Weave Communications Inc

NYSE:WEAV

Earnings Call Analysis

Weave's Remarkable Q2 2024 Financial Performance

In Q2 2024, Weave demonstrated outstanding financial results with a revenue increase to $50.6 million, marking a 21.4% year-over-year growth. For the first time in company history, Weave achieved positive adjusted EBITDA, reflecting a $3 million improvement. Gross margin climbed to 71.9%, driven by operational efficiencies. The company projected Q3 revenue between $50.7 million to $51.7 million and raised the full-year 2024 revenue outlook to $201 million-$203 million. Weave continues to enhance its healthcare software and payment platform, integrating AI-driven solutions and expanding partnerships, particularly with Patterson Dental, to penetrate new markets and upsell existing customers.

Strong Financial Performance in Q2 2024

In the second quarter of 2024, Weave delivered exceptional financial results, achieving a revenue of $50.6 million, which marks a 21.4% increase year-over-year. This growth is a notable acceleration from the 19.2% growth achieved in the previous quarter. Additionally, the revenue surpassed the high end of the prior guidance by $1.4 million. Gross margins improved to 71.9%, representing an increase of 400 basis points compared to the same period last year.

Noteworthy Milestones in Market Efficiency

For the first time in its history, Weave achieved positive adjusted EBITDA, coming in just above breakeven. This is a significant milestone, reflecting an improvement of $3 million from the previous year. The improved margins are a testament to the successful execution of strategies aimed at enhancing operational efficiencies and reducing costs.

Growing Market Opportunities and Product Enhancements

Weave's total addressable market is over $7 billion, with the specialty medical segment being a focal point of growth. Despite its rapid growth, Weave noted that less than 0.5% of this market is currently penetrated. This suggests significant upside potential. The company has also successfully increased average revenue per customer by introducing higher-priced bundles and enhancing product offerings, helping to drive revenue growth.

Retention Rates Signal Stability

The company reported a rise in net revenue retention (NRR) to 97%, up from 96% in the prior quarter. This improvement is due to effective upselling and price adjustments that reflect the additional value delivered to customers. The gross revenue retention rate remained steady at 92%, showcasing Weave's strong position in customer retention, which has consistently ranged between 91% to 94% over the last four years.

Controlled Expenses Lead to Profitability Improvements

Sales and marketing expenses were $20.2 million, accounting for 40% of revenue, slightly up from 39% year-over-year, while research and development expenses actually dropped as a percentage of revenue to 15%. General and administrative expenses also improved, reflecting a more efficient operational structure as revenue scales.

Innovative Developments on the Horizon

Weave is heavily investing in product enhancements, including a new integrated payments platform and expanded functionalities that leverage artificial intelligence to streamline operational processes in healthcare practices. The introduction of Weave Enterprise allows multi-location practices to manage operations more efficiently, and this product has generated excitement among potential clients.

Guidance Reflects Optimism for the Future

Looking ahead, Weave has raised its revenue guidance for the fiscal year 2024. The company forecasts total annual revenue to be between $201 million to $203 million. Additionally, for Q3, they expect revenue between $50.7 million to $51.7 million. While the non-GAAP operating loss is projected to range from $3.8 million to $1.8 million for the full year, the outlook remains positive as the business continues to execute effectively.

Strategic Partnerships Enhance Market Reach

Recently, Weave formed a significant commercial partnership with Patterson Dental, which will enable Weave to reach approximately 100,000 locations through Patterson's broad network. This partnership is expected to enhance market penetration and potentially increase annual recurring revenue (ARR) as both companies collaborate on sales initiatives.

Summary of Key Takeaways

Overall, Weave's second-quarter performance underscores a robust growth trajectory, strong customer retention, and operational efficiencies leading to improved financial health. With continued focus on product innovation and market expansion, Weave appears well-positioned for sustainable growth in the healthcare communications sector.

Earnings Call Transcript 2024-Q2

[Operator]

Greetings, and welcome to the Weave Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mark McReynolds, Head of Investor Relations. Thank you. You may begin.

