Clearwater Analytics Announces Second Quarter 2024 Financial Results

Record Quarterly Revenue of $106.8 Million, Up 19% Year-Over-Year

Net Income of $0.3 Million; Adjusted EBITDA of $33.4 Million, Up 35% Year-Over-Year

Gross Revenue Retention Rate of 99%; Net Revenue Retention Rate of 110%

Annualized Recurring Revenue of $427.2 Million, Up 22% Year-Over-Year

Operating Cash Flows of $43.9 Million, Up 108% Year-Over-Year

BOISE, Idaho, July 31, 2024 /PRNewswire/ -- Clearwater Analytics Holdings, Inc. CWAN ("Clearwater Analytics" or the "Company"), a leading worldwide provider of SaaS-based investment management, accounting, reporting, and analytics solutions, today announced its financial results for the quarter ended June 30, 2024.

"We had a very strong quarter where ARR grew 22% year on year, revenue grew 19% and adjusted EBITDA grew 35%. Gross revenue retention was 99% for a second successive quarter, which is a strong reflection of the value our platform provides to our customers. Unit economics continues to be strong and ahead of stated goals because of the power of the single instance, multi-tenant platform and the network effect it produces. We continue to be very excited about client and prospect receptivity to the new products we are developing, often in partnership with our clients. These co-development efforts improve client satisfaction, drive revenue growth and make our innovation more targeted. Finally, our free cash flows grew by 117% compared to the previous year," said Sandeep Sahai, CEO at Clearwater Analytics. "Also in the second quarter, we completed the acquisition of an advanced analytics platform from Wilshire Advisors extending our capabilities in risk and performance. Looking further ahead, we continue to make meaningful investments in generative AI to drive responsiveness and completeness to customer requests, improve data quality and drive revenue growth. These financial results and continued client momentum make us enthusiastic about what lies ahead for Clearwater Analytics."

Second Quarter 2024 Financial Results Summary

  • Revenue: Total revenue for the second quarter of 2024 was $106.8 million, an increase of 18.8%, from $89.9 million in the second quarter of 2023.



  • Gross Profit: Gross profit for the second quarter of 2024 increased to $76.9 million, which equates to a 72.0% GAAP gross margin, compared with gross profit of $62.9 million and GAAP gross margin of 70.0% in the second quarter of 2023. Non-GAAP gross profit for the second quarter of 2024 was $82.7 million, which equates to a 77.5% non-GAAP gross margin and an increase of 170 basis points over the second quarter of 2023.



  • Net Income/(Loss): Net income for the second quarter of 2024 was $0.3 million, compared with net loss of $11.9 million in the second quarter of 2023.



  • Adjusted EBITDA: Adjusted EBITDA for the second quarter of 2024 was $33.4 million, an increase of 34.7%, from $24.8 million in the second quarter of 2023. Adjusted EBITDA margin for the second quarter of 2024 was 31.3%, an increase of 370 basis points over the second quarter of 2023.



  • Cash Flows: Operating cash flows for the second quarter of 2024 were $43.9 million. Free cash flows for the second quarter of 2024 were $42.4 million, an increase of 116.9%, from $19.6 million in the second quarter of 2023. Cash flows improved from both stronger income as well as positive working capital changes from better collections in the quarter.



  • Net Loss Per Share and Non-GAAP Net Income Per Share attributable to Clearwater Analytics Holdings, Inc.: Net loss per basic and diluted share was less than $0.01 in the second quarter of 2024. Non-GAAP net income per basic share was $0.12, and non-GAAP net income per diluted share was $0.10 in the second quarter of 2024.



  • Cash, cash equivalents, and investments were $297.6 million as of June 30, 2024. Total debt, net of debt issuance cost, was $47.9 million as of June 30, 2024.

Second Quarter 2024 Key Metrics Summary

  • Annualized Recurring Revenue: As of June 30, 2024, annualized recurring revenue ("ARR") reached $427.2 million, an increase of 22.2% from $349.5 million as of June 30, 2023.



    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 June 30, 2024, the gross revenue retention rate was 99%, compared to 98% as of June 30, 2023.



    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 June 30, 2024, the net revenue retention rate was 110%, compared to 110% as of March 31, 2024 and to 109% as of June 30, 2023.



