Weave (WEAV) Q3 2025: Payments Revenue Doubles, AI Automation Expands Share in Specialty Medical
Weave’s Q3 saw payments revenue grow at more than double the company’s overall rate, fueled by AI-driven automation and deepening practice management system integrations. Specialty medical verticals and mid-market deals are unlocking new, durable growth vectors, while disciplined cost controls propelled record gross margin and positive free cash flow. With its AI receptionist and integrated payments roadmap, Weave is positioning itself as the essential operating platform for small and medium-sized healthcare practices.
Summary
- Payments Acceleration: Payments revenue grew at over twice the company’s total rate, signaling product-market fit in healthcare workflows.
- AI Automation Unlock: AI receptionist and Call Intelligence adoption are driving measurable patient engagement and operational efficiency.
- Specialty Medical Expansion: Record location adds and new EMR-integrated deals are cementing Weave’s foothold in high-potential healthcare segments.
Performance Analysis
Weave delivered strong Q3 results with revenue growth accelerating to 17.1% year-over-year, extending a 15-quarter streak of exceeding guidance. Gross margin reached a record 73%, up 15 points from IPO levels, reflecting improved cloud and hardware efficiency. Operating income and free cash flow both beat expectations, with $5 million in free cash flow and $1.7 million in operating income, highlighting the scalability of the model.
Specialty medical, which now delivers record location additions and remains less than 1% penetrated, is emerging as a transformative growth engine. Payments revenue more than doubled the overall growth rate, underpinned by new surcharging and bulk payments features. Net revenue retention normalized at 94% as the effects of last year’s price increase rolled off, while gross retention held steady at 90%.
- Specialty Medical Outperformance: Highest-ever location additions and a 600+ location deal highlight traction in this vertical, which is triple the size of legacy segments.
- Payments Momentum: Payments now account for less than 10% of revenue but are expanding rapidly through workflow integration and new automation features.
- Operating Leverage: G&A as a percentage of revenue dropped to 16%, providing the most year-over-year margin leverage and supporting profitability even as go-to-market investments continue.
Weave’s ability to balance growth and profitability is evident in its cash generation and margin expansion, even as it invests in AI and vertical expansion. The company’s focus on integrated solutions and automation is translating into both higher ASPs and improved retention in mature segments.
Executive Commentary
"Weave is uniquely positioned to lead in this next phase of transformation. Our scale, brand, and deep expertise in SMB healthcare gives us an advantage. Our platform is differentiated by our authorized integrations with leading practice management systems. In an environment where lawsuits are putting unauthorized integrations at risk, Weave's secure architecture and HIPAA compliant infrastructure gives practices confidence and peace of mind."
Brett White, Chief Executive Officer
"Specialty Medical, where we are still less than 1% penetrated, grew more in Q3 than in any previous quarter as it continues to ramp. Payments revenue again grew more than double our total growth rate. Gross revenue retention held steady at 90% in Q3. Net revenue retention was 94%."
Jason Christensen, Chief Financial Officer
Strategic Positioning
1. Payments as a Platform Differentiator
Payments revenue is scaling rapidly, driven by features like surcharging and bulk collection that address real-world pain points for multi-location practices. Integration with practice management software—via authorized APIs, which are secure and compliant—sets Weave apart from both legacy and newer SaaS competitors. The roadmap includes tighter automation with Trulark, aiming to embed payments into AI-powered workflows for collections, insurance verification, and outbound invoicing.
2. AI Automation and Workflow Integration
Weave’s AI receptionist and Call Intelligence tools are moving from pilot to core product, with tangible results: a 25% increase in new patient volume at a major dental group and $320,000 in new appointments booked in a single quarter. The AI receptionist automates after-hours scheduling and answers routine queries, freeing staff for higher-value patient engagement. Upcoming releases will deepen voice capabilities and unify human and automated interactions, creating a single conversation thread across channels.
3. Specialty Medical and Mid-Market Expansion
Specialty medical verticals are now the fastest-growing engine, with record location additions and a new 600+ location group win through an EMR partnership. The company’s programmatic integration strategy—targeting the largest practice management systems first—drives higher ASPs and retention, creating a flywheel of upsell opportunities as integrations roll out. Mid-market deals are increasingly diversified beyond dental, with strong pipeline visibility and early-stage penetration.
