This Software Stock Is Down 20% in a Year and Just Became One Fund's $6 Million Bet

Company Overview - Clearwater Analytics is a leading provider of cloud-based investment accounting and analytics software, serving a diverse institutional client base [6] - The company leverages a scalable SaaS platform to deliver automated, real-time investment data solutions that streamline compliance, performance measurement, and risk management [6] - Clearwater Analytics operates a subscription-based business model, generating recurring revenue from cloud-based software offerings tailored for investment data management and analytics [9] Financial Performance - For the third quarter, Clearwater Analytics reported revenue of $205.1 million, up 77% year over year, and adjusted EBITDA increased 84% to $70.7 million, with margins expanding to 34.5% [10] - Annualized recurring revenue reached $807.5 million, up 77%, while net revenue retention held at a solid 108% [10] - The company has strong cash flow, allowing for $40 million in debt repayment during the quarter, and management reiterated full-year guidance of approximately $730 million in revenue and $247 million in adjusted EBITDA [10] Market Position - Clearwater Analytics' stock price as of the last market close was $22.25, reflecting a 20% decline over the past year, underperforming the S&P 500, which is up 16.5% in the same period [3][4] - The new position taken by TFJ Management in Clearwater Analytics, acquiring 357,043 shares valued at $6.43 million, represents 4.3% of the fund's reportable assets at quarter-end [2][3] - The investment by TFJ Management suggests a focus on the quality of the business rather than a short-term stock price movement, indicating confidence in Clearwater Analytics' long-term growth potential [7]