Clearwater Analytics (CWAN)2024-03-02 12:05Financial Data and Key Metrics Changes - Revenue grew by 21.3% year-over-year, reaching 99.0 million, translating to a 19.8% year-over-year growth [98][118] - Gross margin improved by 139 basis points compared to the previous year, achieving a gross profit of 30 million, representing a 30.3% EBITDA margin, which is an improvement of 360 basis points compared to Q1 2023 [102][118] - Free cash flow for the full year 2023 was 1 million in annual recurring revenue (ARR) increased to 86, reflecting a 28% year-over-year growth in this segment [100][119] - The company reported a net revenue retention (NRR) rate of 107% as of December 31, 2023, slightly up from 106% the previous year [82] Market Data and Key Metrics Changes - International revenue accounted for 18% of total revenue in 2023, with Asia growing the fastest, albeit from a small base [9] - The company noted that the US and North America markets grew faster in 2023 compared to 2022, with EMEA also showing strong growth [9] Company Strategy and Development Direction - The company aims for a normalized growth rate of 20% to 25%, with a focus on innovation and upselling new products to existing clients [34][99] - Clearwater is investing heavily in R&D, with over 60% of R&D capacity now allocated to growth-related product development following the completion of its public cloud transition [89][131] - The company is focusing on expanding its presence in Europe and Asia, with significant investments planned in these regions [65][96] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the macro environment, noting that clients are looking for efficiency and scalability regardless of market conditions [40][57] - The management team highlighted the importance of regulatory changes and increasing complexity in the investment landscape as opportunities for Clearwater's platform [62][72] Other Important Information - The company completed its transition to a public cloud platform with minimal disruption, enhancing its scalability [73] - Clearwater's platform processes and reports on 1 trillion from the previous year [100] Q&A Session Summary Question: What is the revenue outlook for JUMP? - Management indicated that JUMP did grow this year but did not meet ambitious growth targets set during the acquisition process, affecting performance share earnouts [135][153] Question: How is the company addressing the evolving regulatory landscape? - Management noted that increased regulations and complex reporting needs are driving demand for Clearwater's platform, which is designed to handle such complexities [62][72] Question: What are the expectations for net revenue retention? - Management clarified that fluctuations in NRR are minor and attributed to normal business dynamics, with a solid foundation for retention based on high gross retention rates [144]