You should read the following discussion of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Readers are cautioned that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified below, under Part II, Item 1A. “Risk Factors,” and elsewhere herein. Therefore, our actual results could differ materially from those discussed in the forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason. In this Quarterly Report on Form 10-Q, unless otherwise specified or the context otherwise requires, “Weave,” the “Company,” “we,” “us,” and “our” refer to Weave Communications, Inc. and its wholly-owned subsidiaries. Overview Weave is a vertical Software-as-a-Service (“SaaS”) platform that delivers AI-powered patient engagement solutions for small and medium-sized (“SMB”) healthcare practices. Our platform is designed to help the practices manage the complete patient lifecycle by automating administrative patient-facing workflows across pre-care, clinical, and post-care operations. Recognizing that most of these workflows originate from or terminate through a phone call or message, we believe we have significant operational advantage by owning the full telephony and communication stack. We have embedded AI technology into the platform to function as an "always-on teammate" for practice staff, autonomously fulfilling daily tasks. By leveraging this always-on teammate to handle repetitive duties like answering routine questions, scheduling appointments, and managing payment processing, these solutions reduce front-office interruptions and allow clinical staff to focus on face-to-face patient care. Our platform ensures seamless patient care by unifying conversational context across voice and text channels into a single inbox, blending AI agents and staff actions. The platform is built on nearly two decades of domain expertise and billions of patient interactions, allowing us to leverage our vertically specialized data to deliver high-accuracy automation within strict privacy and regulatory frameworks. We continue to focus on reducing administrative burdens for healthcare practices through agentic AI, embedded automation and real-time operational insights. Supplemental Financial Information — Disaggregated Revenue and Cost of Revenue To supplement our discussion of our consolidated results of operations, we have separated our revenue and cost of revenue into recurring and customer onboarding categories to disaggregate revenue and costs of revenue that are one-time in nature from those that are term-based and renewable. We generate revenue primarily from recurring subscription fees charged to access our platform, which also includes embedded lease revenue on phone hardware. These recurring revenues accounted for 90% and 91% of our revenue the three months ended June 30, 2026 and 2025, respectively and 90% and 91% for the six months ended June 30, 2026 and 2025, 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. We also derive revenue associated with installation fees for onboarding customers. We utilize our onboarding services and phone hardware as customer acquisition tools and price them competitively to lower the barriers to entry for new customers adopting our platform. As a result, the variable cost associated with providing phone hardware and onboarding assistance has historically exceeded the related revenue, resulting in negative gross profit for each. The revenue and related costs associated with 23 Table of Contents onboarding new customers are primarily associated with the initial setup of a customer’s software and phone system. Revenue on phone hardware provided to our customers, deemed embedded lease revenue, is recognized over the related subscription period. The associated costs, which primarily represent depreciation expense on phone hardware financed under finance lease arrangements, are incurred over the useful lives of the phone hardware, which is 36 months. We consider the net costs of onboarding and phone hardware, in addition to our sales and marketing activities, to be core elements of our customer acquisition approach. The table below sets forth the revenue and associated cost of revenue for our recurring subscription and payment processing services, as well as for our onboarding services and phone hardware: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (dollars in thousands) Subscription and payment processing: Revenue $ 64,590 $ 56,005 $ 127,152 $ 109,420 Cost of revenue (14,295) (12,590) (27,810) (24,671) Gross profit $ 50,295 $ 43,415 $ 99,342 $ 84,749 Gross margin 78 % 78 % 78 % 77 % Onboarding: Revenue $ 782 $ 833 $ 1,714 $ 1,721 Cost of revenue (2,657) (2,075) (5,231) (4,067) Gross profit $ (1,875) $ (1,242) $ (3,517) $ (2,346) Gross margin (240) % (149) % (205) % (136) % Phone Hardware: Revenue $ 2,170 $ 1,632 $ 4,176 $ 3,138 Cost of revenue (1,937) (1,854) (3,809) (3,645) Gross profit $ 233 $ (222) $ 367 $ (507) Gross margin 11 % (14) % 9 % (16) % Factors Affecting Our Performance Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our ability to attract new customers, retain and expand within our customer base, add new products, and expand into new industry verticals. Attract New Customers 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 practice management systems (“PMS”) and electronic health record (“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. 