Business Overview - CWAN aims to be the world's most trusted and comprehensive technology platform simplifying the investment lifecycle[14] - CWAN's platform offers a single, integrated solution for various stages of the investment lifecycle, including investment research, portfolio construction, risk evaluation, and regulatory reporting[24] - CWAN's architecture is open and extensible, creating a network that includes research, pre-trade compliance, OEMS/PMS, IABOR, risk & performance, reconciliation, and reporting[27] - CWAN addresses the complexity arising from numerous data sources (3,500+), security types (~140), accounting bases (35+), active securities (1 million+), and custodian feeds (2,400+)[28] Financial Performance - CWAN boasts a strong gross revenue retention rate of 98%[16,44,49] - CWAN's Q3 2025 EBITDA margin is 34%[16,44] - CWAN has 110 clients with over $1 million in ARR as of H1 2025[16,17,44] - CWAN's Q3 2025 Adjusted EBITDA is $71 million, representing a 34% Adjusted EBITDA margin[76] - CWAN's nine months ended Sept 30, 2025 Excess Free Cashflow is $112 million, which is 22% of revenue[60] Growth Strategy - CWAN's net revenue retention rate is 108% as of September 30, 2025[40] - Approximately half of CWAN's total addressable market (TAM) is located outside North America[40] - CWAN's gross margin is expected to continuously improve, with a target of ~82%+ in the long term[53]

Financial Performance - Revenue for Q3 2025 reached $205,110,000, a 77% increase from $115,828,000 in Q3 2024[24] - Gross profit for Q3 2025 was $134,472,000, compared to $84,471,000 in Q3 2024, reflecting a 59% increase[24] - Operating expenses for Q3 2025 totaled $127,918,000, up from $77,133,000 in Q3 2024, representing a 66% increase[24] - Net loss for Q3 2025 was $10,514,000, compared to a net income of $4,769,000 in Q3 2024[24] - The company reported a comprehensive loss of $11,365,000 for Q3 2025, compared to a comprehensive income of $9,039,000 in Q3 2024[26] - Net income for the nine months ended September 30, 2025, was a loss of $27.729 million, compared to a profit of $7.280 million in 2024[35] - Consolidated net loss for the three months ended September 30, 2025, was $(10,514) thousand, compared to net income of $4,769 thousand for the same period in 2024[107] - The company reported a net loss of $27,729,000 for the nine months ended September 30, 2025, compared to a net income of $7,280,000 for the same period in 2024[92] Assets and Liabilities - Total assets as of September 30, 2025, were $2,990,512,000, significantly up from $1,169,572,000 as of December 31, 2024[22] - Total liabilities increased to $988,961,000 as of September 30, 2025, compared to $139,341,000 at the end of 2024[22] - Cash and cash equivalents decreased to $60,750,000 from $177,350,000 as of December 31, 2024[22] - Accounts receivable, net, increased to $152,791,000 as of September 30, 2025, from $106,151,000 at the end of 2024[66] - Prepaid expenses and other current assets totaled $33,871,000 as of September 30, 2025, compared to $23,006,000 at the end of 2024[67] Equity and Stock - The total stockholders' equity attributable to Clearwater Analytics Holdings, Inc. increased to $1,981,550,000 from $1,008,255,000 as of December 31, 2024[22] - The company issued 3,833,333 shares of common stock, contributing $4,000,000 to additional paid-in capital[28] - The balance of shares withheld for net share settlement and other adjustments was $(264,336,000)[30] - The company has authorized a Share Repurchase Program to repurchase up to $100.0 million of Class A common stock, with no fixed expiration date[102] - As of September 30, 2025, a total of 7,092,009 shares of Class A common stock were available for issuance under the Employee Stock Purchase Plan (ESPP)[99] Cash Flow - Operating cash flow for the nine months ended September 30, 2025, was $120.565 million, an increase from $103.520 million in 2024[35] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $120.6 million, an increase from $103.5 million in the same period of 2024, reflecting a growth of approximately 16.5%[169][170] - Net cash used in investing activities was $988.5 million for the nine months ended September 30, 2025, primarily due to acquisitions totaling $1,074.8 million, compared to $54.8 million in the same period of 2024[171][172] - Net cash provided by financing activities was $750.2 million for the nine months ended September 30, 2025, significantly higher than the $42.5 million used in financing activities in the same period of 2024[173][174] Acquisitions - The total merger consideration for the acquisition of Enfusion, Inc. was $1.4 billion, net of cash acquired[51] - The company completed acquisitions of Beacon and Enfusion on April 30 and April 21, 2025, respectively, to enhance its investment management solutions[122] - The acquisition of Beacon Platform Inc. resulted in a total merger consideration of $487,738,000, with goodwill recorded at $337,928,000[56] - The Bistro Asset Acquisition was completed for $112.7 million, with identified intangible assets valued at $112,733,000[64] - Acquisition-related costs for the nine months ended September 30, 2025, were $4.1 million, with no costs incurred in the previous year[58] Research and Development - Research and development expenses for Q3 2025 were $52,065,000, up from $36,618,000 in Q3 2024, a 42% increase[24] - The company plans to invest in research and development to maintain its technological advantage, even if it results in higher expenses relative to revenue growth[129] - Research and development expenses accounted for 25% of revenue for the three months ended September 30, 2025, down from 32% in 2024[157] Client Growth and Retention - Clearwater Analytics manages over $8.8 trillion of global invested assets for over 1,400 clients as of December 31, 2024[117] - The company maintained a gross revenue retention rate of at least 98% in 26 of the last 27 quarters, with net revenue retention rates between 108% and 114% in 2025[125][144] - Annualized recurring revenue increased by 76.7% from September 30, 2024, to September 30, 2025, driven by client growth and asset onboarding[142] - The company expects revenue growth as clients transition from onboarding to steady state, with revenues and gross margins expected to increase over time[125] Debt and Financing - The company entered into a 2025 Credit Agreement providing $800 million in term loans and $200 million in revolving commitments, with initial cash proceeds of $800 million received[71][72] - The interest rates for the 2025 Term Loans are based on a SOFR rate plus an applicable margin of 2.25%, with a potential decrease of 0.25% if certain secured net leverage levels are achieved[74] - A hypothetical increase or decrease in SOFR of 100 basis points would result in an annual change of $8.6 million in interest expense under the 2025 Credit Agreement as of September 30, 2025[182] Employee Compensation - Employee compensation expense for the three months ended September 30, 2025, was $88,971 thousand, up from $49,932 thousand in the same period in 2024[107] - Total equity-based compensation expense for the three months ended September 30, 2025, was $33,470,000, up from $25,976,000 in 2024[152] - Equity-based compensation expenses totaled $33,648,000, indicating a significant investment in employee incentives[30] Other Financial Metrics - Adjusted EBITDA for the three months ended September 30, 2025, was $70,733,000, which is 34% of revenue, compared to $38,340,000 or 33% of revenue in 2024[151] - The effective tax rate for the three months ended September 30, 2025, was (5.1%), compared to (11.3%) for the same period in 2024[111] - The company recognized a debt extinguishment loss of $0.4 million related to the prior credit agreement in interest expense[79]

