000 improvement year over year. Adjusted EBITDA loss margin of 0.8% is a significant improvement compared to the 7.9% loss margin reported a year ago. Turning now to our outlook for the Q2 and full year 2024. For the Q2 of 2024, we expect total revenue to be in the range of $48,200,000 to $49,200,000 and non GAAP operating loss to be in the range of $2,500,000 to $1,500,000 For the full year 2024, we are raising our full year outlook and expect total revenue to be in the range of $197,000,000 to $200,000,000 We expect the range for our full year 2024 non GAAP operating loss to be from $6,000,000 to $2,000,000 We expect to have weighted average share count of approximately 71,700,000 shares for the full year. To summarize, we've delivered solid results in Q1.

Speaker 3

Our performance demonstrates strong demand for our platform and we remain excited about the opportunity ahead and we will continue to drive our business to maximize that long term value. Operator, if you could turn it over for questions now, we'd appreciate it.

Operator

Thank you. We will now be conducting a question and answer session. Our first question is from Jacob Staphyl with Goldman Sachs. Please proceed with your question.

Speaker 4

Hey, guys. Thanks so much for the question and sounds like a really good quarter. So good to see that continued deliverance and outperformance. Just a quick one for me, especially around Specialty Medical. I think you called out strength there.

Speaker 4

So can you touch on maybe the sales cycles that you're seeing within Specialty Medical specifically given Weave maybe has a little bit more name brand recognition, a little bit more of a holistic platform, and a little bit more of a tenured sales force? And then to follow-up, can you give any update around hiring, given I believe that you mentioned last quarter intentions to continue hiring this year? So just any color around those would be great. Thank you so much.

Speaker 2

Sure. Hi, Jacob. I'll take it. This is Brett. So yes, specialty medical is quite fragmented.

Speaker 2

And so you know our number one vertical is dental. We're very good there. We've been there for a long time. Specialty medical is quite fragmented, but they have a really significant need for the solution that we offer. So our approach there has been to build the integrations with the platform, the PMS providers in those sub verticals we call them and then go into those markets with the reputation that we have in our dental optometry vet vertical and the result has been actually terrific.

Speaker 2

It's our fastest growing vertical. As I said in our call last time, it moved from number 4 to number 3. There's a real demand. Those businesses are doing well in the current economic environment and we've got good product market fit. So we're able to generate leads.

Speaker 2

The lead volume grew actually in Q1 versus Q4. We've got good demo set and close rates there and we've got good product market fit. So we're really just rolling out the playbook and taking it very methodically, very programmatically and it's working quite well. And then on hiring, yes, we will be hiring throughout the year. We expect to add sales capacity, probably some engineers and then other parts of the business just as our customer count grows.

Speaker 4

Awesome. Thanks so much guys.

Operator

Thank you. Our next question is from Brent Bracelin with Piper Sandler. Please proceed with your question.

Speaker 5

Hi, guys. This is Hannah on for Brent today. Thanks for taking my questions. Just the first one from me. In David's 1st full quarter as CRO, are there any learnings he's identified or any low hanging fruit he has gathered from observing and being a part of the organization?

Speaker 2

So I think we've got them on a 30, 60, 90 day plan and that's really progressing as expected. And I think as I mentioned last quarter, when David was on board, kind of every candidate for that job asked me, okay, what's broken? What do we need to fix? And the answer is nothing. The sales organization is functioning well, they're executing really well.

Speaker 2

And so David's real job is to how do we get to 500,000,000 to think ahead. He's very focused on payments. In fact, we've just hired a new payments leader who I think starts in the next couple of weeks. And then he's also very focused on partnerships. We're seeing a pretty interesting swing in our partnership landscape.

Speaker 2

I'd say a year ago or a year and a half ago, we was definitely of the mind like we'll just go it alone and some of the practice management platforms saw us as competition and that has changed pretty significantly and we're seeing much more interest from practice management vendors to partner with us in a win win way. So he's very focused on that and really focused on building out an organization that scales.

Speaker 5

Great. That's super helpful. And then on your next gen app, where are we in the process of early access rollout and what kind of feedback are you getting from your multi location customers on that platform?

Speaker 2

Great question. We're calling it the new Weave experience. And I think we talked about last call, we had a closed beta, when the number of customers were in the product. Now we've gone to an open beta. We've opened it up to more customers.