[Mark McReynolds, executive]

Thank you, Sachi. Good afternoon, and welcome to Weave's Second Quarter 2024 Earnings Call. With me on today's call are Brett White, CEO; and Alan Taylor, CFO.

During the course of this conference call, we will make forward-looking statements regarding the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date, and are subject to various risks and uncertainties described in our SEC filings. We've disclaimed any obligation to update or revise any forward-looking statements.

Further, on today's call, we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. Unless otherwise noted, all numbers we talk about today will be on a non-GAAP basis. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC before this call, as well as the earnings presentation on our Investor Relations website at investors.getweave.com.

And with that, I will now turn the call over to Brett.

[Brett White, executive]

Thank you, Mark, and thank you to everyone for your participation today. I'd like to start today's call with financial highlights from Q2. I'm thrilled to share that we had an outstanding quarter, continuing our track record of improving financial performance and setting the stage for a strong second half of the year.

We delivered another quarter of solid top line performance, significant gross and operating margin improvements, and for the first time in our company's history, positive adjusted EBITDA. Revenue for Q2 was $50.6 million, representing 21.4% year-over-year growth compared to 19.2% growth last quarter and $1.4 million above the high end of the range that we provided in May.

Gross margin reached 71.9%, 400 basis points greater than Q2 of last year, marking our 10th consecutive quarter of gross margin improvement. Additionally, our adjusted EBITDA margin improved by over 700 basis points from last year.

These results highlight the continued strong demand for our software and payments platform and our ongoing commitment to business efficiency. Our mission is to enhance health care experiences for every practice, patient and interaction. We have created a comprehensive customer experience software and payments platform tailored to small and medium-sized health care practices.

Our solution empowers health care providers to focus on patient care while we optimize office operations, manage payment processing and drive practice growth through enhanced patient communication and engagement. For over 15 years, we've delivered solutions that meet the unique needs of SMB health care providers. These providers often lack dedicated IT teams and depend on intuitive software like Weave. Our platform integrates with these practice's system of record and simplifies attracting, engaging and retaining patients.

Our total addressable market in the U.S. exceeds $7 billion, including specialty medical, our third largest and fastest-growing vertical market, where growth rates accelerated again in Q2. In addition to new customer growth, we have seen substantial opportunities to increase our share of wallet within our current customer base.

First, we are enhancing our payments platform by embedding digital collections processes into communication workflows, including Text To Pay and online payments, all using the trusted practice telephone number. 65% of patients say they would be more likely to choose a health care provider if offered flexible ways to pay for services.

Weave makes it easy for providers to offer buy now, pay later and payment plans, which help increase conversion from consultation to accepted treatment. Weave Payments helps practices streamline revenue cycle management, modernizing the payment processing workflow and improve collection efficiency.

In Q2, we welcomed Greg Leos to the newly created position of General Manager of Weave Payments. Greg brings an extensive fintech background to our team and will focus on expanding the adoption of Weave Payments within our customer base and broadening our payments offering. This includes improving our payments platform for multi-location practices by streamlining reconciliation processes and improving analytics and reporting tools to optimize billing and collection performance.

Next, we are adding and deepening authorized and certified partner integrations, expanding our addressable market and strengthening product market fit. This improves our customer experience and ability to upsell customers to premium offerings. Integrations power automated and personalized communications, which increase operational efficiency, improve patient engagement and boost practice growth. These efforts have a clear correlation with higher average sales prices and improved retention rates.

Additionally, we continue to develop innovative solutions that simplify office operations, including AI-driven assistance. Staffing often represents the largest line item in a practice's budget, making staff efficiency and effectiveness critical to practice profitability. On average, 30% of calls into a practice during business hours go unanswered. Our AI-driven solutions will address this issue by capturing these otherwise missed revenue opportunities. This not only helps practices run more efficiently, but also frees up staff to focus on delivering exceptional patient care.

Finally, we continue to enhance the marketing tools in our platform and improve practice analytics and insights to help customers expand their audience and grow their business. By broadening our offerings, we aim to boost our value proposition, foster deeper customer relationships, drive long-term loyalty and growth, and capture a larger share of our customers' budgets.