24 Table of Contents In addition to pursuing continued customer growth among small businesses, we pursue opportunities to expand our customer base among medium-sized businesses through sales of Weave Enterprise, which is designed for multi-location 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. Retain and Expand Within Our Customer Base 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. 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 the three months ended June 30, 2026 and 2025, respectively, and 78% and 77% for the six months ended June 30, 2026 and 2025, respectively. Add New Products We continue to add new products and functionality to our platform, broadening our use cases and applicability for different customers. In 2026, we introduced our omnichannel AI Receptionist built on Google Cloud's Gemini Enterprise Agent Platform, enabling practices to preserve conversation context across voice and text, configure intelligent routing, and escalate to staff when needed (“AI Receptionist”). In 2025, among other new products, we also delivered Weave Insurance Eligibility, which links directly to multiple dental insurance portals to retrieve detailed patient insurance information to provide patients a more complete view of their insurance coverage. We expect our future success in winning new clients to be partially driven by our ability to continue to develop and deliver new, innovative products in a timely manner, including those enabled by AI. The depth of our platform’s functionality is dependent upon both our internally-developed or acquired technology and our product partnerships and integrations. Expand to New Industry Verticals We believe we have built a flexible platform that encompasses the majority of the functionality needed for customer experience and engagement across industry verticals, and we have developed a repeatable playbook for assessing new industry verticals. We started in dental and have since successfully expanded to optometry and veterinary. Most recently, we entered the specialty medical industry vertical, which has quickly grown to be our second largest industry vertical by location count and remains our fastest growing. Entering a new industry vertical includes evaluating product-market fit and establishing key integration partnerships with the primary systems of record in that vertical. While we are focused on continued growth within our core specialty healthcare verticals and adjacent healthcare markets, we continue to evaluate additional expansion opportunities. 25 Table of Contents Key Business Metrics 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. June 30, 2026 2025 Dollar-based net revenue retention rate 92 % 96 % Dollar-based gross revenue retention rate 89 % 90 % Dollar-Based Net Revenue Retention Rate 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. AMR does not include revenue associated with contracts acquired through the May 2025 TrueLark acquisition, as the revenue on these contracts is not directly measurable on a per customer location basis. Since payments revenue represents the revenue we recognize on payment processing volume, which is reported net of transaction processing fees, we believe the three-month average appropriately adjusts for short-term fluctuations in transaction volume. To calculate our NRR, we first identify the cohort of locations, or the “Base Locations”, that were active in a particular month, or the “Base Month”. We then divide AMR for the Base Locations in the same month of the subsequent year, or the “Comparison Month”, by AMR in the Base Month to derive a monthly NRR. AMR in the Comparison Month includes the impact of any churn, revenue contraction, revenue expansion, and pricing changes, and by definition does not include any new customer locations under subscription added between the Base Month and Comparison Month. We derive our annual NRR as of any date by taking a weighted average of the monthly net retention rates over the trailing twelve months prior to such date. Dollar-Based Gross Revenue Retention Rate 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. Components of Results of Operations Revenue 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 26 Table of Contents concessions that apply ratably over the twelve-month subscription plan. As of June 30, 2026 and 2025, approximately 24% and 31% 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. In addition, we provide payment processing services and receive a revenue share from a third-party payment facilitator on transactions between our customers that utilize our payments platform and their end consumers. These payment transactions are generally for services rendered at customers’ business location via credit card terminals or through several card-not-present modalities, including “Text-to-Pay” functionality. Revenue from payments services is recorded net of transaction processing fees and is recognized when the payment transactions occur. We also collect installation fees for onboarding customers, the revenue for which is recognized upon completion of the installation. Our customers may directly engage with third-party independent contractors to configure phone hardware, install the software and assist with upgrades, for which we do not derive any revenue. Cost of Revenue Cost of revenue consists of costs related to providing our platform to customers and costs to support our customers. Direct costs associated with providing