Speaker 2

And really it has 2 desired effects. 1 is, our current app is kind of like the size and shape of an old iPhone. And so it's really limited in the amount of real estate available to put in new features, new functionalities. So point 1 of the new experience is to give a flexible workspace, you can increase or decrease the size. Also, we've done a lot of work on the UX to make it more functionally rich and be able to achieve transactions or work steps in fewer steps.

Speaker 2

So that's kind of on the user side. And then on the multi side, really building it out to make it much more multi location friendly. So you can look at 1, for example, 1 email box or 10 email boxes at once. You can sort, you can message, you can do all sorts of things and you can pick and choose which locations you want to manage. So that's very useful.

Speaker 2

On the demo side, we are now demoing it for multi location opportunities and we've seen a lot of interest there. Also the other thing I should add is it's available both in an app and web browser. So kind of like Slack, you can either access it on the web browser or in a downloadable app. And we're seeing a lot of interest on the multi side. So we're going to it's going to take time to migrate certainly our existing customer base because a lot of them once they're working with something they like, they're not going to move off, no need to.

Speaker 2

But really the idea is to deliver this functionality and this new flexible user experience to multi location opportunities and the feedback there from existing customers and prospects is quite positive.

Speaker 3

Thank you. Our next question

Operator

is from Alex Sklar with Raymond James. Please proceed with your question. Great.

Speaker 6

Thank you. Maybe just follow-up on kind of those last two the theme of those last two questions, Brett. In terms of all the product and integration improvements over the last kind of 12 months, you highlighted a lot of those in the prepared remarks, but can you just help frame the magnitude or the size of the increase in terms of your integrated addressable market today relative to a year ago?

Speaker 2

Sure. So if you take round numbers, we look at our SAM, the market we're going at in dental, optometry and that call it around 200,000 locations. And we've got integrations now with over 90% of those locations. The really important thing to understand with an integration is there's several levels. We categorize them as level 1 through 5.

Speaker 2

And in dental optometry and vet, we've been going back and back and writing deeper and deeper integration. So something that was a year ago or 2 years ago, a level 1 integration, which was basically just reading contacts. Now we're able to deepen those integrations, make them much more powerful, having readwrite capabilities, payment capabilities. So even though we don't technically open at more locations, we make the product market fit much more robust with the ability to deepen the integration. So that's on the Dove side.

Speaker 2

And then on the next on the specialty medical verticals where we've really been focusing recently that's physical therapy, medical aesthetics, plastic, primary care. We think there's about 160,000 of those in the SAM and we're probably not even 1 third of the way there with integrations. So lots of opportunity there and we're just working through the list chipping away on the integrations and then the go to market plans. So we're making good progress, but we've got still lots of opportunity in front of us.

Speaker 6

Okay, great color there. And then Brett, maybe just a follow-up for you. In terms of kind of accelerating growth as a key priority, you said in the prepared remarks, I just want to talk about some of the lead gen motions. Events, I know, was a big kind of snapback last year in terms of kind of overall source of leads. But can you just talk about some of the processes or broader lead gen sources that you've seen the most success with in terms of growing pipeline here at the start of this year?

Speaker 2

Sure. So events for sure, special especially in Dove. We recently went to MedSpa event and really pretty significantly beat our expectations. So the opportunity, the interest, the demand is definitely there. Other areas we focus on are digital and a number of different digital marketing categories and actually just old school mailers work really, really well.

Speaker 2

And so being very focused on product market fit, we have very vertically focused digital marketing materials and the classic outbound calling off of leadless. So we're working both the inbound and the outbound side and seeing quite a bit of success on events, digital and then just kind of old school mailers.

Operator

Thank you. Our next question is from Parker Lane with Stifel. Please proceed with your question.

Speaker 7

Hey, guys. Thanks for taking the question this afternoon. Al, this one's for you. Congrats on the tremendous progress in gross margins since the IPO, I think 1300 basis points plus. What's the new milestone for you guys when you think about the potential for gross margins?

Speaker 7

And are there any new drivers aside from scale that can get us beyond this new level that you said?

Speaker 3

Yes. Thanks for the question. I appreciate it, Parker. Yes, we're thrilled with this progress. We know there's more to go.

Speaker 3

We've said that in the long term, a 75% to 80% gross margin company is where we think we can be. That's going to be a combination of things. Certainly as payments grows as a portion of our business that will improve our margins. We always are going to be focused on the cost elements of it. We're blessed with an engineering team that really understands this concept, while making sure that customers are taken care of and that blend is unique and hard to find sometimes, but our folks are great at it.