Transitioning to partnerships, we have made significant strides this year, and I'd like to highlight a few key accomplishments. Year-to-date, we've delivered 20 new integrations, including: eClinicalWorks, ezyVet, InfiniteVT, and Shepherd, opening up our addressable market by more than 86,000 locations. We also expanded integrations with several existing partners in enabling an enriched customer experience with products like Digital Forms, Online Scheduling and Payments.

In July, we jointly announced a commercial partnership with Patterson Dental, the second largest dental practice management software provider globally. This agreement allows Patterson Dental to sell Weave directly into the roughly 100,000 locations that their sales team engages with. Our integration with Patterson practice management software Fuse and EagleSoft now have the most complete data exchange available, including payment write-backs to the ledger.

Deepened integrations with Dolphin Management, Dolphin Cloud and Dolphin Blue are also in development. Our team continues to work on other leading systems of record on similar commercial and integration partnerships.

Finally, in Q2, we launched an affiliate partner marketplace to showcase best-in-class technology and services for health care practices. This initiative opens up additional revenue streams through recommended patient experience solutions that meet our customers' evolving needs. In addition to delivering new and deepened partner integrations, we've been diligently developing our next-generation platform, which modernizes our product infrastructure and improves usability. Key improvements include dynamic sizing to optimize screen real estate, enhanced personalization, multitasking capabilities and auto updates. This rebuilt experience also enables Weave to scale with a more robust and modern technology framework.

In June, we were thrilled to announce Weave Enterprise. This new solution for practices with multiple locations is built entirely on our next-generation platform. It is designed to help dental service organizations, vision, veterinary and medical groups, standardize their operations and streamline revenue cycle management. Weave Enterprise provides a centralized way to manage dozens or even hundreds of offices seamlessly. Weve Enterprise also provides powerful insights and analytics, enabling the evaluation of trends, performance benchmarking and discovery of actionable data across locations.

Finally, we continue to invest in both predictive and generative AI, leveraging over a decade of call, text and voicemail data to train our large language models. This extensive data set, along with our dedicated AI team, uniquely positions us within the industry, giving us a competitive edge in developing AI solutions that deliver efficiency and productivity for health care practices.

Weave has consistently received accolades that affirm our commitment to our customers' experience and the industry-leading performance of our platform and team. Weave was again recognized by G2 in their summer 2024 report, ranking first in 27 categories, being named a leader in the grid for patient relationship management and a top 50 software product for small businesses.

We're also proud to be recognized for our commitment to creating an outstanding workplace. Weave was honored on Inc.'s Annual Best Workplaces list and the 2024 ParityLIST, celebrating companies with exceptional work environments and inclusive cultures.

In closing, I'm immensely proud of what the team has accomplished in Q2, continuing the strong start to the year. We accelerated our top line growth, reached a very significant milestone of positive adjusted EBITDA. This success is a testament to our dedication to providing innovative solutions that address our customers' needs. I'd like to extend a big thank you to our customers, partners, team members and shareholders for their continued support of Weave.

With that, I'll turn the call over to Alan to provide more detailed financial results and review our outlook. Alan?

[Alan Taylor, executive]

Thanks, Brett. Good afternoon, everyone. I'm excited to provide some additional color on our financial performance for the quarter. We continued to execute in Q2, resulting in a strong quarter of results. We delivered second quarter revenue of $50.6 million, reaccelerating our growth rate to 21.4% year-over-year, compared to 19.2% last quarter. This represents a $1.9 million beat or a 4% beat over the midpoint of the range we provided last quarter.

Revenue growth in the quarter was driven by a combination of new customer additions, particularly in our specialty medical vertical, and increases in average revenue per location. The exciting part of the progress with specialty medical is that despite it being our fastest-growing vertical, we are still less than [ 0.5% ] penetrated into the total addressable market.

Weave's average revenue per customer has steadily increased over the past 3 years as we have been successful in selling higher-priced bundles. We've seen some impressive performance from the products we have released in the last couple of years. Digital forms, bulk messaging and insurance verification have performed really well over the past several quarters and are beginning to contribute meaningfully to total revenue growth.