    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 Analytics continued on its journey towards being a multi-product company and successfully drove cross-sell and upsell in the second quarter. Highlights include:
    • Clearwater PRISM clients, including Erste Asset Management GmbH and M&G Investments, have adopted Clearwater PRISM for enhanced client portal and reporting. Clearwater announced that Erste Asset Management GmbH, one of the leading asset managers in Central and Eastern Europe and managing €81.4 billion in assets, will leverage Clearwater PRISM to aggregate multi-asset client investment data, help increase asset flows and strengthen client service. M&G Investments, a leading international asset manager and part of M&G plc, selected Clearwater to automate investment management and regulatory reporting and support the complex needs of M&G's global insurance clients. With a white-labeled version of Clearwater's platform, M&G's insurance clients will have access to an M&G web portal and rely on Clearwater PRISM for monthly report generation, providing M&G's insurance clients with a complete view of their investments and the ability to meet complex multi-basis accounting requirements.



    • A growing roster of clients use both Clearwater's JUMP solution for OMS/PMS and Clearwater's accounting and reconciliation solution. Clearwater Analytics announced that Galilee Asset Management ("Galilee AM") selected Clearwater Analytics as its enterprise standard for investment management. Galilee AM will deploy Clearwater Analytics to support its rapid growth and consolidate its activities after acquiring several investment management companies.



    • The Clearwater for Stable Value solution was selected by Franklin Templeton to help drive the growth of its stable value fund business. Clearwater for Stable Value will provide Franklin Templeton with scalable investment technology, daily portfolio insights, and stable value-specific capabilities to support its expansion into separate accounts and new mandates. Franklin Templeton's team will leverage this enhanced technology to effectively handle the nuanced aspects of managing stable value funds, including complex fund structures, securities, and specialized accounting treatment.



    • Clearwater Analytics announced that AXA XL's alternative capital team selected Clearwater to provide strategic support for a portion of its investment portfolio. As one of the world's largest property and casualty re/insurers, AXA XL provides insurance and risk management products and services for mid-sized companies through to large multinationals, and reinsurance solutions to insurance companies globally. Clearwater was chosen for its proven reliability, accuracy, and comprehensive ability to meet their complex accounting book of record and regulatory requirements, including customized general ledger entries.



  • Clearwater Analytics hosted Clearwater Connect in London in the second quarter, where attendees gained valuable insight from top leaders in the industry, connected with over 150+ of their peers from around the world, and participated in expert-led discussions on topics such as trends in alternative investing, navigating regulations, managing investments in turbulent times and more. Clearwater announced the winners of its Client Awards, highlighting teams and firms that have achieved growth and operational excellence in investment accounting with Clearwater's award-winning investment accounting platform. Company winners included Aegon AM, Antares, Aviva, Resolution Re, and RiverStone International.



  • On the heels of our successful Clearwater Connect users' conference, the Company plans to host another Clearwater Connect in Boise on September 17-18, 2024, where current and prospective users will have the opportunity to significantly enhance their knowledge of the world's most comprehensive investment management, accounting, and reporting solutions.



  • Clearwater Analytics published its 2024 Insurance Investment Outsourcing Report ("2024 IIOR"), the eleventh annual 'Yellow Pages' of insurance-focused asset managers and a go-to resource for insurance firms outsourcing investment management. The 2024 IIOR includes 70 asset managers and 12 investment consultants, the latter which are new for this year. This report is highly regarded in the industry and leveraged by numerous insurers to identify asset managers and consultants who focus on their space. The report shows the outsourcing trend continues to grow with $3.6 trillion in insurance AUM reported, and over $900 million of consultant assets under advisement.



  • Clearwater Analytics announced the release of its 2024 State of Alternatives study. The report, encompassing over 230 executive participants from sectors including insurance, wealth and asset management, corporate and government entities, pensions and endowments with $10 trillion in assets under management (AUM), delivers an overview of the emerging trends, opportunities and challenges related to alternative investments. The 2024 State of Alternatives study highlighted key factors and developments — including that 55% of institutional investors plan to boost their alternative investments — that will shape the alternatives landscape over the short-, medium- and long- term. Per the study, respondents were unanimous about needing better resources and technology to efficiently manage alternative investments and mitigate the impact of regulatory and operational challenges.



