This presentation contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include the following factors in reference to Clearwater (including its recently completed acquisitions), our possible or assumed future results of operations, possible or assume ...

Group 1: Earnings Performance - Clearwater Analytics reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, and up from $0.10 per share a year ago [1] - The earnings surprise for the quarter was 8.33%, and the company had a previous surprise of 18.18% when it reported $0.13 per share against an expectation of $0.11 [2] - Over the last four quarters, Clearwater Analytics has surpassed consensus EPS estimates three times [2] Group 2: Revenue Performance - The company posted revenues of $126.86 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.32%, compared to $102.72 million in the same quarter last year [3] - Clearwater Analytics has topped consensus revenue estimates four times over the last four quarters [3] Group 3: Stock Performance and Outlook - Clearwater Analytics shares have declined approximately 17.4% since the beginning of the year, while the S&P 500 has decreased by 5.5% [4] - The current consensus EPS estimate for the upcoming quarter is $0.13 on revenues of $129.45 million, and for the current fiscal year, it is $0.53 on revenues of $540.13 million [8] - The Zacks Industry Rank for Internet - Software is currently in the bottom 44% of over 250 Zacks industries, indicating potential challenges for stock performance [9]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $126.9 million, representing a year-on-year growth of 23.5% [4][29] - Annualized recurring revenue (ARR) reached $493.9 million, up 22.7% year-on-year [5][30] - Adjusted EBITDA was $45.1 million, accounting for 35.5% of revenue, with a year-on-year growth of 40% [5][31] - Gross margin improved to 78.9%, up from 75.1% in FY 2022, exceeding expectations [13][30] Business Line Data and Key Metrics Changes - The company has maintained over 20% revenue growth for the past six years, with a win rate of 80% and a gross revenue retention rate (GRR) of over 98% [9][10] - The launch of a commercial contract restructuring program in 2022 has helped dampen revenue downside during AUM declines while retaining revenue upside during AUM growth [10] Market Data and Key Metrics Changes - The company has secured significant wins in Europe, including a leading German insurance company, which validates its expansion strategy [18] - A global asset manager expanded its partnership to include additional solutions, demonstrating strong cross-sell momentum [18] Company Strategy and Development Direction - The strategic acquisitions of Infusion, Beacon, and Bistro aim to create a fully cloud-native investment platform that integrates front, middle, and back office operations [19][20] - The company plans to implement a three-phase roadmap focusing on maximizing standalone business potential, cross-selling, and developing a unified platform [23][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute and drive growth despite market complexities [5][16] - The company is focused on client satisfaction and operational efficiency, which are seen as key to improving profitability [12][31] Other Important Information - The company expects to achieve a 20% growth rate, with a 50 basis point gross margin improvement and a 200 basis point EBITDA expansion per year [27] - The integration of operations and client servicing teams under common leadership is expected to enhance efficiency [14] Q&A Session Summary Question: Thoughts on future growth rates and margin pacing - Management reiterated a commitment to 20% growth for Clearwater and Beacon, with expectations for Infusion to improve from 13% growth [46][47] Question: Demand outlook and macroeconomic impact - Management noted that Q1 revenue was solid and that they have not seen significant negative impacts from recent market turmoil [58][60] Question: Synergies from acquisitions - Management confirmed expectations for $20 million in cost synergies and improvements in gross margin over the next two years [66] Question: Organic growth expectations - Management provided guidance indicating that organic growth for Clearwater would remain above 20%, with contributions from acquisitions factored in [84][87] Question: Insights on Infusion's pricing and customer conversations - Management indicated a strong receptivity to developing