our platform include data center and cloud infrastructure costs, payment processing costs, amortization of finance lease right-of-use assets on phone hardware provided to customers, fees and revenue shares to application providers, voice connectivity and messaging fees, and amortization of internal-use software development costs and acquired technology. Indirect costs include personnel-related expenses, such as salaries, benefits, bonuses and stock-based compensation expense, of our onboarding and customer support staff. Cost of revenue also includes an allocation of overhead costs for facilities and shared IT-related expenses, including depreciation expense. Our acquired technology represents developed technology in our unaudited condensed consolidated financial statements, which is measured at its estimated fair value and is being amortized over its estimated useful life, which is five years. As we acquire new customers, and existing customers increase their use of our cloud-based platform, we expect that the dollar amount of our cost of revenue will continue to increase. However, our cost of revenue has been and will continue to be affected by a number of factors, including increased regulatory fees on text messaging and phone calls, the quantity and aging of phones provided to customers, changes to fees paid to application providers, adoption of AI-based features, future changes to the cloud infrastructure costs to support our product offering, our stock-based compensation expense, and the timing of the amortization of internal-use software development costs, which could cause it to fluctuate as a percentage of revenue in future periods. Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation and sales commissions. Operating expenses also include allocated overhead costs for facilities and shared IT-related expenses, including depreciation expense. Sales and Marketing Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing staff, including salaries, benefits, sales commissions, bonuses and stock-based compensation. Sales commissions paid on new subscriptions to our software, phone, and payments services are deferred and amortized over the expected period of benefit, which is determined to be three years. In addition to personnel-related expenses, marketing expenses consist of lead-generating and 27 Table of Contents other advertising activities, as well as the cost of traveling to and attending trade shows. Sales and marketing expenses also include acquisition-related amortization expenses. Our acquired customer relationships, trademarks, and trade names are measured at their fair values and are amortized over their estimated useful lives, which are seven years. 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. Research and Development Research and development expenses include software development costs that are not eligible for capitalization and support our efforts to ensure the reliability, availability and scalability of our solutions. Our platform is software-driven, and its research and development teams employ software engineers in the continuous testing, certification and support of our platform and products. Accordingly, the majority of our research and development expenses result from employee-related costs, including salaries, benefits, bonuses, stock-based compensation and costs associated with technology tools used by our engineers. We expect that our research and development expenses will increase as our business grows, particularly as we incur additional costs related to continued investments in our platform and products. However, we expect that our research and development expenses will remain relatively consistent as a percentage of our revenue over time, although there may be fluctuations from period to period. In addition, research and development expenses that qualify as internal-use software development costs are capitalized and the amount capitalized may fluctuate significantly from period to period. General and Administrative 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. We expect that our general and administrative expenses, including expenses for insurance, investor relations and fees for professional services, will increase in absolute dollars as our business grows but will decrease as a percentage of our revenue over time. Interest Income Interest income consists primarily of interest earned on our cash, cash equivalents, and short-term investments. Interest Expense 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 the greater of prime rate less 0.25% or 3.50%. Interest on finance leases is based on the lease’s readily determinable rate implicit within the lease agreement. For those leases which do not provide a readily determinable implicit rate, the Company estimates the incremental borrowing rate. Other Income (Expense), Net Other income (expense), net primarily consists of gains and losses on short-term investments, foreign currency transactions, and sublease income. 