Clearwater Analytics Announces First Quarter 2025 Financial Results

Record Quarterly Revenue of $126.9 Million, Up 24% Year-Over-Year

Annualized Recurring Revenue of $493.9 Million, Up 23% Year-Over-Year

Gross Revenue Retention Rate of 98%; Net Revenue Retention Rate of 114%

Net Income of $6.9 Million

Adjusted EBITDA of $45.1 Million, Up 40% Year-Over-Year

Clearwater Analytics Holdings, Inc. (NYSE:CWAN) ("Clearwater Analytics" or the "Company"), the most comprehensive technology platform for investment management, today announced its financial results for the quarter ended March 31, 2025.

"In Clearwater's final quarter prior to its acquisitions of Enfusion, Beacon and Bistro, I'm incredibly proud to report both exceptional results and milestone achievements. Since our first Investor Day in 2023, our execution has consistently exceeded expectations across key metrics, such as gross margins reaching 78.9%, approaching our 80% target ahead of schedule, and R&D spend decreasing from 25-26% to 21.6% of revenue. While we initially projected margin improvements of 50 and 200 basis points in gross margin and EBITDA, respectively, we've delivered growth at a significantly faster pace. Our value proposition has proven even more compelling in volatile market environments because institutional investors need to see a comprehensive view of their global assets with greater frequency and sophistication," said Sandeep Sahai, CEO at Clearwater Analytics. "While our metrics will reset following the completion of our acquisitions, our long-term goals remain unchanged and our journey of improvement will continue unabated. Our strong ARR growth, expanding margins, and improved efficiencies demonstrate our progress as we continue to reshape the future of investment operations with the industry's most comprehensive investment management platform."

"We're very pleased with Clearwater's first quarter results. In addition to our strong revenue and stellar EBITDA, our free cash flow generation in the quarter increased 168% year-over-year. I'm also pleased to report that Enfusion's Q1 2025 preliminary revenue was $54.5 million, or 13% year-over-year growth, consistent with what we had expected," said Jim Cox, CFO at Clearwater Analytics.

First Quarter 2025 Financial Results Summary

• Revenue: Total revenue for the first quarter of 2025 was $126.9 million, an increase of 23.5%, from $102.7 million in the first quarter of 2024.

• Gross Profit: Gross profit for the first quarter of 2025 increased to $92.9 million, which equates to a 73.3% GAAP gross margin, compared with gross profit of $74.5 million and GAAP gross margin of 72.6% in the first quarter of 2024. Non-GAAP gross profit for the first quarter of 2025 was $100.1 million, which equates to a 78.9% non-GAAP gross margin and an increase of 80 basis points over the first quarter of 2024.

• Net Income: Net income for the first quarter of 2025 was $6.9 million, compared with net income of $2.2 million in the first quarter of 2024. Non-GAAP net income for the first quarter of 2025 increased to $34.9 million, an increase of 33.1% from $26.2 million in the first quarter of 2024.

• Adjusted EBITDA: Adjusted EBITDA for the first quarter of 2025 was $45.1 million, an increase of 40.0%, from $32.2 million in the first quarter of 2024. Adjusted EBITDA margin for the first quarter of 2025 was 35.5%, an increase of 420 basis points over the first quarter of 2024.

• Cash Flows: Operating cash flows for the first quarter of 2025 were $24.5 million. Free cash flows for the first quarter of 2025 were $23.0 million, an increase of 167.8% over the first quarter of 2024.

• Earnings Per Share and Non-GAAP Net Income Per Share attributable to Clearwater Analytics Holdings, Inc.: Earnings per basic share was $0.03, and earnings per diluted share was $0.03 in the first quarter of 2025. Non-GAAP net income per basic share was $0.15, and non-GAAP net income per diluted share was $0.13 in the first quarter of 2025.

• Cash, cash equivalents, and investments were $282.9 million as of March 31, 2025. Total debt, net of debt issuance cost, was $45.2 million as of March 31, 2025.