a stable commercial model for Infusion, aiming for consistent growth [79][80]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $126.9 million, representing a year-on-year growth of 23.5% [6][31] - Annualized recurring revenue (ARR) reached $493.9 million, up 22.7% year-on-year from $402.3 million [6][32] - Adjusted EBITDA was $45.1 million, accounting for 35.5% of revenue, with a year-on-year growth of 40% [6][31] - Gross margin improved to 78.9%, up from 75.1% in FY 2022, exceeding expectations [15][32] Business Line Data and Key Metrics Changes - The company has maintained over 20% revenue growth for the past six years, with a win rate of 80% and a gross revenue retention rate (GRR) of over 98% [11][12] - The restructuring program launched in 2022 has helped dampen revenue downside during market volatility while retaining revenue upside during favorable conditions [12] Market Data and Key Metrics Changes - The company secured significant wins in Q1, including partnerships with a leading German insurance company and a global asset manager, indicating strong market demand [19][20] - The company’s platform is positioned to address complex operational challenges across diverse clients, enhancing cross-sell momentum [20] Company Strategy and Development Direction - The strategic acquisitions of Infusion, Beacon, and Bistro aim to create a fully cloud-native investment platform that integrates front, middle, and back office operations [20][21] - The company plans to implement a three-phase roadmap focusing on maximizing standalone business potential, cross-selling strategies, and developing a unified platform [25][27] - The company anticipates achieving 20% growth, 50 basis points gross margin improvement, and 200 basis points EBITDA expansion per year post-acquisitions [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to navigate market complexities and maintain revenue growth despite potential headwinds [7][65] - The company is focused on client satisfaction and operational efficiency as key drivers for future growth [14][17] - Management highlighted the importance of integrating new acquisitions to enhance overall business performance and client offerings [29][72] Other Important Information - The company spent $37.4 million on R&D in Q1, representing 21.6% of revenue, which is more than double the amount spent when going public in 2021 [35] - Free cash flow for Q1 was $23 million, a year-on-year increase of 168% [36] Q&A Session Summary Question: Insights on future growth rates and margin pacing - Management confirmed a commitment to 20% growth for Clearwater and Beacon, with expectations for Infusion to improve from 13% growth to 20% over the next two years [50][54] Question: Role of Bistro in the overall strategy - Bistro is seen as a horizontal capability applicable across various markets, enhancing the company’s offerings in alternative asset visualization [56][58] Question: Demand outlook and macroeconomic impact - Management noted that Q1 performance was solid, with no significant negative impact from macroeconomic factors observed in April [64][68] Question: Synergies from acquisitions - Management expects to achieve $20 million in cost synergies and improve gross margins by 400 basis points in the first year post-acquisition [71][72] Question: Organic growth expectations - Management indicated that organic growth for Clearwater is expected to remain above 20%, with contributions from the acquired companies factored into the overall guidance [87][92]

Financial Performance - Total revenue for Q1 2025 was $126.9 million, a 24% increase year-over-year[1] - Annualized recurring revenue (ARR) reached $493.9 million, up 23% year-over-year[1] - Adjusted EBITDA for Q1 2025 was $45.1 million, reflecting a 40% increase from Q1 2024[3] - Gross profit for Q1 2025 was $92.9 million, resulting in a GAAP gross margin of 73.3%[3] - Revenue for Q1 2025 was $126,864,000, representing a 23.5% increase from $102,719,000 in Q1 2024[24] - Gross profit for Q1 2025 was $92,940,000, up from $74,541,000 in Q1 2024, indicating a gross margin improvement[24] - Net income attributable to Clearwater Analytics Holdings, Inc. for Q1 2025 was $6,510,000, compared to $1,898,000 in Q1 2024, reflecting a significant increase[24] - Net income for the quarter was $6,936 million, compared to $2,236 million in the same period last year, reflecting a strong growth trajectory[33] - Non-GAAP net income