Financial Performance - Quarterly revenue for Q3 2025 was $205.1 million, representing a 77% increase year-over-year from $115.8 million in Q3 2024[3] - Adjusted EBITDA for Q3 2025 was $70.7 million, up 84.5% from $38.3 million in Q3 2024, with an adjusted EBITDA margin of 34.5%[3] - Annualized recurring revenue (ARR) reached $807.5 million as of September 30, 2025, a 77% increase from $456.9 million a year earlier[4] - Non-GAAP net income for Q3 2025 was $40.6 million, a 31.2% increase from $31.0 million in Q3 2024[3] - Revenue for Q3 2025 reached $205,110,000, a 77% increase from $115,828,000 in Q3 2024[23] - Gross profit for Q3 2025 was $134,472,000, compared to $84,471,000 in Q3 2024, reflecting a 59% increase[23] - Operating cash flow for the nine months ended September 30, 2025, was $120,565 thousand, an increase from $103,520 thousand in 2024[25] - Adjusted EBITDA for the nine months ended September 30, 2025, reached $174,117,000, representing a 67% increase compared to $103,992,000 in 2024[33] - Free cash flow for the three months ended September 30, 2025, was $44,927,000, slightly down from $48,111,000 in 2024[30] - The company reported a net income loss of $27,729,000 for the nine months ended September 30, 2025, compared to a profit of $7,280,000 in 2024[33] Expenses and Losses - Operating expenses totaled $127,918,000 in Q3 2025, up from $77,133,000 in Q3 2024, representing a 66% increase[23] - Net loss for Q3 2025 was $10,514,000, compared to a net income of $4,769,000 in Q3 2024[23] - Research and development expenses for Q3 2025 were $52,065,000, up from $36,618,000 in Q3 2024, a 42% increase[23] - Sales and marketing expenses rose to $44,471,000 in Q3 2025, compared to $17,889,000 in Q3 2024, an increase of 148%[23] - The company reported a basic net loss per share of $0.04 for Q3 2025, compared to a net income per share of $0.02 in Q3 2024[23] - The company incurred equity-based compensation of $33,470 thousand for the three months ended September 30, 2025, compared to $25,976 thousand in 2024[25] - Interest expense for the nine months ended September 30, 2025, was $30,502,000, compared to $3,256,000 in 2024, indicating a significant increase[33] Cash Flow and Investments - Operating cash flows for Q3 2025 were $49.0 million, enabling the repayment of $40 million of debt[3] - Cash used in investing activities for the nine months ended September 30, 2025, was $988,455 thousand, significantly higher than $54,772 thousand in 2024[25] - Cash and cash equivalents decreased to $60,750,000 from $177,350,000 as of December 31, 2024[21] - Cash and cash equivalents at the end of the period were $60,750 thousand, down from $228,694 thousand at the end of the same period in 2024[25] - Cash paid for interest was $15,137 thousand for the three months ended September 30, 2025, compared to $865 thousand in 2024[26] Strategic Developments - CWAN announced a revenue guidance of $730 million to $731 million for the full year 2025, reflecting a year-over-year growth of 62%[7] - The company hosted its annual user conference, Connect '25, showcasing enhanced capabilities for its Alternative Assets Solution targeting the $2.5 trillion private credit market[5] - CWAN repurchased $8.9 million of its shares as part of a $100 million share buyback program announced on September 3, 2025[5] - The company secured a multi-billion dollar endowment portfolio management contract with Texas Treasury Safekeeping Trust Company, validating its strategic product value[5] Balance Sheet - Total assets as of September 30, 2025, were $2,990,512,000, significantly up from $1,169,572,000 as of December 31, 2024[21] - Total liabilities increased to $988,961,000 as of September 30, 2025, compared to $139,341,000 at the end of 2024[21] - The company reported depreciation and amortization of $29,300 thousand for the three months ended September 30, 2025, compared to $3,239 thousand in 2024[25] - The company reported a deferred tax benefit of $(2,239) thousand for the three months ended September 30, 2025[25]

