Weave - VC Overhang Ends, Revenue Acceleration Begins

1.8x EV/sales for SaaS platform with 15-20% growth outlook & 15+% FCF margin within 8 quarters.

Weave (NYSE:WEAV) is a communication & payments SaaS platform trading at 1.8x ‘26e EV/sales despite clear line of sight to 15%-20% revenue growth and 15+% FCF margins within two years.

Here are the key takeaways:

-Weave has a clear path to durable 15-20% revenue growth.

-More than half of new locations now come from non-dental verticals where Weave faces limited competition.

-Weave launched their multi-location Enterprise product in 2h24. A ramping 1h25 sales motion should translate into early wins in 2h25 and could drive growth >20%.

-TrueLark AI upsell can drive NRR from high 90s to ~105%.

-Weave is already at FCF breakeven and on track to reach a 15+% FCF margin within eight quarters. I expect a full-year FCF margin in that range for 2027.

-Weave CEO Brett White ran a similar payments + upsell playbook as COO/CFO of Mindbody, which sold to Vista for 7.2x EV/sales in 2018.

-Weave’s stock has been depressed by the heaviest VC distributions I’ve seen in our universe: ~23% of shares outstanding or ~17m shares in the last few quarters. That forced selling appears largely complete.

I think the stock will clear at $13-$15/sh in November 2025 as multi-location growth plays out in 3q25 and the 4q25 guide, >$16/sh in mid 2026 as the FCF margin becomes visible, and >$20/sh in 2027 as the company prints a high-teens FCF margin.

Weave should trade >4x EV/sales and >25x FCF as their margins ramp. Management may host an investor day in the next year, which would clarify this story to the market and likely pull these returns forward.

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1. Non-dental expansion drives the next leg of location growth.

2. Multi-location Enterprise SKU + Patterson partnership should sustain dental gross bookings.

3. Payments attach should drive payments to >20% of total revenue.

4. TrueLark upsell should drive NRR to 100-105%.

5. Conservative guidance, executive turnover, and VCs selling >20% of shares outstanding created today’s opportunity at 1.8x EV/sales.

6. Addendum. Mindbody proves the playbook, but no PE exit is required for the thesis to work.

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1. Non-dental expansion drives the next leg of location growth.

Weave is a combined patient engagement + phone + payments SaaS product for medical offices. The software displays patient profiles when calls come in (“call pop”), facilitates text-to-pay collections, texts patient reminders to visit, and assists with insurance verification & a dozen other outreach tasks. Weave is integrated into backend ERPs (e.g. Dentrix & Patterson in dental) and is expanding writeback capability for scheduling and payments.

Weave competes with a patchwork of point solutions (e.g. Verizon phone + Podium), other patient engagement products (Revenuewell, Lighthouse, Adit, Solutionreach, Birdeye, NexHealth), and native ERP add-ons. Weave is the largest and most established vendor in their space.

Weave bundles more features than competitors and charges new customers ~$750/month. Rivals charge slightly less but offer narrower feature sets and weaker backend integrations. A typical medical provider wants a full schedule of patients with as little effort as possible, so even a handful of extra appointments each month can deliver an attractive ROI.

How is Weave differentiated?

-G2 ranks Weave #1 in their software category. In particular, Weave is praised for simple bulk texting, missed call auto-texts, and analytics with new LLM features to flag call content (e.g. “new patient”, “called for X reason”, “was unhappy about Y”).

-Weave supplies the phone hardware, so tight integrations enhance the call pop functionality and enable texts directly from the provider’s office phone number. Most competitors use a third-party phone and can only send messages from six-digit short codes.

-Text-to-pay. Most dentists have $10k/year of uncollected debts, largely comprised of $25-$50 unpaid co-pays. Other medical providers that accept insurance are in a similar position. Text-based reminders materially outperform letters and emails to drive collection rates. Weave’s text-to-pay comes from the office number and is optimized for conversion.

-Weave partners with the ERPs to write back into the practice management system. ERP authorization is critical. Competitors like NexHealth offer similar writeback functionality by hacking the ERP without permission – which voids the customer’s contract & may be subject to litigation.

-Weave launched Weave Enterprise for multi-location practice groups in 2h24. Key features include multi-office call trees, team chat, centralized payments management, and analytics. Multi-location practice groups make up >50% of the available location TAM.