was $34,855 million, or 27% of revenue, up from 25% in the previous year[33] - Basic non-GAAP net income per share increased to $0.15 from $0.12, while diluted non-GAAP net income per share rose to $0.13 from $0.10[33] Cash Flow and Assets - Free cash flow generation increased by 168% year-over-year, totaling $23.0 million in Q1 2025[2] - Free cash flow for Q1 2025 was $23,032,000, significantly higher than $8,599,000 in Q1 2024[30] - The company reported a net cash provided by operating activities of $24,500,000 for Q1 2025, compared to $10,037,000 in Q1 2024[30] - Cash and cash equivalents rose to $275,159,000 at the end of Q1 2025, compared to $177,350,000 at the end of Q4 2024, marking a substantial increase[26] - Total current assets increased to $422,063,000 as of March 31, 2025, from $384,646,000 as of December 31, 2024[22] - Total assets increased to $1,285,322,000 as of March 31, 2025, from $1,169,572,000 as of December 31, 2024[22] Operational Metrics - Gross revenue retention rate was 98% as of March 31, 2025, compared to 99% a year earlier[4] - Net revenue retention rate was 114% as of March 31, 2025, down from 116% at the end of 2024[4] - Total operating expenses for Q1 2025 were $85,858,000, compared to $74,707,000 in Q1 2024, reflecting increased investment in operations[24] - Research and development expenses were $37,400 million, slightly down from $37,676 million, with non-GAAP R&D at $27,451 million, or 22% of revenue[32] - Sales and marketing expenses increased to $19,631 million from $16,311 million, with non-GAAP sales and marketing at $14,478 million, or 11% of revenue[32] - General and administrative expenses rose to $28,827 million from $20,720 million, with non-GAAP G&A at $13,079 million, maintaining 10% of revenue[32] - Income from operations was $7,082 million, a significant improvement from a loss of $166 million in 2024[32] Guidance and Future Outlook - Guidance for Q2 2025 includes projected revenue of $129 million, representing approximately 21% year-over-year growth[8] - Full year 2025 revenue guidance is set between $720 million and $728 million, indicating a year-over-year growth of approximately 59% to 61%[9] Acquisitions - The company completed acquisitions of Enfusion and Beacon, aiming to enhance its investment management platform[7]

Financial Performance - Total revenue for 2024 reached $451.8 million, a 22.7% increase from $368.2 million in 2023[360]. - Gross profit for 2024 was $328.8 million, up 25.9% from $261.0 million in 2023[360]. - Net income for 2024 was $427.6 million, compared to a net loss of $23.1 million in 2023[360]. - Comprehensive income for 2024 was $423.1 million, compared to a loss of $20.3 million in 2023[362]. - Basic net earnings per share for 2024 were $1.93, a recovery from a loss of $0.11 per share in 2023[360]. - Employee compensation expense increased to $208.4 million in 2024, up from $184.7 million in 2023, reflecting a 12.7% rise[492]. - Consolidated net income for 2024 was $427.6 million, a significant recovery from a net loss of $23.1 million in 2023[492]. Assets and Liabilities - As of December 31, 2024, the total assets loaded on the platform reached $8.8 trillion, up from $7.3 trillion in 2023, indicating a significant growth in asset management[19]. - Total assets as of December 31, 2024, were $1.17 billion, significantly up from $558.7 million in 2023[358]. - The company reported a debt balance of $46.1 million under the Credit Agreement, with a potential interest expense fluctuation of approximately $0.2 million for a hypothetical 100 basis points change in the Secured Overnight Financing Rate (SOFR)[332]. - The company’s net carrying amount of debt as of December 31, 2024, was $45.914 million, with future maturities of $2.750 million due in 2025 and $43.313 million in 2026[460]. - Total stockholders' equity attributable to Clearwater Analytics Holdings, Inc. increased to $1.01 billion in 2024, compared to $354.3 million in 2023[358]. Tax and Deferred Assets - Deferred tax assets related to the investment in partnership amounted to $514 million as of December 31, 2024, reflecting the company's strategic financial positioning[344]. - The company reported a total of $625.1 million in deferred tax assets as of December 31, 2024, compared to $512.9 million in 2023[499]. - The valuation allowance decreased by $493 million during 2024, primarily due to the release of the valuation allowance on most