Weave Communications, Inc.

Previous wording

Weave is a leading all-in-one customer experience and payments software platform for small and medium-sized healthcare businesses. From the first phone call to the final invoice and every touchpoint in between, Weave connects the entire patient journey. Weave’s software solutions transform how healthcare practices attract, communicate with, and engage patients and clients to grow their business. Weave seamlessly integrates billing and payment requests into communication workflows, streamlining payment timelines, reducing accounts receivable, and supporting practice profitability.

Current wording

Weave is a leading vertical SaaS platform that delivers AI-powered patient engagement and payment solutions for small and medium-sized healthcare practices. From the first phone call to the final invoice and every touchpoint in between, Weave connects the entire patient journey. Weave’s software solutions transform how healthcare practices attract, communicate with, and engage patients and clients to grow their business. Weave seamlessly integrates billing and payment requests into communication workflows, streamlining payment timelines, reducing accounts receivable, and supporting 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 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.

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 92% of our revenue the three months ended September 30, 2025 and 2024, respectively, and 91% and 92% for the nine months ended September 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

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.

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 EHR software, 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. 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.

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. As Vidurama, Inc. ("TrueLark”) had a predominantly multi-location SMB customer base, our acquisition of TrueLark provides an additional opportunity for Weave to expand our customer base 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, 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.

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’ locations 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, Insurance Verification 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 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.

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 September 30, 2025 and 2024 and 78% for each of the nine months ended September 30, 2025 and 2024.

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 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.

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 September 30, 2025 and 2024, approximately 29% and 36% 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 unaudited condensed consolidated balance sheets.

Previous wording

We expect that our sales and marketing expenses will increase and continue to be our largest operating expense for the foreseeable future as we grow our business. As a percentage of revenue, we anticipate sales and marketing expenses to decrease in 2025 as compared to 2024, and we expect these expenses to decrease as a percentage of revenue over time.

Current wording

We expect that our sales and marketing expenses will continue to increase and continue to be our largest operating expense for the foreseeable future as we grow our business. Although the expenses as a percentage of revenue may fluctuate from period to period, we expect these expenses to decrease as a percentage of revenue over time.

Previous wording

General and administrative expenses consist primarily of personnel-related expenses for our finance, legal, human resources, facilities and administrative personnel, including salaries, benefits, bonuses and stock-based compensation. General and administrative expenses also include external legal, accounting, and other professional services fees, software and subscription services dedicated for use by our general and administrative functions, insurance and other corporate expenses.

Current wording

General and administrative expenses consist primarily of personnel-related expenses for our finance, legal, human resources, facilities and administrative personnel, including salaries, benefits, bonuses and stock-based compensation. General and administrative expenses also include external legal, accounting, and other professional services fees, software and subscription services dedicated for use by our general and administrative functions, insurance and other corporate expenses, such as acquisition transaction costs.

Previous wording

Interest expense results primarily from interest payments on our borrowings and interest on finance lease obligations. Interest on borrowings is based on a floating per annum rate at specified percentages above the prime rate. Interest on finance leases is based on the rate implicit within the lease agreement.

Current wording

Interest expense results primarily from administrative fees associated with our revolving line of credit and interest on finance lease obligations. Interest on our revolving line of credit is based on a floating per annum rate at specified percentages above the prime rate. Interest on finance leases is based on the rate implicit within the lease agreement.

Previous wording

During the three months ended June 30, 2025, we recorded an income tax benefit of $1.1 million, compared to income tax expense of $0.1 million for the three months ended June 30, 2024. The benefit was primarily attributable to the discrete release of a portion of the valuation allowance in connection with the recognition of a deferred tax liability arising from a stock acquisition completed during the quarter. This deferred tax liability, which relates primarily to intangible assets acquired in the transaction, provided objectively verifiable positive evidence of future taxable income under ASC 740.