28 Table of Contents Provision for Income Taxes Provision for income taxes consists primarily of income taxes related to foreign and state jurisdictions in which the Company conducts business. The Company’s U.S. operations continue to generate losses and, as a result, the Company maintains a valuation allowance against substantially all of its U.S. deferred tax assets. During the three and six months ended June 30, 2026, the Company recorded income tax expense of $0.1 million and $0.2 million, respectively, compared to income tax benefits of $1.1 million and $1.0 million for the corresponding periods in 2025. The tax expense for the three and six months ended June 30, 2026 reflects income taxes in foreign jurisdictions where the Company generates taxable income, while losses incurred in the U.S. generally do not result in an income tax benefit due to the Company’s valuation allowance. Results of Operations The following table sets forth our unaudited condensed consolidated statements of operations data for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Revenue $ 67,542 $ 58,470 $ 133,042 $ 114,279 Cost of revenue (1) (3) 18,889 16,519 36,850 32,383 Gross profit 48,653 41,951 96,192 81,896 Operating expenses: Sales and marketing (1) (3) 27,397 25,245 56,148 48,771 Research and development (1) (2) 12,054 11,988 22,868 23,141 General and administrative (1) (2) (4) 13,588 14,904 27,585 29,490 Total operating expenses 53,039 52,137 106,601 101,402 Loss from operations (4,386) (10,186) (10,409) (19,506) Other income (expense): Interest income 346 435 718 898 Interest expense (420) (537) (789) (934) Other income (expense), net 335 471 687 971 Loss before income taxes (4,125) (9,817) (9,793) (18,571) Income tax provision (132) 1,106 (234) 1,035 Net loss $ (4,257) $ (8,711) $ (10,027) $ (17,536) 29 Table of Contents ______________ (1)Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Cost of revenue $ 167 $ 215 $ 333 $ 500 Sales and marketing 1,460 1,951 3,447 3,792 Research and development 2,065 3,018 4,122 5,380 General and administrative 3,342 4,068 6,262 8,565 Total stock-based compensation $ 7,034 $ 9,252 $ 14,164 $ 18,237 See Note 11 of the unaudited condensed consolidated financial statements for further details on stock-based compensation expense. (2)Includes acquisition transaction costs as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Cost of revenue 11 — 16 — Sales and marketing 15 — 24 — Research and development 7 93 216 97 General and administrative 153 754 191 1,124 Total acquisition transaction costs $ 186 $ 847 $ 447 $ 1,221 (3)Includes amortization of acquisition-related intangibles as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Cost of revenue 213 105 423 105 Sales and marketing 131 51 262 51 Total amortization of intangibles $ 344 $ 156 $ 685 $ 156 (4)Includes costs related to shareholder matter as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) General and administrative — — 829 — Total shareholder matter costs $ — $ — $ 829 $ — 30 Table of Contents The following table sets forth our unaudited condensed consolidated statements of operations data expressed as a percentage of revenue for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (percentage of total revenue) Revenue 100 % 100 % 100 % 100 % Cost of revenue 28 28 28 28 Gross margin 72 72 72 72 Operating expenses: Sales and marketing 41 43 42 43 Research and development 18 21 17 20 General and administrative 20 25 21 26 Total operating expenses 79 89 80 89 Loss from operations (7) (17) (8) (17) Other income (expense): Interest income 1 1 1 1 Interest expense (1) (1) (1) (1) Other income (expense), net — 1 1 1 Loss before income taxes (7) (16) (7) (16) Provision for income taxes — 2 — 1 Net loss (7) % (14) % (7) % (15) % Comparison of the Three Months Ended June 30, 2026 and 2025 Revenue Three Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Revenue $ 67,542 $ 58,470 $ 9,072 16 % Revenue increased by $9.1 million, or 16%, compared to the three months ended June 30, 2025. Approximately $7.5 million of our revenue growth was attributable to revenue generated from new customer locations acquired during the 12 months subsequent to June 30, 2025. Approximately $1.5 million of the increase was attributable to revenue generated from existing customer locations under subscription as of June 30, 2025. 31 Table of Contents Cost of Revenue and Gross Margin Three Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Cost of revenue $ 18,889 $ 16,519 $ 2,370 14 % Gross margin 72 % 72 % The increase in cost of revenue was primarily due to an increase of $2.2 million in direct costs to support customer usage and growth of our customer base, including $0.8 million in fees and revenue shares to application providers, $0.8 million in connectivity costs, $0.4 million in payment processing costs, and $0.2 million in amortization of previously capitalized internal-use software development costs . In addition, there was an increase of $0.2 million in allocated expenses, which include rent, utilities and communications, computer and office supplies, and business insurance. Sales and Marketing Three Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Sales and marketing $ 27,397 $ 25,245 $ 2,152 9 % The increase in sales and marketing expenses was attributable to a $1.5 million increase in spend on demand generation driven by online display advertising and partner-sponsored demand generation programs and a $0.7 million increase in personnel-related expenses driven by salary and commissions. Research and Development Three Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Research and development $ 12,054 $ 11,988 $ 66 1 % Research and development expenses remained relatively flat with an increase in capitalized software development costs of $0.6 million, offset by an increase of $0.5 