Our net revenue retention rate improved to 97% in Q2, up from 96% last quarter. This includes the results of our upsell motion and price adjustments, which are periodically made to some customers and products as we continuously deliver additional value and functionality on our platform. Some examples of functionality we have delivered recently include our AI reviews assistant, voicemail transcription, deepened integration and AI e-mail assistant.

Our gross revenue retention rate held steady at 92%, among the best-in-class for SMB retention. Logo retention has been very consistent for Weave, with gross revenue retention landing between 91% and 94% every quarter for the last 4 years.

Transitioning to our operating results. As a reminder, I'll be referring to non-GAAP results, unless stated otherwise. In Q2, we saw across-the-board improvement in our results. Gross margin was 71.9%. This represents a 400 basis point increase year-over-year and a 150 basis point increase sequentially.

Our cost of goods sold increased by just 6% year-over-year while revenue increased by over 21%. Gross margin improvements are driven by economies of scale and the costs associated with our communications solutions, decreases in hardware costs and efficiencies gained in our support model. Based on customer usage, in the second half of 2021, we adjusted our product packaging to reduce the number of included phones from 10 to 5.

Phone costs are amortized over 36 months, and the impact of that change continues to contribute consistent and incremental gross margin improvements. It's also worth noting the efficiencies gained in our support model have concurrently yielded improvements in our ability to deliver an outstanding customer experience.

Sales and marketing expenses came in at $20.2 million, representing 40% of revenue compared with 39% in the same period last year, as we have expanded our addressable market into specialty medical and mid-market, invested in strategic partnerships and continue to grow in our core verticals.

Research and development expense totaled $7.8 million in the second quarter, representing 15% of revenue compared with $7.3 million or 17% of revenue in the same period last year. This 200 basis point improvement was largely driven by our operational scale, while simultaneously increasing throughput as the team delivered Weave Enterprise on our next-generation platform. We've also ramped up delivery on integration and strategic partnerships like Patterson Dental and have delivered key product improvements.

General and administrative expenses were $9.4 million in the second quarter, representing 19% of revenue compared with $8.8 million or 21% of revenue in the same period last year. The fixed costs associated with operating as a public company will continue to decrease as a percentage of revenue, as we continue to grow in the years to come.

Our operating loss for Q2 was $1 million, an improvement of $3 million or 76% compared to last year, and $500,000 higher than the top end of the guidance that we gave in May. The corresponding operating loss margin of 1.9% is a significant improvement from the operating loss margin of 9.5% last year.

Our net loss was $300,000 or $0.00 per share in the second quarter based on 71.3 million weighted average shares outstanding. This is compared to a net loss of $3.1 million or $0.05 per share last year. This represents a $2.8 million improvement due to revenue acceleration and operating efficiencies.

As Brett mentioned, adjusted EBITDA was positive for the first time in our company's history, landing just above breakeven at $5,000, a $3 million improvement year-over-year. Achieving positive adjusted EBITDA is a significant improvement compared to the negative 7.3% margin reported a year ago.

Shifting focus to the balance sheet and cash flow. We ended the second quarter with $99 million in cash and short-term investments, an improvement of over $16 million sequentially. As a reminder, last quarter, we implemented a new billing system that necessitated deferring some Q1 billings into Q2. This resulted in a one-time disruption to cash flow last quarter, which reversed in Q2.

Cash flow generated from operations was $22.7 million in the second quarter and $3 million year-to-date. Free cash flow was $21.2 million in the second quarter and $700,000 year-to-date.

Turning to our outlook for the third quarter and full year 2024. For the third quarter of 2024, we expect total revenue in the range of $50.7 million to $51.7 million and non-GAAP operating loss in the range of $1.2 million to $0.2 million.

For the full year 2024, we are raising our outlook, and we expect total revenue to be in the range of $201 million to $203 million. We expect our full year 2024 non-GAAP operating loss to be in the range of $3.8 million to $1.8 million. We expect to have a weighted average share count of approximately 71.7 million shares for the full year.