U.S. federal and state deferred tax assets[501]. - The effective tax rate for 2024 was 1,522.3%, significantly impacted by the release of the majority of the valuation allowance on U.S. deferred tax assets[497]. Revenue Recognition and Deferred Revenue - The Company recognizes revenue from professional services on a time and materials basis as services are delivered[392]. - Deferred revenue consists of non-refundable fees invoiced during the period in which the Company is performing set-up activities for the SaaS solution[397]. - The company’s deferred revenue increased significantly to $7.329 million in 2024 from $2.766 million in 2023, marking a growth of about 164.5%[453]. - For the year ended December 31, 2024, $2.4 million of total revenue was included in the deferred revenue balance as of December 31, 2023, related to the company's SaaS solution[439]. Acquisitions and Growth - The company completed the acquisition of Wilshire Technology for a total purchase consideration of $40.1 million in cash on April 22, 2024, which includes goodwill of $28.24 million attributed to expected post-acquisition synergies[443][445]. - The company entered into a merger agreement to acquire Enfusion, Inc. for approximately $1.5 billion, expected to close in Q2 2025, subject to shareholder and regulatory approvals[517][518]. - A senior secured term loan B facility of $800 million was completed to finance part of the cash consideration for the Enfusion acquisition, with an interest rate based on SOFR plus 2.25%[519]. Operational Challenges - The company faces prolonged sales cycles and substantial upfront sales costs when targeting large financial institutions, which may affect revenue predictability[16]. - The company relies heavily on fees based on the value of assets on its platform, making it vulnerable to market volatility and economic downturns[16]. - Rising inflation has impacted operations in India, although it has not materially affected the overall business performance as of now[333]. Internal Controls and Audit Matters - The company maintains effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion[351]. - The evaluation of deferred tax assets is considered a critical audit matter, requiring complex judgment and specialized knowledge[345]. Stock and Equity - The company issued 291,266 shares under the Employee Stock Purchase Plan (ESPP), generating $4,693,000 in additional capital[365]. - The total paid-in capital increased to $725,174,000 as of December 31, 2024, up from $532,507,000 in 2023[365]. - The total number of shares outstanding as of December 31, 2023, was 212,857,580, reflecting significant growth from the previous year[365]. - The Company granted 4.1 million RSUs in 2024, with a weighted average grant date fair value of $20.02[477]. Research and Development - Research and development expenses increased to $150.6 million in 2024, a 21.5% rise from $123.9 million in 2023[360]. - Research and development costs consist of personnel expenses, including salaries and benefits, for employees engaged in the design and development of the Company's offerings[415].

Group 1 - Clearwater Analytics Holdings (NYSE: CWAN) is expected to see growth accelerate back to mid-20% which will support its valuation to stay above 13x forward [1] - The investment approach focuses on companies with long-term durability, steady growth, no cyclicality, and a strong balance sheet [1] - There is a belief that while valuation is important, in certain situations, the potential for growth can outweigh immediate price concerns [1]

Group 1: Earnings Performance - Clearwater Analytics reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and up from $0.10 per share a year ago [1] - The earnings surprise for this quarter was 18.18%, following a previous surprise of 9.09% when earnings were $0.12 per share against an expectation of $0.11 [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Group 2: Revenue Performance - The company posted revenues of $126.47 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 5.01%, compared to $99.02 million in the same quarter last year [3] - Clearwater Analytics has topped consensus revenue estimates four times over the last four quarters [3] Group 3: Stock Performance and Outlook - Clearwater Analytics shares have increased by approximately 0.4% since the beginning of the year, while the S&P 500 has gained 4.2% [4] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $123.11 