million in software and subscription costs and $0.2 million in professional fees. 32 Table of Contents General and Administrative Three Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) General and administrative $ 13,588 $ 14,904 $ (1,316) (9) % The decrease in general and administrative expenses was primarily due to a $1.2 million decrease in personnel-related expense that was driven by a decrease in stock-based compensation and employee development costs. In addition, professional fees decreased $0.4 million which were partially offset by a $0.3 million increase in overhead costs including computers, office supplies and business insurance. Other Income (Expense), Net Three Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Interest income $ 346 $ 435 Interest expense (420) (537) Other income, net 335 471 Total other income (expense), net $ 261 $ 369 $ (108) (29) % The decrease in other income (expense), net is largely due to decreased realized gains and lower accretion on our short-term investments, which were offset by lower fees on our revolving line of credit. Comparison of the Six Months Ended June 30, 2026 and 2025 Revenue Six Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Revenue $ 133,042 $ 114,279 $ 18,763 16 % Revenue increased by $18.8 million, or 16%, compared to the six months ended June 30, 2025. Of the increase, approximately $13.5 million of our revenue growth was attributable to revenue generated from new customer locations acquired during the 12 months subsequent to June 30, 2025. Approximately $5.3 million of the increase was attributable to revenue generated from existing customer locations under subscription as of June 30, 2025. Cost of Revenue and Gross Margin Six Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Cost of revenue $ 36,850 $ 32,383 $ 4,467 14 % Gross margin 72 % 72 % The increase in cost of revenue was primarily due to a $3.7 million increase in direct costs to support customer usage, particularly with increased telecommunications connectivity costs of $1.5 million, fees 33 Table of Contents paid to our application providers of $1.2 million, payment processor fees of $0.6 million, and 0.4 million of amortization of internal-use software development costs. We also experienced a $0.5 million increase in allocated overhead related mainly to rent, utilities and office supplies. Additionally, payroll and employee related costs increased $0.2 million. Sales and Marketing Six Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Sales and marketing $ 56,148 $ 48,771 $ 7,377 15 % The increase in sales and marketing expenses was primarily attributable to a $3.0 million increase in personnel-related expenses, including increases in stock-based compensation, salaries and wages and costs related to contracted employees. In addition, demand generation expenses increased by $4.0 million primarily due to increased spend on online marketing of $3.5 million and partner demand generation of $0.5 million. Additionally, the increase in sales and marketing includes $0.2 million of allocated overhead costs. Research and Development Six Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Research and Development $ 22,868 $ 23,141 $ (273) (1) % The decrease in research and development expenses was due to an increase of $1.2 million in amounts capitalized for software development costs. This was offset in part by an increase of $0.4 million in software and subscription fees and $0.5 million related to computer and office supplies. General and Administrative Six Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) General and administrative $ 27,585 $ 29,490 $ (1,905) (6) % The decrease in general and administrative expenses was primarily due to a $2.6 million decrease in personnel-related expenses, including a decrease of $2.3 million related to stock based compensation, and a decrease of $0.3 million in taxes. Additionally, professional fees and employee development costs decreased by $0.5 million. These decreases were offset by increases in other operating expenses of $0.6 million, driven primarily by accounts receivable write-offs and taxes. There was also an increase of $0.6 million in computer and office supplies. 34 Table of Contents Other Income (Expense), Net Six Months Ended June 30, Change 2026 2025 Amount Percentage (dollars in thousands) Interest income $ 718 $ 898 Interest expense (789) (934) Other income, net 687 971 Total other income (expense), net $ 616 $ 935 $ (319) (34) % The decrease in other income (expense), net is largely due to decreased realized gains and lower accretion on our short-term investments, which were offset by lower fees on our revolving line of credit. Non-GAAP Financial Measures 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. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (dollars in thousands) Net cash provided by operating activities $ 10,241 $ 5,445 $ 4,536 $ 5,226 Net cash used in investing activities (1,769) (12,385) (6,801) (10,127) Net cash used in financing activities (3,056) (1,805) (5,064) (2,030) Free cash flow 8,702 4,478 1,578 3,416 Net cash provided by operating activities as a percentage of revenue 15 % 9 % 3 % 5 % Free cash flow margin 13 % 8 % 1 % 3 % Net loss (4,257) (8,711) (10,027) (17,536) Adjusted EBITDA $ 4,569 $ 1,059 $ 8,293 $ 2,079 Free Cash Flow and Free Cash Flow Margin 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. Adjusted EBITDA We define EBITDA as earnings before interest expense, interest income, other income/expense, income tax expense, depreciation, and amortization. Our depreciation adjustment includes depreciation 35 Table of Contents 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, amortization of acquisition-related intangible assets, and costs related to shareholder matters, including third-party legal, consulting, and advisory fees related to a cooperation agreement, which we believe are outside the ordinary course of business and not reflective of operational performance. 