Current wording

During each of the three months ended September 30, 2025 and 2024 we recorded income tax expense of $0.1 million. For the nine months ended September 30, 2025, we recognized an income tax benefit of $1.0 million, primarily related to a discrete release of $1.3 million of valuation allowance on deferred tax assets recognized in connection with a deferred tax liability established from an acquisition completed in the second fiscal quarter of 2025.

Previous wording

We continue to maintain a full valuation allowance on our remaining domestic deferred tax assets and reassess the need for this allowance on a quarterly basis, considering all available positive and negative evidence.

Current wording

We continue to maintain a full valuation allowance on our remaining domestic deferred tax assets and reassess the need for this allowance on a quarterly basis, considering all available positive and negative evidence. We also evaluated the potential impact of the One Big Beautiful Bill Act, enacted on July 4, 2025, and determined that it did not have a material effect on our income tax provision or overall financial statements.

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. These metrics exclude the impact of TrueLark subsequent to acquisition.

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 the May 2025 TrueLark acquisition.

Previous 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.

Current wording

We believe our dollar-based net revenue 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 revenue retention rates over the trailing twelve months prior to such date.

Previous wording

We believe our dollar-based gross retention rate (“GRR”) provides insight into our ability to retain our customers, allowing us to evaluate whether the platform is addressing customer needs. To calculate our GRR, we first identify the Base Locations that were under subscription in the Base Month. We then calculate the effect of reductions in revenue from customer location terminations by measuring the amount of AMR in the Base Month for Base Locations still under subscription twelve months subsequent to the Base Month, or Remaining AMR. We then divide Remaining AMR for the Base Locations by AMR in the Base Month for the Base Locations to derive a monthly gross retention rate. We calculate GRR as of any date by taking a weighted average of the monthly gross retention rates over the trailing twelve months prior to such date. GRR reflects the effect of customer locations that terminate their subscriptions, but does not reflect changes in revenue due to revenue expansion, revenue contraction, or the addition of new customer locations.

Current wording

We believe our dollar-based gross revenue retention rate (“GRR”) provides insight into our ability to retain our customers, allowing us to evaluate whether the platform is addressing customer needs. To calculate our GRR, we first identify the Base Locations that were under subscription in the Base Month. We then calculate the effect of reductions in revenue from customer location terminations by measuring the amount of AMR in the Base Month for Base Locations still under subscription twelve months subsequent to the Base Month, or Remaining AMR. We then divide the Remaining AMR for the Base Locations by AMR in the Base Month for the Base Locations to derive a monthly gross revenue retention rate. We calculate GRR as of any date by taking a weighted average of the monthly gross revenue retention rates over the trailing twelve months prior to such date. GRR reflects the effect of customer locations that terminate their subscriptions, but does not reflect changes in revenue due to revenue expansion, revenue contraction, or the addition of new customer locations.

Previous wording

The following table sets forth our condensed consolidated statements of operations data for the periods indicated:

Current wording

The following table sets forth our unaudited condensed consolidated statements of operations data for the periods indicated:

Previous wording

The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of revenue for the periods indicated:

Current wording

The following table sets forth our unaudited condensed consolidated statements of operations data expressed as a percentage of revenue for the periods indicated:

Previous 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.

Current wording

Revenue increased by $9.0 million, or 17%, compared to the three months ended September 30, 2024. Approximately $8.5 million of our revenue growth was attributable to revenue generated from new customer locations acquired during the 12 months subsequent to September 30, 2024. Approximately $0.5 million of the increase was attributable to revenue generated from existing customer locations under subscription as of September 30, 2024.

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 $0.5 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.

Current wording

The increase in cost of revenue was due primarily to an increase of $1.4 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, an increase of $0.2 million in computer and office supplies, and an increase of $0.3 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 $2.4 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.

