Weave Communications, Inc.

Previous wording

We have democratized powerful communication and engagement capabilities previously only available to enterprises, made them intuitive and easy to use and put them in one solution. Our verticalized software platform streamlines the day-to-day operations of running a small and medium-sized business (“SMB”) healthcare practice. Instead of a fragmented set of tools, Weave offers an AI-powered solution that spans all forms of communication and engagement including physical and softphones, messaging, email marketing, insurance verification, online appointment scheduling, reviews, payments, digital forms, and more. Through authorized and supported integrations with leading practice management systems (“PMS”), we automate and personalize patient communications while embedding FinTech solutions—such as text-to-pay, online bill pay, and payment plans—directly into communication workflows. By streamlining payment processes, Weave accelerates collections, reduces write-offs, and improves practice profitability.

Current wording

We have democratized powerful communication and engagement capabilities previously only available to enterprises, made them intuitive and easy to use and put them in one solution. Our verticalized software platform streamlines the day-to-day operations of running a small and medium-sized business (“SMB”) healthcare practice. Instead of a fragmented set of tools, Weave offers an AI-powered solution that spans all forms of communication and engagement including physical and softphones, messaging, email marketing, insurance verification, online appointment scheduling, reviews, payments, digital forms, and more. Through authorized and supported integrations with leading practice management systems (“PMS”) and electronic health or medical record systems (“EHR”), we automate and personalize patient communications while embedding FinTech solutions—such as text-to-pay, online bill pay, and payment plans—directly into communication workflows. By streamlining payment processes, Weave accelerates collections, reduces write-offs, and improves practice profitability.

Previous wording

We generate revenue primarily from recurring subscription fees charged to access our platform, which also include recurring phone hardware fees. These recurring revenues accounted for 91% and 93% of our revenue the three months ended March 31, 2025 and 2024, respectively. In addition, we provide recurring payment processing services through Weave Payments and derive revenue from transactions between our customers that utilize Weave Payments and their end consumers.

Current wording

We generate revenue primarily from recurring subscription fees charged to access our platform, which also include recurring phone hardware fees. These recurring revenues accounted for 91% and 91% of our revenue the three months ended June 30, 2025 and 2024, respectively, and 91% and 92% for the six months ended June 30, 2025 and 2024, respectively. In addition, we provide recurring payment processing services through Weave Payments and derive revenue from transactions between our customers that utilize Weave Payments and their end consumers.

Previous wording

(“PMS”), which strengthens our product market fit and increases the value our platform provides to customers, and the growth of the market for a customer experience and payments software platform. Sustaining our growth requires continued adoption of our platform by new customers. We aim to add new customers through a combination of unpaid channels, such as recommendations and word of mouth, and paid channels, such as digital marketing, direct mail, trade shows and industry events, brand marketing and our teams of sales representatives. Historically, our go-to-market strategy focused on increasing the number of locations with most of our customers having a single location.

Current wording

Our ability to attract new customers is dependent upon a number of factors, including the effectiveness of our pricing and products, the sum total of the features and pricing of the alternative point solution patchwork, the effectiveness of our marketing efforts, the effectiveness of our channel partners in selling and marketing our platform, our ability to integrate our platform with PMS and EHRs, which strengthens our product market fit and increases the value our platform provides to customers, and the growth of the market for a customer experience and payments software platform. Sustaining our growth requires continued adoption of our platform by new customers. We aim to add new customers through a combination of unpaid channels, such as recommendations and word of mouth, and paid channels, such as digital marketing, direct mail, trade shows and industry events, brand marketing and our teams of sales representatives. Historically, our go-to-market strategy focused on increasing the number of locations with most of our customers having a single location.

Previous wording

In addition to pursuing continued customer growth among small businesses, we intend to pursue opportunities to expand our customer base among medium-sized businesses, with a particular focus on our core specialty healthcare verticals. Our ability to expand among medium-sized businesses will depend upon our ability to successfully sell our enhanced Weave platform to multi-location organizations and effectively retain them.