In summary, we've achieved excellent results in Q2, underscoring the continuing demand for our platform. We are optimistic about our future opportunities and are committed to strengthening our long-term value through sustained business growth.

And with that, I'll turn the call over to the operator for Q&A.

[Operator]

[Operator Instructions] The first question is from Parker Lane from Stifel.

[J. Lane, analyst]

Brett, you talked about 0.5% of penetration coming from specialty medical. I was wondering if you could talk about what pockets of specialty medical you're seeing the most traction in today and how the go-to-market motion is aligned around those particular areas?

[Brett White, executive]

Sure. Thanks, Parker. So, where we're seeing the traction is physical therapy, med spa, plastics, general practice. And those are really our 4 primary focus areas with both sales and marketing and integrations. And our go-to-market is pretty similar to our past history. The only difference being we're new to these spaces. So, we have to [ cede ] them with some brand marketing and then run our usual marketing motions to generate the inbound leads, and then we also have an outbound motion into those segments.

[J. Lane, analyst]

Got it. That makes sense. And then, in terms of the rollout of the new platform, is there a timeline by which you're planning to sort of get that in customers' hands? And what sort of enhanced features do you think are coming to the table that would potentially drive expansion or further retention momentum going forward?

[Brett White, executive]

Sure. So, we developed an entirely new product platform we call the new Weave experience, and built on that are really 2 products; Weave Enterprise, which is a product focused almost -- well, primarily, almost exclusively on multi-locations. And so that product offers those customers the ability to manage multiple locations through 1 application, through 1 login. So that will be very, very helpful. They can also multitask. They can also use the application to take up as much or little real estate on their screen as they like.

So, that is really the opportunity, the product opportunity that we now have to really move in a big way into multi-location sales. We already have about 1/3 of our customers in multi-location, but we really haven't had a great, dedicated tool that meets all their needs or dedicated product, and now we do. So, with this release, we are sharing this product. We are demoing this product currently with multi-location opportunities, and it's getting quite a bit of interest and excitement on the multi-location opportunity side.

On the second side of the Weave new experience is, we've also enabled the new version of the SMB app. And really, the big -- the new features there that will be -- I think we're really excited about is the ability to change -- to dynamically change the size and configuration of the app. Historically, our app was limited to kind of like an iPhone 4 size. And so you can retain that functionality or you can expand it, have it pick up your whole screen, you can have different types of views. So that should be very helpful.

Also, it's got auto update features, so that the app just auto updates like a modern app versus having to go and download it and delete and replace. And that was historically a source of some challenges, certainly on the support side, because you couldn't guarantee all the customers are running the same version of the app. So that should be very helpful.

I think we have about 7,000 customers currently using the SMB Weave app and I think they toggle back and forth. They can use the legacy app if they want. They can use the new one. But we've got about 7,000 on it now. The other interesting thing about the new app for the SMB, actually both products is, you can run them on Chrome, which historically we couldn't do. They're very browser friendly and/or you can just download the app. So, hopefully, that helps.

[Operator]

The next question is from Alex Sklar from Raymond James.

[Alexander Sklar, analyst]

Great. Brett or Alan, just in terms of all the added integration work you've announced over the last year, can you just frame the size of your installed base today that's not on one of your integrated bundles, but they now have access to one of those plans, given all the work you've done in the past several years. And then with that, what does that back-to-base motion look like as you try and upsell some of these customers to your elite plan?

[Alan Taylor, executive]

So, I'll start. Alex, about 10% of our customers are now on a non-integrated product. And so, we continue to penetrate into that, given these integrations, and it opens that up. And so the upsell team can then take that as soon as that integration is done. Give them a call, describe what now can be accomplished, including just the call pop feature, depending on the level of the integration. Obviously, we read from that integration. In some cases, we have the write-back capability for appointment reminders and with deep enough integrations, obviously, we can go clear through to payments. So, that upsell motion becomes fairly compelling given the new integrations, and that the process is really one through our upsell team to dig in there.