Core Insights - Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is identified as a stock with over 50% upside potential, receiving a Buy rating from Oppenheimer analyst Brian Schwartz with a price target set at $36 [1] - The company announced an integration with J.P. Morgan Asset Management that transforms cash management for hedge funds, enhancing operational efficiency [2][3] Company Overview - Clearwater Analytics Holdings, Inc. provides web-based investment portfolio accounting, reporting, and reconciliation services, with operations segmented into the United States and the Rest of the World [4] Recent Developments - The integration with J.P. Morgan's trading platform allows clients to manage investments and monitor idle cash through a single automated workflow, offering multiple currency and fund provider options [3]

Core Insights - Scalar Gauge Management has completely exited its position in Clearwater Analytics Holdings, selling 524,244 shares for an estimated transaction value of $11.5 million in the third quarter [1][2][6] Company Overview - Clearwater Analytics Holdings reported a total revenue of $551.1 million and a net income of $406.4 million for the trailing twelve months (TTM) [4] - The company's shares closed at $18.41, reflecting a one-year price change of approximately -19% [4] Performance Context - Clearwater Analytics has experienced a significant decline in share price, down 29% over the past year, contrasting sharply with the S&P 500's gain of nearly 17% during the same period [3][7] - The company reported second-quarter revenue of $181.9 million but incurred a net loss of $24.2 million, missing analyst expectations [7] Market Sentiment - Scalar Gauge Management's exit from Clearwater Analytics is indicative of a broader trend of pulling back from software companies that have struggled with earnings momentum, particularly in the SaaS sector [6][7] - The firm noted that small- and mid-cap software valuations have compressed below 2022 levels, despite improvements in profitability, suggesting a cautious approach until market sentiment stabilizes [7]

Group 1 - Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is identified as a stock with exponential growth potential heading into 2026, with a "Buy" rating and a price target of $27.00 from Morgan Stanley analyst Michael Infante [1] - The company is expected to see an increase in organic net new Annual Recurring Revenue (ARR) due to large deals and improved sales efficiency post-integration [1] - Clearwater Analytics continues to trade at an attractive valuation compared to competitors, benefiting from faster revenue growth and margin expansion [2] Group 2 - T. Rowe Price Associates, Inc. has successfully implemented the CWAN platform for stable value operations, enhancing its capabilities [3] - Clearwater Analytics provides software-as-a-service solutions for automated investment data aggregation, reconciliation, accounting, and reporting, and has recently acquired Enfusion, Beacon, and Bistro assets to broaden its product offerings [3] - The integration of these new assets is a key focus for Clearwater, although it is expected to have a dilutive impact on the company's financial profile, which led to an 18% drop in share price [3]