Current wording

In addition to pursuing continued customer growth among small businesses, we intend to pursue opportunities to expand our customer base among medium-sized businesses, with a particular focus on our core specialty healthcare verticals. Our ability to expand among medium-sized businesses will depend upon our ability to successfully sell our enhanced Weave platform to multi-location organizations and effectively retain them. In May 2025, we completed the acquisition of Vidurama, Inc. ("TrueLark”), which is an AI-powered workflow automation platform that enables 24/7 online scheduling, missed call response, and marketing lead conversion. Historically, TrueLark has been sold predominately to multi-location small and medium-sized businesses. This solution is complimentary to Weave and may be sold independently. TrueLark provides an additional opportunity for Weave to expand our customer based among medium-sized businesses.

Previous wording

Our ability to retain and increase revenue within our existing customer base is dependent upon a number of factors, including customer satisfaction with our platform and support, the sum total of the features and pricing of the alternative point solution patchwork, our ability to effectively enhance our platform by developing new applications and features and addressing additional use cases, and our ability to leverage and scale our core sales efforts and marketing capabilities to increase our penetration into our core specialty healthcare verticals. The deployment of the Weave phone system as part of the platform at each of our customers improves retention and customer loyalty. Historically, our subscriptions have provided our new customers with immediate access to the majority of our products and functionality. However, we have released additional add-on products in recent years, such as Bulk Texting and Forms, which we are increasingly successful at cross-selling to our customer base. We intend to continue to invest in enhancing awareness of our platform, creating additional use cases, and developing more products, features and functionality.

Current wording

Our ability to retain and increase revenue within our existing customer base is dependent upon a number of factors, including customer satisfaction with our platform and support, the sum total of the features and pricing of the alternative point solution patchwork, our ability to effectively enhance our platform by developing new applications and features and addressing additional use cases, and our ability to leverage and scale our core sales efforts and marketing capabilities to increase our penetration into our core specialty healthcare verticals. The deployment of the Weave phone system as part of the platform at each of our customers improves retention and customer loyalty. Historically, our subscriptions have provided our new customers with immediate access to the majority of our products and functionality. However, we have released additional add-on products in recent years, such as Bulk Texting, Forms and Call Intelligence, which we are increasingly successful at cross-selling to our customer base. We intend to continue to invest in enhancing awareness of our platform, creating additional use cases, and developing more products, features and functionality.

Previous wording

Customer retention also impacts our future financial performance given its potential to drive improved gross margin. The initial onboarding costs as well as the cost of phone hardware, which is depreciated over three years, represent substantial cost of revenue elements during the first few years of a customer’s life. We believe our disaggregated revenue and cost of revenue financial data, particularly our subscription and payment processing gross margin, provide insight into the impact of customer retention on overall gross margin improvement. Our subscription and payment processing gross margin was 77% for each of the three months ended March 31, 2025 and 2024.

Current wording

Customer retention also impacts our future financial performance given its potential to drive improved gross margin. The initial onboarding costs as well as the cost of phone hardware, which is depreciated over three years, represent substantial cost of revenue elements during the first few years of a customer’s life. We believe our disaggregated revenue and cost of revenue financial data, particularly our subscription and payment processing gross margin, provide insight into the impact of customer retention on overall gross margin improvement. Our subscription and payment processing gross margin was 78% for each of the three months ended June 30, 2025 and 2024, respectively, and 77% for each of the six months ended June 30, 2025 and 2024.

Previous wording

We continue to add new products and functionality to our platform, broadening our use cases and applicability for different customers. In 2024, we introduced our enhanced Weave platform and Weave Enterprise, which together bring an enhanced interface and experience for both single- and multi-location customers. Our ability to cohesively deliver a deep product suite with as little friction as possible to customers is a key determinant of winning new customers. Our ability to add new SMB customers is dependent on the features and functionality we add to our platform, including those enabled by AI, particularly in our core specialty healthcare verticals. The depth of our platform’s functionality is dependent upon both our internally-developed technology and our platform partnerships and integrations.

Current wording

We continue to add new products and functionality to our platform, broadening our use cases and applicability for different customers. In 2024, we introduced our enhanced Weave platform and Weave Enterprise, which together bring an enhanced interface and experience for both single- and multi-location customers. Our ability to cohesively deliver a deep product suite with as little friction as possible to customers is a key determinant of winning new customers. Our ability to add new SMB customers is dependent on the features and functionality we add to our platform, including those enabled by AI, particularly in our core specialty healthcare verticals. The depth of our platform’s functionality is dependent upon both our internally-developed technology and our platform partnerships and integrations. We expect our future success in winning new clients to be partially driven by our ability to continue to develop and deliver new, innovative products to SMBs in a timely manner.