The company was founded in 2008 as Recall Solutions, became a Y Combinator startup, and IPO’d in the heyday of 2021.

Weave’s growth began with small dental offices, and dental was the core growth engine through ~2022. Dental is the easiest market to start in. A new software player can cover the majority of the market by integrating with a few large practice management systems (Dentrix, Patterson Eaglesoft/Dolphin, Open Dental, Curve). As single-office dental became more competitive, Weave expanded into non-dental verticals.

Weave builds pipeline by meeting office managers at conferences, sending outbound messages, and fielding inbound requests driven by online marketing. Post-IPO covid lockdowns shut down the conference channel and drove heavy sales team attrition.

New CEO Brett White, previously COO/CFO of Mindbody, took over in October 2022 and rebuilt the sales team. Mindbody is a practice management system for yoga & wellness studios; White was CFO and later COO when Mindbody was private => IPO => acquired by Vista in 2018 for 7.2x EV/sales.

Brett White’s playbook to grow Weave to $500m in revenue is as follows:

-Build integrations into non-dental ERPs to expand into less competitive markets. Non-dental locations are now >50% of new location adds each quarter.

-Partner with integrated ERPs to surface high conversion leads and improve sales efficiency. Weave’s partnership with dental PMS Patterson is the first of these to come.

-Create a multi-location product to win higher retention enterprise customers. Weave Enterprise launched in 2h24.

-Increase payments attachment, eventually driving payments to >20% of revenue. Payments were >1/3 of Mindbody’s revenue at acquisition; payments are <10% of Weave’s revenue today.

-Buy/build upsell products to drive net retention from ~100% to 105%-110%. Recent acquisition TrueLark is the first piece in that puzzle.

Weave currently serves the following verticals:

Non-dental is the new growth driver. Unlike dental, non-dental ERP market share is fragmented. Integrating with the majority of these ERPs is essential to success in these verticals. Weave built this coverage over the last few years and is working to widen their lead. Former reps report “virtually no competition for Weave” in these non-dental niches. Weave is pursuing alliances with non-dental ERPs to cement the dominant position.

In sum, I think the market does not appreciate that Weave has secured a multi-year runway in low-competition verticals. The story of 2024-2025 is repositioning the salesforce away from competitive single-office dental and into multi-location & non-dental.

Below is a model for how non-dental verticals will drive the next few years of growth.

Here is Weave’s path to >15% FCF margins:

-15%-20% revenue growth (low-mid teens locations + land at higher ARPU + payments attach + TrueLark upsell).

-Gross dollar retention remains >90% (dental likely low 90s, non-dental likely high 80s until Weave builds out more non-dental ERP integrations).

-High teens to low 20s gross profit growth as mix shifts to include more payments + TrueLark.

-Operating expense leverage because 2025 opex is frontloaded with the new enterprise sales team and TrueLark buildout.

-Improved FCF conversion as multi-location customers drive a larger share of billings from monthly to annual terms.

Weave has spoken obliquely about non-dental location growth thus far (perhaps to ward off competition), so the model below is our best internal estimate. 2027 acceleration should be driven by a multi-location ramp. An investor day in the next twelve months should clarify this story.

2. Multi-location Enterprise SKU + Patterson partnership should sustain dental gross bookings.

Weave has two ways to maintain dental gross bookings as the salesforce shifts toward non-dental opportunities.

Both of these should improve the ratio of (# of new locations added) / ($ of sales & marketing spend).

First, Weave struck a co-selling deal with Patterson, one of the largest dental practice management systems.

As Patterson sales reps visit customers, they can earn quota by selling Weave to their customers. Think of this as a target-rich leadgen effort. Brett White commented at a conference that these Patterson leads made Weave salespeople about twice as effective per contract booked. Weave is looking to partner with other practice management systems to drive similar leadgen deals.

Second, Weave launched their Enterprise product in the second half of 2024:

Multi-location is a potential step-function boost to Weave’s location growth. >50% of Weave’s office TAM lies within multi-location groups.

Multi-location customers have two attractive features relative to the current customer set:

1. PE rollups make up a significant piece of the multi-location TAM. These rollups intend to grow quickly through acquisition. So if Weave wins a 40-unit chain aiming to grow to 200 units, Weave may get an incremental 160 locations for no incremental CAC.