First Quarter 2025 Key Metrics Summary

• Annualized Recurring Revenue: As of March 31, 2025, annualized recurring revenue ("ARR") reached $493.9 million, an increase of 22.7% from $402.3 million as of March 31, 2024.

ARR is calculated at the end of a period by dividing the recurring revenue in the last month of such period by the number of days in the month and multiplying by 365.

• Gross Revenue Retention Rate: As of March 31, 2025, the gross revenue retention rate was 98%, compared to 99% as of March 31, 2024.

Gross revenue retention rate represents annual contract value ("ACV") at the beginning of the 12-month period ended on the reporting date less client attrition over the prior 12-month period, divided by ACV at the beginning of the 12-month period, expressed as a percentage. ACV is comprised of annualized recurring revenue plus contracted-not-billed revenue, which represents the estimated annual contracted revenue for new and existing client opportunities prior to revenue recognition.

• Net Revenue Retention Rate: As of March 31, 2025, the net revenue retention rate was 114%, compared to 116% as of December 31, 2024 and 110% as of March 31, 2024.

Net revenue retention rate is the percentage of recurring revenue from clients on the platform for 12 months and includes changes from the addition, removal, or value of assets on our platform, contractual changes that have an impact to annualized recurring revenues and lost revenue from client attrition.

Recent Business Highlights

• Clearwater completed its acquisitions of Beacon today and Enfusion on April 21, 2025, and an asset purchase of Blackstone's proprietary portfolio visualization software platform, Bistro, on March 31, 2025. These acquisitions aim to accelerate Clearwater's vision of creating a unified, real-time portfolio view across all asset types—from public equities and private credit to structured products and alternatives—in a single, cloud-native platform, ultimately building the first comprehensive cloud-native front-to-back solution for the entire investment management industry.

• The Company expanded its footprint within existing clients and added marquee clients such as: AllianceBernstein LP US, Allied Trust Insurance Company, Central Bank of Peru, Community Funds, Inc., Community Health Plan of WA, Crosslight Global Investment Partners, El Paso Community Foundation, Elan Insurance USVI, Inc., Grange Insurance Association, Kayne Anderson Rudnick Investment Management, Le Sphinx Assurances Luxembourg S.A., Marquette Indemnity & Life Insurance Company, McCormick & Company, Incorporated, Mirum Pharmaceuticals, Inc., Rho Capital Partners, Inc., Security Mutual, Southern Vanguard Insurance Co., SSA Marine, Suecia Insurance Company, Universal Insurance Holdings of North America, Inc., and Vault Insurance.

• The Company announced that it won the Technology Provider of the Year Excellence Award for the third consecutive year. The InsuranceAsia News Excellence Awards, which celebrates the best firms in the Asia Pacific (re)insurance market, honored Clearwater for playing a crucial role in helping insurers achieve efficiency and analytical superiority and leveraging new technologies to future-proof their business and the industry.

Certain components of the guidance given above are provided on a non-GAAP basis only without providing a reconciliation to guidance provided on a GAAP basis. Information is presented in this manner because the preparation of such a reconciliation could not be accomplished without "unreasonable efforts." The Company does not have access to certain information that would be necessary to provide such a reconciliation, including non-recurring items that are not indicative of the Company's ongoing operations. The Company does not believe that this information is likely to be significant to an assessment of the Company's ongoing operations.

Conference Call Details

Clearwater Analytics will hold a conference call and webcast on April 30, 2025, at 5:00 p.m. Eastern time to discuss first quarter 2025 financial results, provide a general business update, and respond to analyst questions.

A live webcast of the call will also be available on the Company's investor relations website. Please visit investors.clearwateranalytics.com at least fifteen minutes prior to the start of the event to register, download and install any necessary audio software.

If you are unable to participate live, a replay of the webcast will be available following the conference call on the Company's investor relations website, along with the earnings press release, and related financial tables.