Previous wording

We generate revenue primarily from recurring subscription fees charged to access our software and phone services platform, and recurring embedded lease revenue on phone hardware provided to customers. The majority of these subscription arrangements have contractual month-to-month terms, with a small minority portion having contractual terms of 1-3 years. Subscription and phone hardware fees are prepaid and customers may elect to be billed monthly or annually, with the majority of our revenue coming from those that elect to be billed monthly. To incentivize annual payments, we may offer pricing concessions that apply ratably over the twelve-month subscription plan. As of March 31, 2025 and 2024, approximately 33% and 40% of customer locations elected annual prepayments, respectively. Subscription revenue is recognized ratably over the term of the subscription agreement. Amounts billed in excess of revenue recognized are reported in deferred revenue on the Company’s condensed consolidated balance sheets.

Current wording

We generate revenue primarily from recurring subscription fees charged to access our software and phone services platform, and recurring embedded lease revenue on phone hardware provided to customers. The majority of these subscription arrangements have contractual month-to-month terms, with a small minority portion having contractual terms of 1-3 years. Subscription and phone hardware fees are prepaid and customers may elect to be billed monthly or annually, with the majority of our revenue coming from those that elect to be billed monthly. To incentivize annual payments, we may offer pricing concessions that apply ratably over the twelve-month subscription plan. As of June 30, 2025 and 2024, approximately 31% and 40% of customer locations elected annual prepayments, respectively. Subscription revenue is recognized ratably over the term of the subscription agreement. Amounts billed in excess of revenue recognized are reported in deferred revenue on the Company’s condensed consolidated balance sheets.

Previous wording

Cost of revenue consists of costs related to providing our platform to customers and costs to support our customers. Direct costs associated with providing our platform include data center and cloud infrastructure costs, payment processing costs, amortization of finance lease right-of-use assets on phone hardware provided to customers, fees and revenue shares to application providers, voice connectivity and messaging fees, and amortization of internal-use software development costs. Indirect costs include personnel-related expenses, such as salaries, benefits, bonuses and stock-based compensation expense, of our onboarding and customer support staff. Cost of revenue also includes an allocation of overhead costs for facilities and shared IT-related expenses, including depreciation expense.

Current wording

Cost of revenue consists of costs related to providing our platform to customers and costs to support our customers. Direct costs associated with providing our platform include data center and cloud infrastructure costs, payment processing costs, amortization of finance lease right-of-use assets on phone hardware provided to customers, fees and revenue shares to application providers, voice connectivity and messaging fees, and amortization of internal-use software development costs and acquired technology. Indirect costs include personnel-related expenses, such as salaries, benefits, bonuses and stock-based compensation expense, of our onboarding and customer support staff. Cost of revenue also includes an allocation of overhead costs for facilities and shared IT-related expenses, including depreciation expense. Our acquired technology is measured at its estimated fair value and amortized over its estimated useful life, which is five years.

Previous wording

Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing staff, including salaries, benefits, sales commissions, bonuses and stock-based compensation. Sales commissions paid on new subscriptions to our software, phone, and payments services are deferred and amortized over the expected period of benefit, which is determined to be three years. In addition to personnel-related expenses, marketing expenses consist of lead-generating and other advertising activities, as well as the cost of traveling to and attending trade shows.

Current wording

Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing staff, including salaries, benefits, sales commissions, bonuses and stock-based compensation. Sales commissions paid on new subscriptions to our software, phone, and payments services are deferred and amortized over the expected period of benefit, which is determined to be three years. In addition to personnel-related expenses, marketing expenses consist of lead-generating and other advertising activities, as well as the cost of traveling to and attending trade shows. Sales and marketing expenses also include acquisition-related amortization expenses. Our acquired customer relationships and trade names are measured at their fair values and amortized over their estimated useful lives, which are seven years.

Previous wording

We expect that our research and development expenses will increase as our business grows, particularly as we incur additional costs related to continued investments in our platform and products. However, we expect that our research and development expenses will remain fairly consistent as a percentage of our revenue over time. In addition, research and development expenses that qualify as internal-use software development costs are capitalized and the amount capitalized may fluctuate significantly from period to period.