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 describe further in Note 10 of our unaudited condensed consolidated financial statements. Limitations and Reconciliation of Non-GAAP Financial Measures Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under U.S. GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under U.S. GAAP. For example, the non-GAAP financial information presented above may be determined or calculated differently by other companies and may not be directly comparable to that of other companies. In addition, free cash flow does not reflect our future contractual commitments and the total increase or decrease of our cash balance for a given period. Further, Adjusted EBITDA excludes some costs, namely, non-cash stock-based compensation expense, acquisition transaction costs, amortization of acquisition-related intangible assets, and costs related to shareholder matters. Therefore, Adjusted EBITDA does not reflect the non-cash impact of stock-based compensation expense or working capital needs that will continue for the foreseeable future. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures and to not rely on any single financial measure to evaluate our business. 36 Table of Contents Free Cash Flow and Free Cash Flow Margin U.S. GAAP Reconciliation Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (dollars in thousands) Revenue $ 67,542 $ 58,470 $ 133,042 $ 114,279 Net cash provided by operating activities $ 10,241 $ 5,445 $ 4,536 $ 5,226 Less: Purchase of property and equipment (633) (544) (1,154) (988) Less: Capitalized internal-use software costs (906) (423) (1,804) (822) Free cash flow $ 8,702 $ 4,478 $ 1,578 $ 3,416 Net cash used in investing activities $ (1,769) $ (12,385) $ (6,801) $ (10,127) Net cash used in financing activities $ (3,056) $ (1,805) $ (5,064) $ (2,030) Net cash provided by operating activities as a percentage of revenue 15 % 9 % 3 % 5 % Free cash flow margin 13 % 8 % 1 % 3 % Adjusted EBITDA U.S. GAAP Reconciliation Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Net loss $ (4,257) $ (8,711) $ (10,027) $ (17,536) Interest expense 420 537 789 934 Income tax provision 132 (1,106) 234 (1,035) Interest income (346) (435) (718) (898) Other (income) expense, net (335) (471) (687) (971) Depreciation(1) 990 520 1,526 1,031 Amortization(2) 401 470 1,051 940 Amortization of acquisition-related intangibles 344 156 685 156 Stock-based compensation 7,034 9,252 14,164 18,237 Acquisition transaction costs(3) 186 847 447 1,221 Shareholder matters(4) — — 829 — Adjusted EBITDA $ 4,569 $ 1,059 $ 8,293 $ 2,079 ______________ (1) Does not include amortization of finance lease right-of-use assets on phone hardware provided to our customers. (2) Represents amortization of capitalized internal-use software and cloud computing costs. (3) Represents expenses incurred with third parties as part of the Company’s acquisition activity, including due diligence, closing, and post-closing integration activities. (4) Represents charges related to shareholder matters, including third-party legal, consulting, and advisory fees related to a cooperation agreement. Liquidity and Capital Resources 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 $329.1 million as of 37 Table of Contents June 30, 2026 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. As of June 30, 2026, 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 $47.6 million, as well as $30.8 million in other short-term investments comprised primarily of treasury and commercial paper instruments. A substantial source of our cash inflow comes from our deferred revenue, which is included on our consolidated balance sheets as a liability. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recorded as revenue over the subscription term. We had $37.3 million of deferred revenue recorded as a current liability as of June 30, 2026. This deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met. We assess our liquidity primarily through our cash on hand as well as the projected timing of billings under contract with our paying customers and related collection cycles. We believe our current cash, cash equivalents, short-term investments and amounts available under our senior secured credit facility will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months. The following table shows a summary of our cash flows for the periods presented: Six Months Ended June 30, 2026 2025 (dollars in thousands) Net cash provided by operating activities $ 4,536 $ 5,226 Net cash used in investing activities (6,801) (10,127) Net cash used in financing activities (5,064) (2,030) Operating Activities For the six months ended June 30, 2026, cash provided by operating activities was $4.5 million, primarily due to a net loss of $10.0 million, adjusted for net non-cash charges of $32.3 million and net cash outflows of $17.7 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 comprised of sales commissions earned on bookings, a $2.3 million decrease in operating lease liabilities, a $1.3 million decrease in accrued liabilities, a $1.2 million increase in prepaid expenses, a $1.1 million decrease in deferred revenue, and a $0.9 million increase in accounts receivable. These amounts were partially offset by a $0.6 million increase in accounts payable. 