About Clearwater Analytics

Clearwater Analytics (NYSE:CWAN) is transforming investment management with the industry's most comprehensive cloud-native platform for institutional investors across global public and private markets. While legacy systems create risk, inefficiency, and data fragmentation, Clearwater's single-instance, multi-tenant architecture delivers real-time data and AI-driven insights throughout the investment lifecycle. The platform eliminates information silos by integrating portfolio management, trading, investment accounting, reconciliation, regulatory reporting, performance, compliance, and risk analytics in one unified system. Serving leading insurers, asset managers, hedge funds, banks, corporations, and governments, Clearwater supports over $8.8 trillion in assets globally. Learn more at clearwateranalytics.com.

Use of non-GAAP Information

This press release contains certain non-GAAP measures, including non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP effective tax rate, diluted non-GAAP share count and free cash flow.

The non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. However, the Company believes that this non-GAAP information is useful as an additional means for investors to evaluate its operating performance, when reviewed in conjunction with its GAAP financial statements. These measures should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP, and because these amounts are not determined in accordance with GAAP, they should not be used exclusively in evaluating the Company's business and operations. In addition, undue reliance should not be placed upon non-GAAP or operating information because this information is neither standardized across companies nor subjected to the same control activities and audit procedures that produce the Company's GAAP financial results.

The Company's non-GAAP statement of operations measures, including non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP effective tax rate, diluted non-GAAP share count and free cash flow, are adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items that management believes are not indicative of its ongoing operations. These adjusted measures exclude the impact of share-based compensation and eliminate potential differences in results of operations between periods caused by factors such as financing and capital structures, taxation positions or regimes, restructuring, transaction expenses, impairment and other charges. Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP.

Use of Forward Looking Statements

This press release 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 management's beliefs and assumptions and on information currently available to management. Forward-looking statements include information concerning the timing of the consummation of acquisition of Enfusion and the ability to satisfy closing conditions, the Company's possible or assumed future results of operations, business strategies, technology developments, financing and investment plans, dividend policy, competitive position, industry, economic and regulatory environment, potential growth opportunities and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "aim," "may," "plan," "potential," "predict," "project," "seek," "should," "will," "would" or similar expressions and the negatives of those terms, but are not the exclusive means of identifying such statements.

Forward-looking statements involve known and unknown risks, uncertainties, and other factors, many of which are beyond the Company's control, that may cause the Company's actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties may cause actual results to differ materially from Clearwater Analytics' current expectations and include, but are not limited to, the Company's ability to successfully integrate the operations and technology of its recently completed acquisitions of Enfusion, Beacon and Bistro (the "Recent Acquisitions") with those of the Company and to obtain third party data rights, retain and incentivize the employees of the Recent Acquisitions following the close of the Recent Acquisitions, retain the Recent Acquisitions' clients, repay debt to be incurred in connection with the Recent Acquisitions and meet financial covenants to be imposed in connection with such debt, risks that cost savings, synergies and growth from the Recent Acquisitions may not be fully realized or may take longer to realize than expected, the Company's ability to keep pace with rapid technological change and market developments, including artificial intelligence, competitors in its industry, the possibility that market volatility, a downturn in economic conditions or other factors may cause negative trends or fluctuations in the value of the assets on the Company's platform, the Company's ability to manage growth, the Company's ability to attract and retain skilled employees, the possibility that the Company's solutions fail to perform properly, disruptions and failures in the Company's and third parties' computer equipment, cloud-based services, electronic delivery systems, networks and telecommunications systems and infrastructure, the failure to protect the Company, its customers' and/or its vendors' confidential information and/or intellectual property, claims of infringement of others' intellectual property, factors related to the Company's ownership structure as well as other risks and uncertainties detailed in Clearwater Analytics' periodic public filings with the U.S. Securities and Exchange Commission (the "SEC"), including but not limited to those discussed under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 26, 2025 (as amended by Amendment No. 1 thereto, filed with the SEC on March 7, 2025), and in other periodic reports filed by the Company with the SEC. These filings are available at www.sec.gov and on the Company's website.

Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent management's beliefs and assumptions only as of the date of this press release and should not be relied upon as representing the Company's expectations or beliefs as of any date subsequent to the time they are made. The Company does not undertake to and specifically declines any obligation to update any forward-looking statements that may be made from time to time by or on behalf of the Company.

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