2. These rollups are more likely to adopt high ROI upsells, so they should be higher gross retention and net retention than the current base.

Weave actually won a 370-unit customer in 2022 on the legacy product. But the new Enterprise product is tied specifically to the needs of multi-location managers – think multi-office phone tree logic, centralized analytics, centralized payments, security, and permissions.

From speaking with former reps, Weave’s first enterprise team had little industry experience and did not achieve their bookings goals. In late 2024, Weave fired this team and brought in a new set of enterprise reps with experience at healthcare practice management systems like Dentrix.

This new enterprise team is already delivering. In October, Weave won Affordable Care, a 400-location DSO for tooth replacement.

Here’s the upshot: The new enterprise team’s 1h25 pipeline should start converting into bookings in the second half of 2025.

Weave’s growth ceiling could be much higher than appreciated if they nail this opportunity set.

3. Payments attach should drive payments to >20% of total revenue.

Payments are a high 90s contribution margin upsell for Weave.

Weave pays a wholesale buy rate to Stripe, takes a net spread, and then sells the merchant-facing rate. (This may be contracted as a rev share, but it’s effectively the same setup.) In doing so, Weave takes limited credit risk and gets to sell Stripe’s new offerings with minimal R&D outlay.

Payments estimated breakdown:

-A typical dentist may generate ~$800k in annual volume, which is ~50% insurance / 50% addressable credit card spend.

-The average Weave practice has more than 1 dentist, so let’s call it $500k in addressable payment spend/location. Weave captures most but not all of addressable TPV at attached customers because some offices have a separate in-person POS.

-Weave’s net take rate is probably 40-50 bps.

-So back of the envelope, payments attach to ~30% of existing locations and contribute ~8% of total revenue.

Payments revenue can accelerate by (1) adding higher TPV customers such as specialty medical and (2) negotiating buy-rate volume discounts as TPV grows. The latter can be a material boost because a 10 bps buy-rate volume discount could bump the entire payments stack from a 50 bps to a 60 bps net spread (i.e. a 20% increase once Weave hits that higher volume tier). Payments should cross >20% of total revenue within five years.

Weave’s payments advantage stems from text-to-pay messages that originate from an office’s phone number and auto-reconcile to the practice management ledger. New 10DLC rules may help rivals mimic texts from the office number, but Weave should maintain an edge on payment conversions and writebacks. Payments reconciliation is another integration race: Weave covers the most systems and is closest to fully automated reconciliation, whereas most peers require manual matching.

A larger opportunity may lie in collections management. If the typical practice has >$10k uncollected debt per year (mostly in $25-$50 copay increments), then the average practice may have ~$100k in total uncollected debt. Weave sits in a unique position by connecting the customer contact list to payments and to the practice management system. Some percentage of uncollected debts are simply too inconvenient to pay, not a real customer solvency issue; Weave text-to-pay could make a material difference in those cases. Per our diligence, what really sold the Affordable Care multi-location win was Weave’s collections.

Weave recently launched a dedicated payments team and is making a major push for payments adoption in 2025.

4. TrueLark upsell should drive NRR to 100-105%.

Last month, Weave acquired TrueLark for $35m ($25m cash + $10m stock + earnout).

TrueLark is a virtual LLM receptionist that handles scheduling and client support 24/7. After-hours bookings help practices fill their books for no effort. This is an obvious LLM use case, but the real differentiation stems from tuning the model to book appointments in specific practice areas based on their individual guidelines.

TrueLark actually beat Weave in a 2024 RFP for a large customer that expanded to $1m in spend. That customer reported a 2x ROI in 12 months from after-hours scheduling and internal call center efficiencies.

The TrueLark upsell should be a 20%-30% uplift to Weave ARPU. A success-based pricing model (e.g. $X per incremental appointment) could drive rapid adoption across the installed base -- who wouldn’t want extra appointments booked for no additional effort?

Weave is currently in the ~100% NRR camp (low 90s gross retention + small price increases + small forms & payments upsells). TrueLark is the first legitimate upsell Weave has had to drive NRR >100%.

I’d also flag Weave’s new Partner Marketplace. Weave is following a common strategy to become a distribution channel for point solutions to cross-sell into. It’s early, but this may become a source of NRR expansion and a pipeline for future acquisitions.