Current wording

We expect that our research and development expenses will increase as our business grows, particularly as we incur additional costs related to continued investments in our platform and products. However, we expect that our research and development expenses will remain consistent as a percentage of our revenue over time, although there may be fluctuations from period to period. In addition, research and development expenses that qualify as internal-use software development costs are capitalized and the amount capitalized may fluctuate significantly from period to period.

Previous wording

Provision for income taxes consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business. Because of the uncertainty of the realization of the deferred tax assets, we have a full valuation allowance for domestic net deferred tax assets, including net operating loss carryforwards.

Current wording

Provision for income taxes consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business. Historically, our U.S. operations have generated taxable losses, and as a result, we have maintained a full valuation allowance against our domestic net deferred tax assets, including, net operating loss carryforwards.

Previous wording

In addition to our financial information that is presented in accordance with the generally accepted accounting principles in the U.S. (“U.S. GAAP”), we review several operating and financial metrics, including the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.

Current wording

In addition to our financial information that is presented in accordance with the generally accepted accounting principles in the U.S. (“U.S. GAAP”), we review several operating and financial metrics, including the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. These metrics exclude the impact of TrueLark subsequent to acquisition.

Previous wording

We believe our dollar-based net retention rate (“NRR”) provides insight into our ability to retain and grow revenue from our customer locations, as well as their potential long-term value to us. For retention rate calculations, we use adjusted monthly revenue (“AMR”), which is calculated for each location as the sum of (i) the subscription component of revenue for each month and (ii) the average of the trailing-three-month recurring payments revenue. Since payments revenue represents the revenue we recognize on payment processing volume, which is reported net of transaction processing fees, we believe the three-month average appropriately adjusts for short-term fluctuations in transaction volume. To calculate our NRR, we first identify the cohort of locations, or the Base Locations, that were active in a particular month, or the Base Month. We then divide AMR for the Base Locations in the same month of the subsequent year, or the Comparison Month, by AMR in the Base Month to derive a monthly NRR. AMR in the Comparison Month includes the impact of any churn, revenue contraction, revenue expansion, and pricing changes, and by definition does not include any new customer locations under subscription added between the Base Month and Comparison Month. We derive our annual NRR as of any date by taking a weighted average of the monthly net retention rates over the trailing twelve months prior to such date.

Current wording

NRR, we first identify the cohort of locations, or the Base Locations, that were active in a particular month, or the Base Month. We then divide AMR for the Base Locations in the same month of the subsequent year, or the Comparison Month, by AMR in the Base Month to derive a monthly NRR. AMR in the Comparison Month includes the impact of any churn, revenue contraction, revenue expansion, and pricing changes, and by definition does not include any new customer locations under subscription added between the Base Month and Comparison Month. We derive our annual NRR as of any date by taking a weighted average of the monthly net retention rates over the trailing twelve months prior to such date.

Previous wording

The increase in cost of revenue was due primarily to an increase of $1.3 million in direct costs to support customer usage and growth of our customer base, including cloud infrastructure costs, fees paid to application providers, and connectivity and messaging costs. In addition, there was an increase of $0.4 million in personnel-related costs, particularly related to merit increases and new hires.

Current wording

The increase in cost of revenue was due primarily to an increase of $1.3 million in direct costs to support customer usage and growth of our customer base, including cloud infrastructure costs, fees paid to application providers, and connectivity and messaging costs. In addition, there was an increase of $0.5 million in personnel-related costs, particularly related to merit increases and new hires, an increase of $0.1 million in computer and office supplies, and and increase of $0.1 million related to the amortization of acquisition-related intangible assets.

Previous wording

The increase in sales and marketing expenses was attributable in part to an increase of $2.1 million in personnel-related expenses, driven largely by salary and commission plan adjustments, as well as increased average headcount, which caused approximately $1.4 million of the increase. The remaining $0.7 million increase of personnel-related expenses was related to stock-based compensation related to grants for new and existing employees and executives. We also increased demand generation expenses by $1.5 million, particularly with our digital media, partner marketing, and third-party advertisement efforts.