Current wording

The increase in sales and marketing expenses was attributable in part to an increase of $2.6 million in personnel-related expenses, driven largely by salary and commission plan adjustments and increased average headcount, which together caused approximately $2.4 million of the increase. The remaining $0.2 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 $2.2 million, particularly with our digital media, partner marketing, and influencer marketing efforts. In addition, we incurred a $0.3 million increase in overhead allocation due to an increase in headcount and a $0.1 million increase in the amortization of acquisition-related intangible assets.

Previous wording

The increase in research and development expenses was due to an increase of $3.6 million in personnel-related expenses, largely from increased salary expenses of $2.2 million due to increased headcount and salary increases, and additional stock-based compensation expense of $1.4 million related to grants to new and existing employees.

Current wording

The increase in research and development expenses was due to an increase of $3.7 million in personnel-related expenses, largely from increased salary expenses of $1.3 million due to increased headcount and salary increases, and additional stock-based compensation expense of $2.5 million related to grants to new and existing employees including performance-based restricted stock unit awards (“PRSUs”) granted to key TrueLark employees in connection with the TrueLark acquisition. The overall increase to research and development expenses was partially offset by the capitalization of approximately $0.5 million of incremental internal use software.

Previous 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.

Current wording

The increase in general and administrative expenses was primarily due to a $0.4 million increase in software subscriptions and a $0.4 million increase related to professional fees, nearly all of which were incurred in connection with the acquisition of TrueLark. These increases were partially offset by a decrease in personnel-related expense of approximately $0.4 million that was driven by a decrease in stock-based compensation of approximately $0.6 million related to the vesting of previously-granted awards, and which itself was partially offset by increases to salaries, wages, and bonuses of approximately $0.2 million.

Previous wording

Revenue increased by $7.9 million, or 16%, compared to the three months ended June 30, 2024. Of the total increase, approximately $7.2 million, or 92%, was attributable to new customer locations acquired during the 12 months subsequent to June 30, 2024. Approximately $0.7 million, or 8%, of the increase was attributable to existing customer locations under subscription as of June 30, 2024.

Current wording

Revenue increased by $25.5 million, or 17%, compared to the nine months ended September 30, 2024. Of the increase, approximately $19.8 million of our revenue growth was attributable to revenue generated from new customer locations acquired during the 12 months subsequent to September 30, 2024. Approximately $5.6 million of the increase was attributable to revenue generated from existing customer locations under subscription as of September 30, 2024.

Previous wording

The increase in cost of revenue was primarily due to a $2.6 million increase in direct costs to support customer usage, particularly with telecommunications connectivity costs, credit card processing fees, and cloud infrastructure costs. We also experienced a $1.0 million increase in personnel-related costs from our customer support and onboarding functions, and a $0.1 million increase in costs related to the amortization of acquisition-related intangible assets. Although cost of revenue increased in absolute dollars, it decreased as a percentage of revenue, resulting in overall gross margin improvement. This improvement was driven by the same factors discussed above under “Comparison of the Three Months Ended June 30, 2025 and 2024—Cost of Revenue and Gross Margin."

Current wording

The increase in cost of revenue was primarily due to a $4.0 million increase in direct costs to support customer usage, particularly with telecommunications connectivity costs, credit card processing fees, and cloud infrastructure costs. We also experienced a $1.4 million increase in personnel-related costs from our customer support and onboarding functions, a $0.3 million increase in costs related to the amortization of acquisition-related intangible assets, and an increase of $0.3 million in costs related to computer and office supplies.

Previous wording

Our gross margin improvement is derived from a favorable customer mix as a greater portion of our customers had fully depreciated phone hardware, and from efficiencies with third-party costs incurred for specific platform features and overall data usage as part of our cost management efforts. Further, this improvement was bolstered by an increase in payments revenue, which has a higher gross margin than our other offerings.

Current wording

Although cost of revenue increased in absolute dollars, it decreased as a percentage of revenue, resulting in overall gross margin improvement. This improvement was derived from a favorable customer mix as a greater portion of our customers had fully depreciated phone hardware, and from efficiencies with third-party costs incurred for specific platform features and overall data usage as part of our cost management efforts. Further, this improvement was bolstered by an increase in payments revenue, which has a higher gross margin than our other offerings.