[Brett White, executive]

Yes. I would add, Alex, that in addition to new integrations, we've spent a lot of time deepening integration. So, a customer may be on just a base Weave package. But as we add deepened integrations, then other upsells, other higher-end bundles become much more interesting to them because they just work better as we deepen an integration. So that'd be one point.

And then the second point is events. One thing we found is, when we're in an event, and we put up a banner that says, now integrates with XYZ PMS, we get a lot of interest and a lot of activity. So, it's not really an upsell, but it is taking prospects who are interested in Weave but haven't yet pulled the trigger because we didn't have the integration, it makes that a much more compelling opportunity for them.

[Alexander Sklar, analyst]

Okay. Great color on that new logo piece too. And so, it sounds like probably more than 10%, like in terms of the upsell opportunity, but the customers that are not on integrated products are 10%. But this is more than just the integration of the upsell. Is that right?

[Brett White, executive]

That's right.

[Alexander Sklar, analyst]

Okay. And then, just as a follow-up, I want to ask, kind of following up on Parker's first question, but just in terms of top-of--funnel growth, and you've got the more formal expansion into specialty medical now, that TAM is larger than your other ones you talked about. How is that top of funnel kind of lead-gen tracked relative to your overall kind of 20% top line growth? And where have kind of been the biggest incremental lead gen successes over the last year?

[Brett White, executive]

So, lead gen continues to grow. We've got strong performance over the -- definitely over the last 6 months on generating new leads in our now 4 core verticals. Dental continues to be our largest. That's the largest part of our -- in just sheer numbers, largest part of our install base, largest source of leads, largest number of new customers closed.

But I would say we're fairly well distributed on lead gen versus kind of our install base, with the exception of medical. Medical is much stronger on a kind of percentage of growth and just number of leads relative to the base perspective.

[Operator]

The next question is from Brent Bracelin from Piper Sandler.

[Brent Bracelin, analyst]

I guess, Brett, I want to start with just the demand trends in the quarter. Subscription and payment revenue, looks like it was up the most sequentially, over $3 million here in well over 3 years. What's driving the strength here? Again, it was pronounced increase here sequentially. What drove the upside this quarter?

[Brett White, executive]

Sure. So it was on multiple fronts. Sales is doing quite well. We've been building on our sales momentum. We had a good quarter. I think it was -- I think this quarter, we closed more new sales than previous quarters or certainly in the previous couple of quarters. So I would say, new customer acquisition has been growing, So, that's good news.

Alan mentioned that we did some price adjustments this quarter, and we do them pretty regularly for the last several years, but we have price adjustments this quarter over certain kind of cohorts, product types, customers, et cetera. And then payments did well. We had a nice payments growth. We had a bit of expansion in our net take rate. Anything else?

[Alan Taylor, executive]

I think those are the key elements, yes.

[Brent Bracelin, analyst]

Helpful color there. Just as we think about the [Indiscernible] the business, particularly against a macro environment, certainly not getting any better. So it does sound like it's a lot of it is internal, got execution stuff that's working for you. I wanted to double-click into the Patterson Dental relationship and what changes. You've had a relationship there. It seems like there's something new and just trying to better understand what that means tapping into that sales force team? What does it do? Is this a strategic relationship that might blossom into incremental net new ACV build next year? Could you start to see things earlier? Any sort of additional details on what that means to the business and the opportunity would be helpful.

[Brett White, executive]

Sure. So, we are really, really excited about the traction we're getting on the partnership side. Every quarter, I stand up in front of the team and I talk about the things that get me excited. And for the last couple of quarters, partnerships has definitely been in it. Historically Weave has not been super, I would say, not partner friendly, but we haven't really gone out of our way to establish an additional channel and partnerships.

And we decided about a year ago that we just wanted to kind of change our approach and establish win-win partnerships with the PMS providers. And so we sat down and we talked about all the opportunities and how we really were interested in win-win. And we hired a new head of channels, very clever guy, in December and really just started working with these PMS providers to figure out how we could win together.