5. Conservative guidance, executive turnover, and VCs selling >20% of shares outstanding created today’s opportunity at 1.8x EV/sales.

Given this background, you may be asking why Weave is available to invest in at <2x ‘26e EV/sales.

I think there are three reasons.

First, Weave guides revenue growth conservatively. They initially guided 14.9% growth for 2024 and hit 19.9% for the year. In February 2025, they guided 14.7% growth for 2025, below sellside consensus. The stock took a hit. In May 2025, they guided up opex for the TrueLark investment in sales & onboarding, and they didn’t guide up revenue along with it. The TrueLark revenue boost will probably come in 4q25/1q26, but the market interpreted this as weak opex control. The stock took another hit.

Both reactions appear unwarranted.

Second, longtime CFO Alan Taylor retired at the end of Q1, and CPO Branden Neish left in May. A new CFO was promoted from VP Finance, and they promoted their COO and hired a new SVP of Engineering to cover product. Weave has a solid bench of management talent, but executive turnover can always give investors pause.

Third, Weave has absorbed the heaviest VC turnover I’ve seen in our universe. ~23% of total shares outstanding were distributed/sold by old VCs & secondaries funds in the last three quarters. That’s ~17m shares among Bessemer, Catalyst, Crosslink, Pelion, and W Capital. I read these as nonfundamental sales by end-of-life funds.

Large blocks were bought up by exactly the long-term shareholders you’d want to see. Fidelity now owns ~14% of Weave and Wasatch another ~7%. But remaining distributed shares are likely weighing on the stock.

Crosslink still owns ~7m shares and Pelion ~3.5m, so that’s a risk worth watching. But both distributed last when Weave was trading ~$17/sh. My read is that both will wait for higher prices to sell again.

In sum, I think the window for a rerating begins when 3q25 results confirm the durability of 15-20% revenue growth.

Continued non-dental success + the early innings of multi-location growth + a hint at the TrueLark upsell + no more VC distributions should take this stock out of the penalty box.

6. Addendum. Mindbody proves the playbook, but no PE exit is required for the thesis to work.

Mindbody, a system of record & payments provider for yoga & wellness studios, sold to Vista for 7.2x EV/sales in 2018. Weave CEO Brett White was Mindbody’s COO/CFO throughout this process.

Compared to Mindbody, Weave sells a similar product with a similar sales motion to similar customers. Weave’s payments upsell playbook looks almost identical. And yes, Brett White is in his early 60s and may want an exit at some point.

I do think a sale to private equity could happen but not in the near term.

First off, Crosslink and Pelion are on the board and wouldn’t have distributed shares if they thought Weave was about to sell at a premium.

Second, Weave will be a much more attractive PE candidate when the non-dental + multi-location + payments motions take off. Right now, Weave would be selling at the lows, before the public markets have given credit for these growth vectors and for incoming FCF generation.

Could Weave achieve a 7x EV/sales valuation like Mindbody?

It’s a reasonable upper bound for a bull case. Interest rates were lower in 2018, but revenue growth is scarcer in today’s market. If Weave can nail the multi-location & payments motions to drive durable >20% growth, Weave should attract significant investor interest. Weave may also need to drive NRR >105% before investors think of the company in this quality bucket.

To achieve that 7x EV/sales valuation, there would also be a debate about Weave’s terminal uFCF margin. Mindbody guided public investors to a long-term >30% EBITDA margin and ~30% uFCF margin – though a Vista cost-cutting program might do better. If Weave improves sales rep efficiency with PMS-referred-leads + non-dental + multi-location, drives payments to >20% of total revenue, and creates a 105% NRR motion with TrueLark + future upsells, a 30% uFCF margin seems achievable.

But nothing like that blue sky bull case is needed for the stock to work from here.

1.8x ’26e EV/sales is a broken valuation for a SaaS business growing high teens with a clear path to 15%-20% FCF margins within 8 quarters.

As Weave’s improved sales motion shows early results in the second half of 2025, I expect investors to rerate the stock closer to fair value.

Disclaimer: this is not financial advice or an offer of any kind. Do your own diligence. Any risk you take is your own, and we do not warrant the accuracy of anything written here. Assume we are invested in any securities mentioned & may make trading decisions without updating this note.

Please feel free to reach out here or @parisanalyst on X.

Credit to my business partner for leading the diligence work on this one.