  • Clearwater Analytics won the RegTech Insight Europe Awards 2024 for Best ESG Regulatory Solution. This recognition highlights Clearwater's commitment to simplifying ESG data collection, data analysis, risk management, disclosure and reporting for its growing base of global clients.

Third Quarter and Full Year 2024 Guidance



Third Quarter 2024



Full Year 2024

Revenue

$113 million to

$114 million



$442 million to

$444 million

Year-over-Year Growth %

~19% to 20%



~20% to 21%

Adjusted EBITDA

$36 million



$140 million

Adjusted EBITDA Margin %

~32%



~32%

Total Equity-based compensation expense and related payroll taxes





~$106 million

Depreciation and Amortization





~$12 million

Non-GAAP effective tax rate





25 %

Diluted non-GAAP share count





~258 million  

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 July 31, 2024, at 5:00 p.m. Eastern time to discuss second quarter 2024 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 CWAN, a global, industry-leading SaaS solution, automates the entire investment lifecycle. With a single instance, multi-tenant architecture, Clearwater offers award-winning investment portfolio planning, performance reporting, data aggregation, reconciliation, accounting, compliance, risk, and order management. Each day, leading insurers, asset managers, corporations, and governments use Clearwater's trusted data to drive efficient, scalable investing on more than $7.3 trillion in assets spanning traditional and alternative asset types. Additional information about Clearwater can be found 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 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 Clearwater Analytics' 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 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 and status as a "controlled company" 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, 2023 filed on February 29, 2024, and in other periodic reports filed by Clearwater Analytics with the SEC. These filings are available at www.sec.gov and on Clearwater Analytics' 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 Clearwater Analytics' expectations or beliefs as of any date subsequent to the time they are made.  Clearwater Analytics 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 Clearwater Analytics.

###

Clearwater Analytics Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except share amounts and per share amounts, unaudited)





June 30



December 31



2024



2023

Assets







Current assets:







Cash and cash equivalents

$           190,095



$           221,765

Short-term investments

67,819



74,457

Accounts receivable, net

97,220



92,091

Prepaid expenses and other current assets

27,577



27,683

Total current assets

382,711



415,996

Property and equipment, net

15,158



15,349

Operating lease right-of-use assets, net

28,084



22,554

Deferred contract costs, non-current

5,845



6,439

Intangible assets, net

34,607



26,132

Goodwill

72,245



45,338

Long-term investments

39,718



21,495

Other non-current assets

6,779



5,440

Total assets

$           585,147



$           558,743

Liabilities and Stockholders' Equity







Current liabilities:







Accounts payable

$               2,962



$               3,062

Accrued expenses and other current liabilities

49,844



49,535

Notes payable, current portion

2,750



2,750

Operating lease liability, current portion

7,696



6,551

Tax receivable agreement liability

16,749



18,894

Total current liabilities

80,001



80,792

Notes payable, less current maturities and unamortized debt issuance costs

45,183



45,828

Operating lease liability, less current portion

21,306



16,948

Tax receivable agreement, less current portion

6,500



Other long-term liabilities

3,486



5,518

Total liabilities

156,476



149,086

Stockholders' Equity







Class A common stock, par value $0.001 per share; 1,500,000,000 shares authorized,

160,421,799 shares issued and outstanding as of June 30, 2024, 127,604,185 shares issued and

outstanding as of December 31, 2023

160



128

Class B common stock, par value $0.001 per share; 500,000,000 shares authorized, 111,191

shares issued and outstanding as of June 30, 2024 and  December 31, 2023



Class C common stock, par value $0.001 per share; 500,000,000 shares authorized, 27,424,288

shares issued and outstanding as of June 30, 2024, 32,684,156 shares issued and outstanding as

of December 31, 2023

27



33

Class D common stock, par value $0.001 per share; 500,000,000 shares authorized, 58,304,726

shares issued and outstanding as of June 30, 2024, 82,955,977 shares issued and outstanding as

of December 31, 2023

58



83

Additional paid-in-capital

549,580



532,507

Accumulated other comprehensive income

832



2,909

Accumulated deficit

(170,050)



(181,331)

Total stockholders' equity attributable to Clearwater Analytics Holdings, Inc.