And we hashed out a deal end of last year with Dentrix and Dentrix Ascend and then we closed this deal with Patterson, and it's terrific. We're going to market together. They -- Patterson has a Weave/Fuse. Fuse is their enterprise cloud solution. They have a Weave-Fuse bundle that they're selling. They're calling on about 100,000 locations and customers. So they're now calling into that with the Weave Patterson bundle.

And also, they're sharing leads with us. They're sharing opportunities with us. So really collaborating on selling Weave and Patterson together because it just really is 1 plus 1 equals 3 for the customers. And as far as getting traction, we actually sent a team to their national sales kickoff in June, trained their salespeople. Their salespeople are excited about it. We're already getting leads sent over. We've got deals signed. We've got ARR added already kind of from June to today. So it's off to a positive start, and we hope to have more partnerships with practice management software providers like this going forward.

[Brent Bracelin, analyst]

Great. Well, it sounds like that partner channel is really starting to blossom for the company. So great to see.

[Operator]

The next question is from Mark Schappel from Loop Capital Markets.

[Mark Schappel, analyst]

Nice job on the quarter and the guide. Brett, it's been a couple of quarters now since I think you brought on board new sales leadership, and often when such leadership comes on board, that typically means sales changes or changes to the sales team. I was wondering if you could just give us an update on whether there have been any meaningful changes to sales recently that could be helping drive the upside here?

[Brett White, executive]

I would say, the changes that are being -- so this is David McNeil, who joined, and he's a very thoughtful person. Spent a lot of time getting to know the people, how the business works. We're a very unique animal, and then bringing to bear his lessons learned, his experiences on how we can do better. So I would say the changes that have occurred have been small. So, very small, incremental changes, just making observations, making tweaks, making improvements. We're strong believers here that if you just do a little bit better, 1% to 2% a month, it adds up over time. And he's taken a very thoughtful approach.

One of the motions that he's been very involved with is really getting our middle market business up and running. Historically -- we have a very small group there, and historically, we just haven't had a great, specific middle market, multi-location product to sell. So, he spent a lot of time working with sales leadership, ideating on what's the right structure, developing that model for that team.

And so now that we actually have a product that works really, really well for that segment, I think we're well positioned to grow there. He's provided a lot of support to the inbound and outbound leadership. They're cranking away. So, overall, I would say, kind of providing ideas, thoughts, leadership, and just opportunities for incremental improvement, but no big dramatic changes.

[Mark Schappel, analyst]

Great. And then secondly, last year, Boomerang customers returning to the Weave platform, were a big part of the Weave story. And I was wondering if there's anything to report on that front this quarter.

[Brett White, executive]

Yes, it continues -- the quantities continue at the same rate. I mean, we stopped reporting it because it was basically the same number plus a little bit more. But that phenomenon still occurs. We have -- a competitor will call in, and they'll say, "Hey, we can do everything Weave can do for $100 less a month." And the customer says, "That sounds great." And they quit and they go there and then they come right back because they find out that they just don't have the functionality, the depth of integration, the quality of the Weave solution. So that phenomenon is continuing.

[Operator]

The next question is from Tyler Radke from Citi.

[Kylie Towbin, analyst]

Hi, this is Kylie on for Tyler. Congrats on the quarter. And I guess I'll start off with, you raised the full year more than [Indiscernible]. I'd love to hear what gives you the better visibility into the second half? And any comments on the macro changing relative to last quarter?

[Alan Taylor, executive]

Yes. Kylie, thanks for noticing. It is an important aspect of the business. We were on 10 consecutive quarters of being able to meet and exceed our guidance and we take that seriously providing guides that we have a high conviction around. So it's just indicative of the fact that the business is executing well. The sales performance has been good. It continues to be incrementally better, as Brett mentioned. And so, we're confident in being able to roll that through and do so with high confidence.

On the second thing regarding macro trends, they're out there. But I think one of the things that is unique to our small businesses are that dentists, optometrists, veterinarians, the medical industries, they are very stable and reliable businesses. They are not subject to being -- going out of business at anywhere near the same rate as a typical SMBs. And so from a macro perspective, just overall, we still need to see our dentists, we still need to see our doctor. We need to take our dogs to the vet. And those things aren't as impacted by the macro trends largely as many others.