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. 38 Table of Contents Investing Activities Cash used in investing activities for the six months ended June 30, 2026 was $6.8 million, due to $18.3 million in purchases of short-term investments, partially offset by $14.5 million in short-term investment maturities. Additional investing cash flow activities included $1.8 million in personnel-related costs capitalized as internal-use software development and $1.2 million of furniture and equipment additions. 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. Financing Activities Cash used in financing activities for the six months ended June 30, 2026 was $5.1 million, primarily due to principal payments on finance lease obligations of $3.7 million and $2.9 million in payments made for taxes related to the net share settlement of equity awards. These outflows were partially offset by cash proceeds of $1.0 million from the employee stock purchase plan, and proceeds from employee stock option exercises of $0.4 million. 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. Contractual Obligations and Commitments During the six months ended June 30, 2026, we acquired $5.2 million of additional right of use assets through new finance lease obligations. Other than the new finance lease obligations, there have been no material changes to our contractual obligations from those described in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 5, 2026. Indemnifications Certain of our agreements with partners, resellers and customers include provisions for indemnification against liabilities should our platform contribute to a data compromise, particularly a compromise of protected health information (“PHI”). We have not incurred any costs as a result of such indemnification obligations historically and have not accrued any liabilities related to such obligations in our unaudited condensed consolidated financial statements as of June 30, 2026. Silicon Valley Bank Credit Facility In August 2021, we established a revolving line of credit with SVB, a division of First-Citizens Bank & Trust Company (“SVB”), allowing for total borrowing capacity up to $50.0 million, subject to reduction should we fail to meet certain metrics for recurring revenue and customer retention (the “August 2021 Agreement”). In July 2025, the Company amended the SVB revolving line of credit (the “July 2025 Amendment”). The revolving line of credit, as amended, maintained a total borrowing capacity of up to $50.0 million and matures in May 2027. Amounts outstanding on the revolving line of credit accrue interest at the greater of prime rate less 0.25% and 3.50%. We are required to pay a recurring annual fee of $0.1 million beginning in July 2026 on the anniversary of the effective date of the July 2025 Amendment. The revolving line of credit is collateralized by substantially all of the Company’s assets. The July 2025 Amendment includes financial covenants requiring that, at any time, if our total unrestricted cash and cash equivalents held at SVB, plus our short-term investments managed by SVB, is less than 39 Table of Contents $100.0 million, we must at all times thereafter maintain a consolidated minimum liquidity of $20.0 million, meaning unencumbered cash and short-term investments plus available borrowing on the revolving line of credit, and that we are required to meet specified minimum levels of EBITDA, as adjusted for stock-based compensation expense, changes in our deferred revenue balances, capitalized software development expense and certain non-recurring transaction costs. We did not take any advances on the revolving line of credit in the six months ended June 30, 2026. As of June 30, 2026, there was no outstanding balance on the revolving line of credit, the full $50.0 million capacity was available for borrowing, and we were in compliance with all SVB loan covenants. Critical Accounting Estimates Our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with U.S. GAAP. The preparation of condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows may be affected. For information on our critical accounting estimates, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 5, 2026. There have been no material changes to our critical accounting estimates as compared to those disclosed in our 2025 Annual Report on Form 10-K. Recently Adopted Accounting Pronouncements For information on recent accounting pronouncements, see the sections titled “Basis of Presentation and Summary of Significant Accounting Policies—Accounting Pronouncements Adopted” and “Accounting Pronouncements Pending Adoption” in Note 2 to our unaudited condensed consolidated financial statements. Emerging Growth Company Status We are an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” We may take advantage of these exemptions until we are no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We may take advantage of these exemptions up until December 31, 2026.