Previous wording

The increase in sales and marketing expenses was primarily attributable to a $4.5 million increase in personnel-related expenses, including increases in stock-based compensation and commission/bonus incentives, largely due to an increase in headcount and salary adjustments. In addition, demand generation expenses increased by $2.4 million driven by our influencer marketing efforts and partnerships. We also incurred $0.2 million in additional travel and event-related costs due to increased in-person attendance at trade shows and $0.2 million in office supplies and equipment.

Current wording

The increase in sales and marketing expenses was primarily attributable to a $7.1 million increase in personnel-related expenses, including increases in stock-based compensation and commission/bonus incentives, largely due to an increase in headcount and salary adjustments. In addition, demand generation expenses increased by $4.5 million driven largely by our digital marketing and influencer marketing efforts and partnerships. We also incurred $0.2 million in additional professional fees, $0.5 million of allocated overhead costs due to the increase in headcount, and $0.2 million of increased travel expenses.

Previous 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.

Current wording

The increase in research and development expenses was due to an increase of $7.3 million in personnel-related expenses, largely from increased salary expenses of $3.4 million due to increased headcount and salary increases, and additional stock-based compensation expense of $3.9 million related to grants to new and existing employees including PRSUs granted to key TrueLark employees in connection with the TrueLark acquisition. The overall increase in research and development expenses was partially offset by the capitalization of approximately $0.6 million of internal use software.

Previous wording

The increase in general and administrative expenses was primarily due to a $2.8 million increase in personnel-related expenses, particularly from additional bonus incentives, salary adjustments, and stock-based compensation. In addition, professional fees increased by approximately $1.4 million, with $1.1 million of this increase attributable to one-time costs associated with the acquisition of TrueLark. These increases were partially offset by a $0.1 million decrease in our director and officer liability insurance premiums.

Current wording

The increase in general and administrative expenses was primarily due to a $2.2 million increase in personnel-related expenses, particularly from additional bonus incentives, salary adjustments, and stock-based compensation. In addition, professional fees increased by approximately $1.6 million, with approximately $1.5 million of this increase attributable to one-time costs associated with the acquisition of

Previous wording

To supplement our unaudited consolidated financial statements, which are prepared in conformity with U.S. GAAP, we use free cash flow, free cash flow margin and Adjusted EBITDA, which are non-GAAP financial measures, to enhance the understanding of our U.S. GAAP financial measures, evaluate growth trends, establish budgets, and assess operating performance. These non-GAAP financial measures should not be considered by the reader as substitutes for, or superior to, the financial statements and financial information prepared in accordance with U.S. GAAP. See below for a description of these non-GAAP financial measures, reconciliations of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures and their limitations as an analytical tool.

Current wording

To supplement our unaudited condensed consolidated financial statements, which are prepared in conformity with U.S. GAAP, we use free cash flow, free cash flow margin and adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), which are non-GAAP financial measures, to enhance the understanding of our U.S. GAAP financial measures, evaluate growth trends, establish budgets, and assess operating performance. These non-GAAP financial measures should not be considered by the reader as substitutes for, or superior to, the financial statements and financial information prepared in accordance with U.S. GAAP. See below for a description of these non-GAAP financial measures, reconciliations of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures and their limitations as an analytical tool.

Previous wording

We define free cash flow as net cash used in operating activities, less purchases of property and equipment and capitalized internal-use software costs, and free cash flow margin as free cash flow as a percentage of revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide useful information to management and investors, even if negative, as they provide information about the amount of cash consumed by our combined operating and investing activities. For example, as free cash flow has in the past been negative, we have needed to access cash reserves or other sources of capital for these investments.