million, and for the current fiscal year, it is $0.52 on revenues of $535.27 million [8] - The Zacks Industry Rank for Internet - Software is currently in the top 33% of over 250 Zacks industries, indicating a favorable outlook for the sector [9]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $126.5 million, representing a 28% year-on-year growth, while full-year revenue reached $451.8 million, with a year-over-year growth of 22.7% [6][31] - Annual Recurring Revenue (ARR) grew to $474.9 million, a 25% year-on-year increase [6][33] - Adjusted EBITDA for Q4 was $41.7 million, accounting for 30.3% of revenue, and up 39% year-on-year [7][34] - Net Revenue Retention (NRR) increased to 116%, a significant achievement occurring twelve months ahead of the original target [7][35] Business Line Data and Key Metrics Changes - The company reported strong performance across various dimensions, with a gross margin of 78.8% for Q4 and 78.2% for the full year [34] - The gross margin improved by 190 basis points year-on-year for Q4 and 170 basis points for the full year, exceeding the previous target of 50 basis points per year [9][34] - The company achieved a 7% upsell rate and a 3% growth from new product cross-sell initiatives [36][70] Market Data and Key Metrics Changes - The platform processes and reports on $8.8 trillion in assets daily, an increase of $1.5 trillion from the previous year [33] - The number of clients with over $1 million in ARR grew to 100, up from 86 the previous year [33] Company Strategy and Development Direction - The company aims to drive organic growth through various initiatives, including expanding into new markets, focusing on back-to-base investments, and building partnerships with other software providers [12][14] - The acquisition of Infusion is expected to enhance the company's capabilities by integrating front office solutions with existing middle and back office functionalities [24][28] - The long-term target for gross margin is now set to exceed 80%, driven by operational efficiencies and the development of generative AI use cases [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong client satisfaction and a robust commercial model as key drivers [8][41] - The regulatory environment, particularly changes from NAIC, is viewed as a tailwind for the company, facilitating compliance and driving demand for its services [55][56] - The company anticipates continued growth in 2025, with revenue guidance set between $535.5 million and $542 million, reflecting a year-over-year growth rate of approximately 19% to 20% [38] Other Important Information - The company ended Q4 with $285.8 million in cash and cash equivalents, with total debt at $45.9 million, resulting in net cash holdings of approximately $240 million [35] - The company plans to continue investing in R&D, with a focus on initiatives that demonstrate customer traction and ROI [52] Q&A Session Summary Question: Feedback on the Infusion deal from existing customers - Management noted that customers are excited about the potential integration of front and back office solutions, which is seen as a significant advantage [46] Question: Thoughts on margin expansion and GenAI - Management indicated that they expect continued margin expansion, with GenAI investments paying off quickly and not posing a headwind to margins [51] Question: Impact of NAIC regulations on the core insurance market - Management confirmed that regulatory changes are a tailwind for the company, facilitating compliance for clients and driving demand for services [55][56] Question: Synergies from the Infusion acquisition - Management expressed confidence in achieving synergies quickly due to the similarities in technology and platform structure between the two companies [63] Question: Incremental revenue drivers in Q4 - Management highlighted strong bookings and upsell performance as key contributors to exceeding revenue expectations [68][70] Question: Cross-selling and pricing strategies - Management acknowledged the potential for higher cross-sell rates and emphasized the importance of executing price increases across the portfolio [75][71] Question: FX headwinds in 2025 guidance - Management stated that while there are slight FX headwinds, the majority of revenues are in US dollars, mitigating significant impacts [85] Question: Use cases for new clients, specifically OpenAI - Management clarified that the services provided to clients like OpenAI are consistent with those offered to other clients, focusing on data ingestion, reconciliation, and reporting [90]