Current wording

The increase in sales and marketing expenses was attributable in part to an increase of $2.4 million in personnel-related expenses, driven largely by salary and commission plan adjustments and increased average headcount, which together caused approximately $2.1 million of the increase. The remaining $0.3 million increase of personnel-related expenses was due to stock-based compensation for grants to new and existing employees and executives. We also increased demand generation expenses by $0.8 million, particularly with our digital media, partner marketing, and influencer marketing efforts. In addition, we incurred a $0.2 million increase in overhead allocation due to an increase in headcount.

Previous wording

The increase in research and development expenses was due to an increase of $1.4 million in personnel-related expenses, largely from increased salary expenses of $0.9 million due to increased headcount and salary increases, and additional stock-based compensation expense of $0.5 million related to grants for new and existing employees. We also incurred $0.1 million of additional expenses in dues and subscriptions costs.

Current wording

The increase in research and development expenses was due to an increase of $2.0 million in personnel-related expenses, largely from increased salary expenses of $1.1 million due to increased headcount and salary increases, and additional stock-based compensation expense of $0.9 million related to grants to new and existing employees.

Previous wording

The increase in general and administrative expenses was primarily due to a $2.0 million increase in personnel-related expenses, particularly from increased salary expenses of $1.0 million due to increased headcount and salary increases for existing employees, and increased stock-based compensation expense of $1.0 million related to grants for new and existing employees. We also experienced an increase of $0.7 million related to professional services fees, approximately $0.4 million of which were incurred in connection with the pending acquisition of TrueLark.

Current wording

The increase in general and administrative expenses was primarily due to a $0.8 million increase in personnel-related expenses, particularly from increased salary expenses of $0.9 million due to increased headcount and salary increases for existing employees, offset by decreased stock-based compensation expense of $0.1 million related to the vesting of previously-granted awards. We also experienced an increase of $0.7 million related to professional services fees, approximately $0.5 million of which were incurred in connection with the acquisition of TrueLark. Finally, we experienced an increase in office supplies expense of approximately $0.1 million, which was offset by a decrease of bad debt expense of approximately $0.3 million.

Previous wording

The increase in interest income is due to an increase in interest generated on our money market securities as a result of higher average daily cash and cash equivalent balances over the period. The decrease in other income (expense), net is largely due to realized losses on our short-term investments and, to a lesser extent, a decrease in average interest rates over the period which contributed to the decrease in other income.

Current wording

The decrease in other income (expense), net is largely due to decreased realized gains on our short-term investments due to a lower average daily balance over the period, as a result of assets used to fund the TrueLark acquisition, and, to a lesser extent, a decrease in average interest rates over the period.

Previous wording

Revenue increased by $8.6 million, or 18%, compared to the three months ended March 31, 2024. Of the total increase, approximately $7.6 million, or 88%, was attributable to new customer locations acquired during the 12 months subsequent to March 31, 2024. Approximately $1.0 million, or 12%, of the increase was attributable to existing customer locations under subscription as of March 31, 2024.

Current wording

Revenue increased by $16,520, or 17%, compared to the three months ended June 30, 2025. Of the total increase, approximately $13.5 million, or 82%, was attributable to new customer locations acquired during the 12 months subsequent to June 30, 2024. Approximately $3.0 million, or 18%, of the increase was attributable to existing customer locations under subscription as of June 30, 2024.

Previous wording

We define EBITDA as earnings before interest expense, interest income, other income/expense, provision for income taxes, depreciation, and amortization. Our depreciation adjustment includes depreciation on operating fixed assets and we do not adjust for amortization of finance lease right-of-use assets on phone hardware provided to our customers. Our amortization adjustment includes the amortization of capitalized costs from both internal-use software development and cloud computing arrangements. We further adjust EBITDA to exclude stock-based compensation expense, a non-cash item, and acquisition transaction costs, which we believe are not reflective of ongoing results of operations in the period incurred and not directly related to the operation of our business. Acquisition transaction costs include legal and accounting professional services costs incurred during the period as a result of our acquisition activities. We believe that Adjusted EBITDA provides management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations. Additionally, management uses Adjusted EBITDA to measure our financial and operational performance and prepare our budgets.

