Weave Communications’ 2026 Q2 Earnings Call: Sales Disruption Tied to Internal Transition, Growth Linked to Past Sales, Not Broad Demand

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $67.5M, 15.5% growth over last year
• Gross Margin: 72.6%, representing a year-over-year improvement of 30 basis points
• Operating Margin: 4.7%, a 460 basis point improvement over the prior year

Guidance:

• Full year 2026 total revenue expected in the range of $273M to $275M.
• Full year 2026 non-GAAP operating income guidance raised to an expected range of $12M to $14M.
• Q3 2026 total revenue expected in the range of $68.6M to $69.6M.
• Q3 2026 operating income expected in the range of $3M to $4M.

Business Commentary:

Revenue Growth and Payments Performance:

• Weave reported total revenue of $67.5 million for Q2 2026, representing 15.5% year-over-year growth, with payments growing at roughly double that rate.
• The growth was driven by increased payments volume and a record number of new locations added, particularly in the dental segment.

Operating Profitability and Margin Expansion:

• The company's operating margin expanded to almost 5%, up sharply from roughly break-even in the same quarter last year.
• This improvement was attributed to significant progress in optimizing the go-to-market motion and reducing sales and marketing expenses as a percentage of revenue.

Go-to-Market Strategy and Sales Efficiency:

• Weave's sales and marketing expenses as a percentage of revenue decreased by 240 basis points sequentially.
• The company implemented changes such as verticalizing the inbound sales function and introducing an SDR model to improve sales efficiency and focus on higher-quality lead conversion.

Specialty Medical Integration and Growth:

• Weave achieved a deeper integration with the AthenaOne platform, joining Athena Health's marketplace and reaching more than 160,000 specialty medical providers.
• This integration is expected to improve revenue opportunity, retention rates, and average revenue per account (ARP) in the specialty medical vertical.

AI-Powered Product Adoption and Impact:

• Custom AI interactions on Weave's platform totaled 70 million, increasing by 165% compared to last year.
• The adoption of AI-powered products like the AI receptionist and Call Intelligence has enhanced customer engagement, reduced staffing costs, and improved revenue collection efficiency.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed confidence in the long-term position and results, highlighting 'strong results,' 'record number of new locations,' and 'early indications from these changes are very positive.' The tone was optimistic about market demand and the impact of AI products, stating 'I'm super optimistic about our future.'

Q&A:

• Question from Alex Sklar (Raymond James): Can you help reconcile the comments about record growth and net locations with the go-to-market disruption and lower growth outlook?
  Response: The revenue shortfall is attributed to challenges in lead distribution during the sales transition from May to July, with demand remaining strong; the impact will flow through the back half of the year.

• Question from Alex Sklar (Raymond James): Any color on linearity since the go-to-market changes and the relative size of the sales/marketing team?
  Response: Verticalizing inbound sales showed positive results; the outbound transition was accelerated to August, with the team now smaller but more efficient, focusing top sellers on demoing and closing.

• Question from Alex Sklar (Raymond James): Can you talk about the opportunity within specialty medical and the impact of the Athena Health integration?
  Response: Deeper integrations improve unit economics (ASP, retention, CAC); the level one to four integration with Athena Health is a significant step, increasing the revenue opportunity in that vertical.

• Question from Hannah Rudolph (Piper Sandler): How confident do you feel in the revised guidance and what assumptions are embedded regarding bookings and demand?
  Response: Confidence is based on the accelerated go-to-market changes, with expectations to return to normal execution within a couple of months; no slackening in demand is observed, and industry need for solutions remains strong.

• Question from Parker Lane (Stiefel): What drove the most dental locations in eight quarters and how sustainable are the trends?
  Response: Attributed to verticalizing the inbound sales force and marketing changes, focusing on industry-specific pain points; the long-term outlook remains positive, with this seen as a ripple, not a trend change.

• Question from Mark Schappel (Loop Capital Markets): How is AI engagement growth translating into financial results?
  Response: AI products are monetized through additional pricing or upsells, increase platform stickiness, ease sales, and drive higher ARPU and LTV; they also enhance payments workflows, contributing to accelerating payments volume growth.

Contradiction Point 1

Impact and Duration of Sales Transition Disruption

Contradiction on whether demand softened or the issue was purely internal, affecting the understanding of the disruption's cause and its financial impact.

Hannah Rudolph (Piper Sandler) - Hannah Rudolph (Piper Sandler)

2026Q2: No changes in the demand environment have been seen. The sales hiccup was purely an internal transition issue, not demand-related. - Brett White(CEO)

Have there been changes in sales cycles or budget scrutiny due to economic conditions? - Alex Sklar (Raymond James)

2026Q2: Strong location growth in Q1/Q2 was driven by prior sales. The May–July period saw booking shortfalls due to sales transition challenges, despite high demand. - Jason Christensen(CFO)

Contradiction Point 2

Performance and Structure of the Sales Team Post-Transition

Contradiction on whether the sales team is "smaller" or remains the same size post-restructuring, impacting perceptions of the company's go-to-market capabilities.

Alex Sklar (Raymond James) - Alex Sklar (Raymond James)

2026Q2: The overall team is smaller, with some former sellers transitioning to SDR roles, leading to quicker ramp times. - Brett White(CEO)

Can you provide color on linearity since the go-to-market changes, including whether the slight improvement in Q4 guidance is due to early improvements, and an update on the sales/marketing team size and structure? - Alex Sklar (Raymond James)

2026Q2: The sales team is now smaller but more efficient, with former sellers transitioning into SDR roles. - Brett White(CEO)

Contradiction Point 3

AI Product Contribution to Growth and Sales

Contradicts the Q1 claim that AI was not a primary sales driver, raising questions about the role of new products in recent performance.

Alex Sklar (Raymond James) - Alex Sklar (Raymond James)

2026Q2: Verticalizing the inbound sales team... has already shown positive results, especially in dental. - Brett White(CEO)

Can you provide color on linearity since the go-to-market changes, explain the slight improvement in Q4 guidance, and give an update on the sales/marketing team size and structure? - John McShane (Stifel, Nicolaus & Company, Incorporated) [on behalf of Parker Lane]

2026Q1: The majority of Q1 sales were on existing core products, not future AI roadmaps, due to the SMB sales model. - Brett White(CEO)

Contradiction Point 4

Primary Drivers of Strong Location Growth

Contradicts the Q1 statement that growth was broad-based and consistent, suggesting recent growth was reliant on past sales.

What are the key financial highlights for the quarter? - Alex Sklar (Raymond James)

2026Q2: Strong location growth in Q1/Q2 was driven by prior sales. The sales transition... caused booking shortfalls... - Jason Christensen(CFO)

How do record growth, net locations, payments growing twice as fast as core subscription, and go-to-market disruption reconcile with the lower growth outlook? - Alexander Sklar (Raymond James & Associates, Inc.)

2026Q1: The strong performance was broad-based across all verticals (medical, dental) and motions... The average revenue per location... remained consistent with recent quarters... - Brett White and Jason Christiansen