Financial Performance - Fourth quarter 2024 revenue reached $126.5 million, a 27.7% increase from $99.0 million in Q4 2023[4] - Annualized Recurring Revenue (ARR) as of December 31, 2024, was $474.9 million, up 25.3% from $379.1 million a year earlier[6] - Net income for Q4 2024 was $420.3 million, compared to a net loss of $3.4 million in Q4 2023[8] - Adjusted EBITDA for Q4 2024 was $41.7 million, a 39% increase from $30.0 million in Q4 2023[8] - Revenue for Q4 2024 was $126,465,000, representing a 27.7% increase from $99,019,000 in Q4 2023[27] - Gross profit for the year ended December 31, 2024, was $328,816,000, up from $261,041,000 in 2023, indicating a growth of 25.9%[27] - Net income attributable to Clearwater Analytics Holdings, Inc. for Q4 2024 was $419,486,000, compared to a net loss of $4,186,000 in Q4 2023[27] - Net income for Q4 2024 was $420,305, a significant increase from a net loss of $3,447 in Q4 2023, representing a 332% improvement[32] - Revenue for Q4 2024 reached $126,465, up from $99,019 in Q4 2023, marking a 28% year-over-year growth[32] - Adjusted EBITDA for Q4 2024 was $41,683, reflecting a 39% increase compared to $29,982 in Q4 2023[32] - Gross profit for Q4 2024 was $92.904 million, up from $70.684 million in Q4 2023, representing a 31.3% growth[36] - Non-GAAP gross profit margin improved to 79% in Q4 2024 compared to 77% in Q4 2023[36] - Income from operations, non-GAAP, was $41.683 million in Q4 2024, up from $29.982 million in Q4 2023, reflecting a 39.0% increase[37] - Non-GAAP net income per share, diluted, increased to $0.13 in Q4 2024 from $0.10 in Q4 2023[37] Client and Market Growth - The net revenue retention rate improved to 116% as of December 31, 2024, up from 107% a year earlier[6] - As of December 31, 2024, Clearwater Analytics had 1,462 clients, including 100 clients contributing at least $1.0 million in ARR, a 16.3% increase from the previous year[9] - The company processes and reports on $8.8 trillion in assets daily, an increase from $7.3 trillion a year earlier[9] Expenses and Cash Flow - Operating cash flows for Q4 2024 were negative $28.9 million, impacted by one-time settlement payments of $79 million[8] - Free Cash Flow for Q4 2024 was $(29,762), a decrease from $22,531 in Q4 2023, indicating a shift in cash generation[34] - Operating cash flow for Q4 2024 was $(28,940), compared to $24,093 in Q4 2023, showing a decline in cash provided by operating activities[34] - Total cash and cash equivalents at the end of Q4 2024 were $177,350, down from $221,765 at the end of Q4 2023[34] - The company incurred $30,421 in equity-based compensation expense in Q4 2024, up from $23,660 in Q4 2023, indicating increased investment in employee incentives[32] - The tax receivable agreement expense for Q4 2024 was $41,637, significantly higher than $8,284 in Q4 2023, reflecting changes in tax strategy[32] - The company reported a net cash used in financing activities of $(19,168) in Q4 2024, compared to $(9,364) in Q4 2023, indicating increased financing outflows[34] Asset and Equity Changes - Total assets increased significantly to $1,169,572,000 as of December 31, 2024, from $558,743,000 in 2023, marking an increase of 109%[25] - Cash and cash equivalents decreased to $177,350,000 in 2024 from $221,765,000 in 2023, a decline of 20%[25] - Goodwill increased to $70,971,000 in 2024 from $45,338,000 in 2023, a rise of 56.6%[25] - Total stockholders' equity attributable to Clearwater Analytics Holdings, Inc. rose to $1,008,255,000 in 2024 from $354,329,000 in 2023, an increase of 184%[25] Guidance and Future Projections - Guidance for Q1 2025 revenue is projected at $125 million, with full year 2025 revenue expected between $535.5 million and $542 million[11] Research and Development - Research and development expenses for the year were $150,558,000, up from $123,925,000 in 2023, reflecting a 21.5% increase[27] - Research and development expenses increased to $40.904 million in Q4 2024, a 21.5% rise from $33.728 million in Q4 2023[36] Operating Expenses - Operating expenses totaled $316,582,000 for the year, compared to $277,786,000 in 2023, an increase of 14%[27] - General and administrative expenses rose to $32.896 million in Q4 2024, up from $18.050 million in Q4 2023, indicating an increase of 82.5%[36]