Speaker 3

And so they're making sure that efficiency is top of mind as we kind of scale in the cloud with GCP and just across the board in all of the ways that we scale the business and build the product out. So the up sells that we're looking at, the payments revenue on the revenue side are all going to improve our margin profile and we'll just be having unrelenting vigilance about costs to make sure that we get to where we want to go.

Speaker 7

Got it. That makes sense. And then Brett for you, wondering if you could give us a sense of how material the number of potential prospects or customers that have looked at your lack of integrations with the ones that you've just recently established and said, hey, maybe now is not the right time to buy Weave. Is there a large number of those? Or is this really just about driving customer success in your existing base of customers and bringing those integrations closer together?

Speaker 2

I would say so let me take the question in 2 pieces. 1 is deepening integrations in existing markets. And just the deeper the integration is, the stickier the product is. And so the more sticky it is and it's also perceived as delivering more value. So we can serve up more functionality in an existing implementation, the deeper the integration.

Speaker 2

So the more value we can prove to the customer, obviously increases the stickiness and then the value we can associate with our product. So deepening integrations just makes us much, much stickier and provides more value. And then new integrations, I mean one of the things we learned at events is when we roll into town and we talk about, oh, yes, we now have an integration with this vendor, we have integration with this vendor, we get a lot more attention. And so it's there it's a very fragmented market and being able to offer integrations really does open up additional SAM for us and we're seeing it in events, we're seeing it in our marketing materials, we're seeing it in our conversion rates.

Speaker 7

Got it. Appreciate the feedback here. Congrats, guys.

Speaker 2

Thank you.

Operator

Our next question is from Michael Funk with Bank of America.

Speaker 6

Great. Hi, guys. This is Matt on for Mike Funk. Appreciate the question. So my question is on NRR, great to see the inflection this quarter.

Speaker 6

What's a good upside scenario for NRR going forward? And how important is payments going to be as a lever and expanding that? And then as a quick follow-up, do you anticipate any evolution in the go to market motion, sales force structure or sales force compensation as some of these adjacent vertical scale and payments becomes a greater percentage of revenue? Thanks.

Speaker 3

Yes. So Matt, thanks for the question. As we've talked about the NRR that we report is a 12 month trailing metric. So to see this inflection point has been I mean, we've talked about it and we're delivering on it now. So we will see that bend upward.

Speaker 3

It will do so slowly, obviously, because of the nature of the metric, but payments are going to drive that. We've got upsell products in the pipeline that will continue to drive that. And then obviously just retaining our world class attrition rates, churn rates and retention rates are key to making sure that NRR stays healthy and moves up. So those are the things that are going to drive that. There's we continue to see increase in our ASP.

Speaker 3

We have we're delivering a ton of value as we move forward. So we're able to adjust price modestly and to and there's no pushback on that because of the quality and the value that's delivered in the product. So we anticipate that heading up and just because the nature of the metric, it won't be spike again up, but it will be a nice steady expansion on that NRR. With respect to the go to market, Brett can weigh in as well, but the one thing that I'm excited about is just on the partnership side. Partnership has always been an important piece, but it's been a smaller component of our go to market.

Speaker 3

And I really think that the team we've got assembled now is making headway there in ways we haven't seen before and signing up partnerships and opportunities that are going to both increase our integrations, as Brett was talking about, but also just with other partners, they'll be taking us to market and so stay tuned on that.

Speaker 2

Yes. And I'll just add, you know, we're learning creatures and we're going to adapt our go to market motions on our sales org so that everybody wins. So that the company wins, the customer wins, the sales team wins and we'll just keep tweaking and improving.

Operator

Thank you. Our next question is from Mark Schappel with Loop Capital Markets. Please proceed with your question.

Speaker 8

Hi, thank you for taking my question and congratulations on the quarter, especially on the gross margin line. Brett, just building on an earlier question around your payments business, I was wondering if you could just talk about the attach rates you're seeing for your payment solution and whether you're seeing any kind of a meaningful increase on that front?

Speaker 2

Hey, Mark. Thanks for the question. So payments attach rates, so we so to back out, in my opinion, we are way underpenetrated in our customer base. Payment attach rates have been increasing. We don't report the number, but it's way below where it needs to be.

Speaker 2

And it's really been around integrations and just not having a super focused high level exec focused entirely on payments. So we've made good progress on payment on the integrations. As I said, moving from a level 1 to a level 4 or 5 integration is a big deal, especially when it comes to integrating payments into the workflow. And as I also mentioned, we've hired a new general manager of payment starts in the next couple of weeks and increasing penetration rates will be a key goal of his. So they've been approving, but they're not where they need to be.