Current wording

We define EBITDA as earnings before interest expense, interest income, other income/expense, income tax benefit (expense), depreciation, and amortization. Our depreciation adjustment includes depreciation on operating fixed assets and we do not adjust for amortization of finance lease right-of-use assets on phone hardware provided to our customers. Our amortization adjustment includes the amortization of capitalized costs from both internal-use software development and cloud computing arrangements. We further adjust EBITDA to exclude stock-based compensation expense, a non-cash item, acquisition transaction costs, which we believe are not reflective of ongoing results of operations in the period incurred and not directly related to the operation of our business, and amortization of acquisition-related intangible assets. Although we exclude the amortization of acquisition-related intangible assets from the non-GAAP measure, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. We believe that Adjusted EBITDA provides management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations. Additionally, management uses Adjusted EBITDA to measure our financial and operational performance and prepare our budgets.

Previous wording

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under U.S. GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under U.S. GAAP. For example, the non-GAAP financial information presented above may be determined or calculated differently by other companies and may not be directly comparable to that of other companies. In addition, free cash flow does not reflect our future contractual commitments and the total increase or decrease of our cash balance for a given period. Further, Adjusted EBITDA excludes some costs, namely, non-cash stock-based compensation expense and acquisition transaction costs.

Current wording

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under U.S. GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under U.S. GAAP. For example, the non-GAAP financial information presented above may be determined or calculated differently by other companies and may not be directly comparable to that of other companies. In addition, free cash flow does not reflect our future contractual commitments and the total increase or decrease of our cash balance for a given period. Further, Adjusted EBITDA excludes some costs, namely, non-cash stock-based compensation expense, acquisition transaction costs, and amortization of acquisition-related intangible assets. Therefore, Adjusted EBITDA does not reflect the non-cash impact of stock-based compensation expense or working capital needs that will continue for the foreseeable future. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures and to not rely on any single financial measure to evaluate our business.

Previous wording

Since inception, we have financed our operations primarily through cash generated from the sale of subscriptions to our platform, and the net proceeds received from issuances of our equity securities. We have generated losses from our operations as reflected in our accumulated deficit of $299.8 million as of March 31, 2025 and generally have generated negative cash flows from operations. Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support customer usage and growth in our customer base, and increased research and development expenses to support the growth of our business and related infrastructure. We expect our operating cash flows to further improve as we increase our operational efficiency and experience economies of scale.

Current wording

Since inception, we have financed our operations primarily through cash generated from the sale of subscriptions to our platform, and the net proceeds received from issuances of our equity securities. We have generated losses from our operations as reflected in our accumulated deficit of $308.5 million as of June 30, 2025 and generally have generated negative cash flows from operations. Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support customer usage and growth in our customer base, and increased research and development expenses to support the growth of our business and related infrastructure. We expect our operating cash flows to further improve as we increase our operational efficiency and experience economies of scale.

Previous wording

As of March 31, 2025, our principal sources of liquidity were cash held as deposits in financial institutions and cash equivalents consisting of highly liquid investments in money market securities of $53.4 million, as well as $44.8 million in other short-term investments comprised primarily of treasury and commercial paper instruments. In May of 2025, we entered into a definitive agreement to acquire TrueLark for a total consideration of $35.0 million, which includes a cash payment of $25.0 million, subject to certain adjustments, that upon consummation of the acquisition will reduce the cash, cash equivalents, and other short-term investments available to us by the same amount.

Current wording

As of June 30, 2025, our principal sources of liquidity were cash held as deposits in financial institutions and cash equivalents consisting of highly liquid investments in money market securities of $44.7 million, as well as $33.2 million in other short-term investments comprised primarily of treasury and commercial paper instruments. In May of 2025, we completed the acquisition of TrueLark for a total consideration of $35.0 million, which included a cash payment of $25.0 million, subject to certain adjustments, that upon consummation reduced the cash, cash equivalents, and other short-term investments available to us by the same amount.

Previous wording

A substantial source of our cash inflow from operating activities is our deferred revenue, which is included on our consolidated balance sheets as a liability. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recorded as revenue over the subscription term. We had $38.9 million of deferred revenue recorded as a current liability as of March 31, 2025. This deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met.

Current wording

A substantial source of our cash inflow from operating activities is our deferred revenue, which is included on our consolidated balance sheets as a liability. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recorded as revenue over the subscription term. We had $39.3 million of deferred revenue recorded as a current liability as of June 30, 2025. This deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met.