And so, that's really good news for us. And I really think it's one of the things that the market doesn't fully understand or appreciate about Weave is just the strength of the kind of customers and their resiliency through any kind of macro trends that may disrupt other segments of the economy.

[Kylie Towbin, analyst]

Understood. That's helpful. Next, I'd love to hear about any feedback you've had on the Call Intelligence product that you guys have released, and any margin comments you have on how that compares to the overall business and the attach rates you anticipate?

[Alan Taylor, executive]

So, Call Intelligence has been -- as we roll out these products, we continue to listen to customers and making sure that they are meeting all of the needs of these customers. Call Intelligence has some great promise. And as Brett mentioned, we have a better, more historical data than just about anybody else with respect to the calls, texts, and e-mails associated with our 15 years in the business. And so we're building out these models that allow us to train the AI so that we can show customers when calls are coming in, what their call patterns are, what the emotion is around these calls. And so, we're excited about where that's going to go.

It's still relatively early, and we continue to roll that out. And we believe, over time, this will become a very important aspect of how our customers really come to understand how their front desk is interacting with their patients and how they can improve that. And really, fundamentally, it's about making sure that every opportunity for revenue that comes in via a phone call is actually capitalized on.

[Operator]

The next question is from Mike Funk from Bank of America.

[Unknown Analyst]

This is Matt on for Mike. Great to hear about the revenue reacceleration in specialty medical. Would love some additional color on some of the other verticals? And more specifically, did any other verticals reaccelerate during the quarter or was it just specialty Medical?

[Alan Taylor, executive]

The reacceleration, with respect to the verticals, is across the board. Specialty medical is the fastest of those, given the new integrations that we've done in that space as well as just the uptake. So, we're pleased to see the revenue reacceleration kind of across the board.

[Unknown Analyst]

Got it. And then just one quick follow-up on Weave Enterprise. Anything on just the early learning and early reception since the launch? And then anything we should know in terms of the nuances in terms of the go-to-market plan?

[Brett White, executive]

Not a whole lot of insights since the launch. Sales cycles are -- for mid-market are much longer than for the single location SMB. So we are demoing it. Now we're kind of in full demo mode. This is the primary product. Well, it is the only product that we're pointing at our middle market opportunities and that pipeline continues to build. The interest in the product is high. When we show practice leaders, the functionality, the multitasking capability, they are -- they express sincere interest. So now we just need to continue to build the pipeline and close those deals.

Sorry, what was the second part of the question?

[Unknown Analyst]

Oh, just the nuances between the go-to-markets, which you address.

[Brett White, executive]

Yes. Yes, it's a totally different sales cycle. It's a different type of sales team. Yes, so that's -- there you go.

[Operator]

The next question is from Henry Dane from Goldman Sachs.

[Henry Dane, analyst]

Congrats on the great quarter, another great quarter. Just one for me. On NRR, another quarter of inflection to 97%. Can you just break down where that inflection is coming from just between attrition and upsell/cross sell and where investors could see that metric go in the future?

[Alan Taylor, executive]

Yes. Henry, thank you. We've seen our NRR as high as 105% in past quarters. We certainly think we want to get above 100% again. But the things that are driving that are kind of across the board. We don't break them out in a quantitative way, but it includes payments, it includes our upsells. As we mentioned, we're seeing products like forms and bulk messaging and insurance verification become a substantial part of the growing revenue streams that we have and that are available for upsell.

So those are the areas that we see coming on, and we continue to develop new ones. We -- Call Intelligence is in the works there. They will become, we're sure, a nice element of upsell. And those are the things that are driving that. So, it is a great inflection point. It's nice to see, and we intend for it to continue.

[Operator]

There are no further questions at this time. I would like to turn the floor back over to Brett White for closing comments.

[Brett White, executive]

Okay. Well, thank you all for joining the call, and thank you again so very much to the Weave team. I'm excited to continue to build on the progress that we've made to deliver improved outcomes for both our customers and our shareholders over coming quarters. Thank you.

[Operator]

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