Current wording

We define free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software costs, and free cash flow margin as free cash flow as a percentage of revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide useful information to management and investors, as they provide information about the amount of cash consumed by our combined operating and investing activities. For example, as free cash flow has in the past been negative, we have needed to access cash reserves or other sources of capital for these investments.

Previous 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.

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. A financial covenant under our revolving line of credit with SVB uses a different but similar measure of EBITDA, as adjusted for stock-based compensation expense and changes in its deferred revenue balances, which we refer to as Adjusted EBITDA in our unaudited condensed consolidated financial statements.

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 $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.

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 $317.2 million as of September 30, 2025 but we have generally generated positive cash flows from operations since fiscal year 2023. 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 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.

Current wording

As of September 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 $64.4 million, as well as $15.9 million in other short-term investments comprised primarily of treasury and commercial paper instruments.

Previous 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.

Current wording

For the nine months ended September 30, 2025, cash provided by operating activities was $11.3 million, primarily due to a net loss of $26.2 million, adjusted for net non-cash charges of $51.2 million and net cash outflows of $13.7 million from changes in our operating assets and liabilities. The drivers of the changes in operating assets and liabilities were an $13.6 million increase in deferred contract costs comprised of sales commissions earned on bookings, a $1.8 million decrease in prepaid expenses, $2.6 million increase in accounts payable, a $1.2 million decrease in accounts receivable, a $1.4 million decrease in deferred revenue, and a $3.1 million decrease in operating lease liabilities. These amounts were partially offset by a $6.4 million increase in accrued liabilities.

Previous 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.

Current wording

For the nine months ended September 30, 2024, cash provided by operating activities was $7.5 million, primarily due to a net loss of $21.6 million, adjusted for net non-cash charges of $44.3 million and net cash outflows of $15.2 million from changes in our operating assets and liabilities. The drivers of the changes in operating assets and liabilities were an $11.5 million increase in deferred contract costs comprising mainly sales commissions earned on bookings, a $6.1 million increase in accounts receivable, and a $3.0 million decrease in operating lease liabilities. These amounts were partially offset by a $2.5 million increase in accounts payable, a $1.7 million decrease to prepaid expenses and other assets, a $1.1 million increase to deferred revenue due to our prepay arrangements with our customers, and a $0.2 million decrease in accrued liabilities.

Previous 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.

Current wording

Cash used in investing activities for the nine months ended September 30, 2025 was $5.7 million, due to $47.9 million in short-term investment maturities, partially offset by $15.5 million in purchases of short-term investments. Additional investing cash flow activities included $1.3 million of furniture and equipment additions and $1.6 million in personnel-related costs capitalized as internal-use software development, and $23.9 million of business acquisitions, net of cash acquired.

Previous 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.

Current wording

Cash provided by investing activities for the nine months ended September 30, 2024 was $9.5 million, due to $55.7 million in short-term investment maturities, partially offset by $43.0 million in purchases of short-term investments. Additional investing cash flow outflow activities included $1.8 million of furniture and equipment additions and $1.4 million in personnel-related costs capitalized as internal-use software development.

Previous 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.

Current wording

Cash used in financing activities for the nine months ended September 30, 2025 was $4.2 million, primarily due to principal payments on finance lease obligations of $5.4 million and $1.5 million in payments made for taxes related to the net share settlement of equity awards. These outflows were partially offset by cash proceeds of $2.0 million from the employee stock purchase plan, and proceeds from employee stock option exercises of $0.7 million.

Previous 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.

Current wording

Cash used in financing activities for the nine months ended September 30, 2024 was $16.6 million, due to $13.9 million in employee taxes paid related to the net settlement of restricted stock units, and principal payments on finance lease obligations of $5.3 million. These outflows were partially offset by cash proceeds of $2.0 million from the employee stock purchase plan, and proceeds from employee stock option exercises of $0.6 million.

Previous 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.

Current wording

During the nine months ended September 30, 2025, we acquired $5.5 million of additional right of use assets through new finance lease obligations.