Previous wording

For the three months ended March 31, 2025, cash used in operating activities was $0.2 million, primarily due to a net loss of $8.8 million, adjusted for net non-cash charges of $16.1 million and net cash outflows of $7.5 million from changes in our operating assets and liabilities. The drivers of the changes in operating assets and liabilities were an $4.4 million increase in deferred contract costs comprising mainly sales commissions earned on bookings, a $0.5 million increase in prepaid expenses, $3.7 million decrease in accounts payable, a $1.1 million decrease in deferred revenue, and a $1.0 million decrease in operating lease liabilities. These amounts were partially offset by a $2.7 million increase in accrued liabilities and a $0.4 million decrease in accounts receivable.

Current wording

For the six months ended June 30, 2025, cash provided by operating activities was $5.2 million, primarily due to a net loss of $17.5 million, adjusted for net non-cash charges of $33.1 million and net cash outflows of $10.3 million from changes in our operating assets and liabilities. The drivers of the changes in operating assets and liabilities were an $9.0 million increase in deferred contract costs comprised of sales commissions earned on bookings, a $1.4 million decrease in prepaid expenses, $2.7 million increase in accounts payable, a $0.5 million decrease in deferred revenue, and a $2.0 million decrease in operating lease liabilities. These amounts were partially offset by a $2.5 million increase in accrued liabilities.

Previous wording

For the three months ended March 31, 2024, cash used in operating activities was $19.7 million, primarily due to a net loss of $7.2 million, adjusted for non-cash charges of $13.7 million and net cash outflows of $26.2 million from changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were a $15.8 million increase in accounts receivable, a $4.6 million decrease in accrued liabilities, and a $4.1 million increase in deferred contract costs, comprising mainly sales commissions earned on bookings. These amounts were partially offset by a $0.8 million increase to deferred revenue due to our prepay arrangements with our customers.

Current wording

For the six months ended June 30, 2024, cash provided by operating activities was $3.0 million, primarily due to a net loss of $15.8 million, adjusted for non-cash charges of $29.3 million and net cash outflows of $10.6 million from changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were an $8.0 million increase in deferred contract costs, comprising mainly sales commissions earned on bookings, a $3.0 million decrease in accrued liabilities, a $2.9 million increase in accounts receivable and a $2.0 million decrease in operating lease liabilities. These amounts were partially offset by a $2.4 million increase in accounts payable, a $1.5 million decrease to prepaid expenses and other assets, and a $1.4 million increase to deferred revenue due to our prepay arrangements with our customers.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2025 was $2.3 million, due to $18.6 million in short-term investment maturities, partially offset by $15.5 million in purchases of short-term investments. Additional investing cash flow activities included $0.4 million of furniture and equipment additions and $0.4 million in personnel-related costs capitalized as internal-use software development.

Current wording

Cash used in investing activities for the six months ended June 30, 2025 was $10.1 million, due to $30.5 million in short-term investment maturities, partially offset by $15.5 million in purchases of short-term investments. Additional investing cash flow activities included $1.0 million of furniture and equipment additions and $0.8 million in personnel-related costs capitalized as internal-use software development, and $23.3 million of business acquisitions, net of cash acquired.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2024 was $6.1 million, primarily due to $23.8 million in short-term investment maturities, partially offset by $16.8 million in purchases of short-term investments. Additional investing cash flow activities included $0.5 million of furniture and equipment additions and $0.3 million in personnel-related costs capitalized as internal-use software development.

Current wording

Cash provided by investing activities for the six months ended June 30, 2024 was $9.5 million, primarily due to $32.3 million in short-term investment maturities, partially offset by $20.5 million in purchases of short-term investments. Additional investing cash flow activities included $1.3 million of furniture and equipment additions and $1.0 million in personnel-related costs capitalized as internal-use software development.

Previous wording

Cash used in financing activities for the three months ended March 31, 2025 was $0.2 million, primarily due to principal payments on finance lease obligations of $1.8 million. These outflows were partially offset by cash proceeds of $1.1 million from the employee stock purchase plan, and proceeds from employee stock option exercises of $0.5 million.

Current wording

Cash used in financing activities for the six months ended June 30, 2025 was $2.0 million, primarily due to principal payments on finance lease obligations of $3.6 million. These outflows were partially offset by cash proceeds of $1.1 million from the employee stock purchase plan, and proceeds from employee stock option exercises of $0.5 million.