Core Viewpoint - Clearwater Analytics (CWAN) is expected to report a year-over-year increase in earnings and revenues for the quarter ended September 2025, with the consensus outlook being crucial for assessing the company's earnings picture [1] Earnings Expectations - The consensus EPS estimate for Clearwater Analytics is $0.15 per share, reflecting a year-over-year increase of +25% [3] - Revenues are anticipated to reach $203.84 million, which is a 76% increase from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate has been revised down by 10.35% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4] - Clearwater Analytics has an Earnings ESP of -14.47%, suggesting that the Most Accurate Estimate is lower than the Zacks Consensus Estimate [12] Historical Performance - In the last reported quarter, Clearwater Analytics was expected to post earnings of $0.13 per share but actually reported $0.12, resulting in a surprise of -7.69% [13] - Over the past four quarters, the company has beaten consensus EPS estimates three times [14] Comparison with Industry Peers - Flywire (FLYW), another player in the Zacks Internet - Software industry, is expected to report EPS of $0.19 for the same quarter, indicating a year-over-year decline of -36.7% [18] - Flywire's revenues are projected to be $179.54 million, up 18.6% from the previous year, with a significant revision of the consensus EPS estimate down by 500% over the last 30 days [19] - Flywire has a positive Earnings ESP of +29.23%, indicating a higher likelihood of beating the consensus EPS estimate [19]

Group 1 - Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is recognized as one of the 12 best fintech stocks to buy according to analysts [1] - T. Rowe Price Associates, Inc. has successfully implemented the CWAN platform, which supports their stable value operations [1] - T. Rowe Price manages $1.73 trillion in client assets as of August 31, 2025 [1] Group 2 - The CWAN platform is designed to create an integrated investment management technology solution for clients [2] - T. Rowe Price has experienced significant improvements in participant service and operations through the CWAN platform, enhancing productivity and reducing risks [2] Group 3 - Clearwater Analytics is a software and financial technology company providing a cloud-native platform for institutional investors across global public and private markets [3]

Core Insights - Clearwater Analytics Holdings Inc. (NYSE:CWAN) is recognized as a promising investment opportunity in the technology sector, particularly due to its recent focus on the $2.5 trillion private credit market [1][2]. Group 1: Company Developments - The company has introduced enhancements to its Alternative Assets Solutions aimed at addressing challenges in the private credit market, including automating loan structures and accelerating fund research through AI [2][3]. - The Private Credit Management enhancement will integrate accounting workflows to eliminate manual processes, while the Fund Research feature will utilize AI to reduce document review cycles, ensuring real-time data accuracy through Asset Sync [3]. Group 2: Market Context - The private credit market is becoming increasingly central to institutional portfolios, indicating a shift from a niche allocation to a mainstream investment strategy [3]. - Clearwater Analytics provides a cloud-based Software-as-a-Service (SaaS) platform that supports institutional investors in managing their entire investment lifecycle, including data aggregation, accounting, compliance, performance, risk analytics, and trading [4].

Core Viewpoint - Investors in the Internet - Software sector should consider 8x8 (EGHT) and Clearwater Analytics (CWAN) as potential value opportunities, with EGHT currently presenting a stronger case for investment [1]. Group 1: Zacks Rank and Earnings Outlook - 8x8 has a Zacks Rank of 2 (Buy), indicating a favorable outlook, while Clearwater Analytics has a Zacks Rank of 3 (Hold), suggesting a less favorable position [3]. - The earnings outlook for 8x8 has likely improved more significantly than that of Clearwater Analytics recently, which is a key consideration for value investors [3]. Group 2: Valuation Metrics - 8x8 has a forward P/E ratio of 6.69, significantly lower than Clearwater Analytics' forward P/E of 31.43, indicating that 8x8 may be undervalued [5]. - The PEG ratio for 8x8 is 0.77, while Clearwater Analytics has a PEG ratio of 1.57, further suggesting that 8x8 offers better value based on expected earnings growth [5]. - 8x8's P/B ratio is 2.22 compared to Clearwater Analytics' P/B of 2.61, reinforcing the notion that 8x8 is more attractively priced relative to its book value [6]. Group 3: Overall Value Grades - Based on various valuation metrics, 8x8 holds a Value grade of A, while Clearwater Analytics has a Value grade of F, indicating a significant disparity in perceived value between the two stocks [6]. - The combination of Zacks Rank and Style Scores suggests that value investors are likely to favor 8x8 over Clearwater Analytics at this time [6].