4. Customer Retention and Upsell Dynamics
Integrated solutions are driving higher ASPs and retention, as customers upgrade from non-integrated to integrated Weave offerings. Retention metrics, measured on a location basis, can mask the underlying strength in multi-location accounts, where logo-based retention would be higher. Early-stage verticals show higher churn, but management expects normalization as integrations mature and product-market fit deepens.
5. Disciplined Investment and Operating Leverage
Weave is managing a careful balance between growth and profitability, with targeted investments in go-to-market and engineering offset by G&A leverage. The company remains growth-biased, but year-to-date free cash flow improvements and record gross margin demonstrate an ability to scale profitably. Management signaled more color on 2026 investment plans in the next call, but the current trajectory suggests continued margin expansion is possible as automation and integrations scale.
Key Considerations
Weave’s Q3 highlights a business at the intersection of vertical SaaS, healthcare automation, and payments integration. The company’s approach to product development and go-to-market is unlocking new revenue streams and strengthening its competitive moat.
Key Considerations:
- Payments Integration Unlock: Embedding payments into communication workflows is driving both revenue mix shift and customer stickiness.
- AI Productization: AI receptionist and Call Intelligence are moving from pilots to scaled adoption, delivering measurable ROI for practices.
- Specialty Medical Penetration: Less than 1% penetration in a segment triple the size of legacy verticals represents significant white space.
- Retention Nuance: Location-based retention metrics may understate loyalty in multi-location accounts, while churn in new verticals is expected to normalize as integrations mature.
- Margin Expansion Path: G&A leverage and disciplined investment are enabling margin improvement even as strategic growth bets continue.
Risks
Key risks include competitive pressure from both legacy processors and emerging SaaS platforms, especially as payments becomes a larger revenue contributor. Churn in early-stage verticals and the challenge of scaling integrations across a fragmented EMR landscape could pressure retention and sales efficiency. Regulatory shifts or security breaches could erode Weave’s compliance advantage, while macro headwinds in healthcare spending or staffing could slow adoption in core SMB segments.
Forward Outlook
For Q4 2025, Weave guided to:
- Total revenue of $62.4 million to $63.4 million
- Non-GAAP operating income of $1.5 million to $2.5 million
For full-year 2025, management raised guidance:
- Total revenue of $238 million to $239 million
- Non-GAAP operating income of $3.3 million to $4.3 million
Management emphasized continued momentum in specialty medical and payments, with AI product launches and new integrations expected to drive further automation and revenue expansion in coming quarters.
- Payments workflow automation and Trulark integration remain top priorities
- Further margin leverage is expected as automation scales and G&A efficiency improves
Takeaways
Weave’s Q3 results underscore a shift toward higher-value automation and payments integration, with specialty medical and mid-market expansion providing durable growth vectors.
- Payments and AI Are Now Core Growth Engines: Double-digit payments growth and expanding AI automation are reshaping Weave’s revenue mix and competitive positioning.
- Specialty Medical Is the Next Frontier: Record location adds and EMR-driven deals point to significant untapped opportunity and a replicable integration playbook.
- Margin and Cash Flow Trajectory Remain Positive: Operating leverage is emerging even as targeted investments continue, suggesting scalability and improving profitability as automation deepens.
Conclusion
Weave is executing on a disciplined, high-ROI growth strategy, with payments and AI automation increasingly central to its value proposition. Specialty medical and mid-market wins validate the platform’s scalability, while margin expansion and cash generation provide a foundation for continued investment and innovation.
Industry Read-Through
Weave’s results highlight a broader shift in vertical SaaS toward embedded payments and workflow automation, especially in healthcare where integration and compliance are critical. The rapid adoption of AI-driven front-office automation signals rising demand for intelligent, always-on patient engagement, a trend likely to influence both legacy and emerging SaaS providers across healthcare and other regulated verticals. Payments integration as a differentiator suggests that vertical SaaS companies with deep workflow ownership will have an advantage over horizontal platforms and legacy processors.