Previous wording

Cash used in financing activities for the three months ended March 31, 2024 was $6.6 million, primarily due to $6.1 million in employee taxes paid related to the net settlement of restricted stock units, and principal payments on finance lease obligations of $1.8 million. These outflows were partially offset by cash proceeds from employee stock option exercises of $0.3 million, and proceeds of $1.0 million from the employee stock purchase plan.

Current wording

Cash used in financing activities for the six months ended June 30, 2024 was $11.6 million, primarily due to $9.4 million in employee taxes paid related to the net settlement of restricted stock units, and principal payments on finance lease obligations of $3.5 million. These outflows were partially offset by cash proceeds from employee stock option exercises of $0.4 million, and proceeds of $1.0 million from the employee stock purchase plan.

Previous wording

During the three months ended March 31, 2025, we acquired $2.2 million of additional right of use assets through new finance lease obligations.

Current wording

During the six months ended June 30, 2025, we acquired $4.3 million of additional right of use assets through new finance lease obligations.

Previous wording

In August 2021, we established a revolving line of credit with SVB with total borrowing capacity up to $50.0 million, subject to reduction should we fail to meet certain metrics for recurring revenue and customer retention (the “August 2021 Agreement”). The line of credit, as amended, matures in August 2025. Amounts outstanding on the line of credit accrues interest at the greater of prime rate plus 0.25% and 3.50%. We are required to pay an annual fee of $0.1 million beginning on the effective date of the August 2021 Agreement, and continuing on the anniversary of the effective date. We are also required to pay a quarterly unused line of credit fee of 0.15% per annum of the available borrowing amount should the outstanding principal balance drop below $10.0 million (calculated based on the number of days and based on the average available borrowing amount). The line of credit is collateralized by substantially all of our assets. The August 2021 Agreement, as amended in March 2024, includes financial covenants requiring that, at any time, if our total unrestricted cash and cash equivalents held at SVB, plus our short- term investments managed by SVB, is less than $100 million, we must at all times thereafter maintain a consolidated minimum $20 million in liquidity, meaning unencumbered cash and short-term investments plus available borrowing on the line of credit, and that we are required to meet specified minimum levels of EBITDA, as adjusted for stock-based compensation and changes in our deferred revenue. We did not take any advances on the line of credit in the three months ended March 31, 2025. As of March 31, 2025, there was no outstanding balance on the line of credit, the full $50.0 million capacity was available for borrowing, and we were in compliance with all SVB loan covenants.

Current wording

In August 2021, we established a revolving line of credit with SVB with total borrowing capacity up to $50.0 million, subject to reduction should we fail to meet certain metrics for recurring revenue and customer retention (the “August 2021 Agreement”). In July 2025, the Company amended the SVB revolving line of credit (the “July 2025 Amendment”). The line of credit, as amended, matures in August 2027. Amounts outstanding on the line of credit accrue interest at the greater of prime rate less 0.25% and 3.50%. The Company is required to pay an annual fee of $0.1 million beginning on the effective date of the July 2025 Amendment. The line of credit is collateralized by substantially all of the Company’s assets. The August 2021 Agreement, as amended, includes financial covenants requiring that, at any time, if our total unrestricted cash and cash equivalents held at SVB, plus our short-term investments managed by SVB, is less than $100 million, we must at all times thereafter maintain a consolidated minimum $20 million in liquidity, meaning unencumbered cash and short-term investments plus available borrowing on the line of credit, and that we are required to meet specified minimum levels of EBITDA, as adjusted for stock-based compensation and changes in our deferred revenue. We did not take any advances on the line of credit in the three or six months ended June 30, 2025. As of June 30, 2025, there was no outstanding balance on the line of credit, the full $50.0 million capacity was available for borrowing, and we were in compliance with all SVB loan covenants.

Previous wording

For information on our critical accounting estimates, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 13, 2025. There have been no material changes to our critical accounting estimates as compared those disclosed in our 2024 Form 10-K.

Current wording

For information on our critical accounting estimates, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 13, 2025. There have been no material changes to our critical accounting estimates as compared those disclosed in our 2024 Form 10-K except those disclosed in Note 2 to our condensed consolidated financial statements.