Speaker 8

Is in your sense is there a product component to this? I mean is there certain capabilities that still need to be built out into the platform before you see wider spread adoption?

Speaker 2

Yes, it's largely around workflow. So if you're running the front office of one of these businesses, you want to be able to process payments easily, quickly, efficiently within your daily workflow. And so building our product within their workflow, so it just fits right in there. They don't really care which payments provider they use. They just want to use the one that makes their lives the easiest.

Speaker 2

And so really working in to each businesses workflow, the Weave payment experience, I think is the key to product market fit. Part of that is the integration and part of that is just making sure we've got the right buttons and the right tools in the right process for folks running the front office. So it's just seamless and makes their lives easier. So that's a large part of it. And then it's just education.

Speaker 2

A lot of customers have capabilities that they just don't know about or haven't been taught how to use. And so education will be a big part of our push once our new GM is on board to kind of have the full featured solution integrated or that will fit easily into their workflow, educate them how to make it happen, educate them on how to transition from Thank you. That's helpful. And

Speaker 8

Thank you. That's helpful.

Operator

Thank you. Our next question is from Tyler Radke with Citi. Please proceed with your question.

Speaker 9

Yes. Hey, guys. Thanks for taking the question. I wanted to go back to the comments you made on the partnership side, particularly with some of the practice management software providers. Can you just talk about what you're doing from an incentives perspective to get those partnerships aligned?

Speaker 9

Are you kind of co selling credits? Are you hiring more partner specialists to get this going? Certainly sounds like a big opportunity, but just curious on the things that you're doing to drive those partnerships forward.

Speaker 2

Sure. Hey, Tyler. I think it really starts first at just the company philosophy. And we've made it very, very clear to our team that we're interested in win win partnerships. And we've hired, we've got Marcus Bertelsen, who's our now our Chief Operating Officer.

Speaker 2

He's hired a great Head of Strategic Partnerships who totally gets it, totally has a very keen sense on how to develop win win relationships with the different partners. So once you kind of as a company build that philosophy, then you can impart that philosophy on the potential partners, the PMS providers, so they don't see you as a competition. Their customers want these integrated with their product. So we just have to convince them that we're not a threat to their core business. We don't want to be in the PMS business.

Speaker 2

We just want to partner with them, so we can get a win win for their customer, works for them for Express. So that's number 1 is philosophy. We are working on different angles, some are integration agreements, some are integration agreements plus co marketing where they can sell our product. We're working on a number of different opportunities. We're working on arrangements where we partner on payments.

Speaker 2

So really just the big change I think is kind of getting partners comfortable that we don't want to be practice management software company and we really want to have a win win relationship. And that's I think and then we agree to it, we commit to it and then we actually demonstrate it. I think that's really what's moving the needle.

Speaker 9

Helpful. Thank you. And follow-up on the specialty medicals. Good to see the encouraging commentary there. Can you just remind us, I imagine it's still pretty small, but any way of sizing that revenue base today?

Speaker 9

And then as you're going into this specialty medical vertical, I guess is it fair to say that that might be slightly more discretionary in terms of consumer SMB spending than what you're seeing in kind of the core dental and veterinary or maybe it's less discretionary? And just any comments on what you're seeing macro environment, any changes across the customer base? Thank you.

Speaker 2

Sure. So on the sizing, historically our mix of business has been dental, opto, vet and specialty medical and we've always said that dental is just north of 50%. And we've now switched orders and now we're dental, optometry, specialty medical and then vet. So that gives you a little bit of an idea of the size, but we haven't reported revenue mix. It is our Specialty Medical is our fastest growing segment in ARR.

Speaker 2

And then as far as discretionary versus subject to economic trends, the 4 where we're really focused, physical therapy, medical aesthetics, plastic surgery, primary care. I think physical therapy and primary care are not discretionary. If you need the services, you go and get them. Medical aesthetics and plastic surgery, you could argue we're early in this space. We don't have years of data to look at here and see how trends move, but those businesses are very successful and they're doing well and then they're choosing Weave.

Speaker 2

So that's terrific.

Speaker 9

Thank you.

Operator

Thank you. There are no further questions at this time. I'd like to hand the floor over to Brett White for any closing comments.

Speaker 2

Okay. Well, thank you again everyone for your continued support and thank you to the Weave team for delivering yet another terrific quarter.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Powered by Quartr
Earnings Conference Call
Weave Communications Q1 2024
00:00 / 00:00