380,607



354,329

Non-controlling interests

48,064



55,328

Total stockholders' equity

428,671



409,657

Total liabilities and stockholders' equity

$           585,147



$           558,743

 

Clearwater Analytics Holdings, Inc.

Consolidated Statements of Operations

(In thousands, except share amounts and per share amounts, unaudited)





Three Months Ended

June 30,



Six Months Ended

June 30,



2024



2023



2024



2023

Revenue

$         106,791



$           89,879



$         209,510



$         174,485

Cost of revenue(1)

29,890



26,954



58,069



51,779

Gross profit

76,901



62,925



151,441



122,706

Operating expenses:















Research and development(1)

35,360



29,848



73,036



57,948

Sales and marketing(1)

15,169



14,331



31,480



29,029

General and administrative(1)

22,528



25,871



43,248



49,177

Total operating expenses

73,057



70,050



147,764



136,154

Income (loss) from operations

3,844



(7,125)



3,677



(13,448)

Interest income, net

(1,841)



(1,333)



(3,901)



(2,689)

Tax receivable agreement expense

5,915



6,573



6,201



6,678

Other income, net

(585)



(315)



(1,115)



(234)

Income (loss) before income taxes

355



(12,050)



2,492



(17,203)

Provision for (benefit from) income taxes

79



(174)



(19)



90

Net income (loss)

276



(11,876)



2,511



(17,293)

Less: Net income (loss) attributable to non-controlling

interests

706



(955)



1,044



(1,988)

Net income (loss) attributable to Clearwater

Analytics Holdings, Inc.

$               (430)



$         (10,921)



$             1,467



$         (15,305)

















Net income (loss) per share attributable to Class A and

Class D common stockholders stock:















Basic

$              (0.00)



$              (0.06)



$                0.01



$              (0.08)

Diluted

$              (0.00)



$              (0.06)



$                0.01



$              (0.08)

















Weighted average shares of Class A and Class D

common stock outstanding:















Basic

218,349,567



198,046,275



215,804,515



195,865,881

Diluted

218,349,567



198,046,275



254,208,965



195,865,881



(1) Amounts include equity-based compensation as follows:



Cost of revenue

$              3,273



$              3,248



$              6,419



$              5,491

Operating expenses:















Research and development

9,182



5,971



18,093



10,626

Sales and marketing

2,692



3,246



6,513



7,211

General and administrative

9,711



16,105



18,058



28,442

Total equity-based compensation expense

$           24,858



$           28,570



$           49,083



$           51,770

 

Clearwater Analytics Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands, unaudited)





Three Months Ended June 30,

Six Months Ended June 30,



2024



2023



2024



2023

OPERATING ACTIVITIES















Net income (loss)

$                   276



$             (11,876)



$                2,511



$             (17,293)

Adjustments to reconcile net income (loss) to net cash provided by

operating activities:















Depreciation and amortization

2,941



2,412



5,491



4,860

Noncash operating lease cost

2,312



1,917



4,545



3,769

Equity-based compensation

24,858



28,570



49,083



51,770

Amortization of deferred contract acquisition costs

1,196



1,150



2,413



2,351

Amortization of debt issuance costs, included in interest expense

70



69



140



139

Deferred tax benefit

(970)



(174)



(1,992)



(210)

Accretion of discount on investments

(602)



(380)



(1,177)



(396)

Realized (gain) loss on investments

24



(18)



24



(89)

Changes in operating assets and liabilities:















Accounts receivable, net

(42)



(3,759)



(4,718)



(9,898)

Prepaid expenses and other assets

3,105



1,046



(1,093)



(540)

Deferred contract acquisition costs

(1,024)



(701)



(1,771)



(1,287)

Accounts payable

271



395



335



100

Accrued expenses and other liabilities

5,256



(4,410)



(4,183)



(11,204)

Tax receivable agreement liability

6,199



6,895



4,355



7,000

Net cash provided by operating activities

43,870



21,136



53,963



29,072

INVESTING ACTIVITIES















Purchases of property and equipment

(1,454)



(1,576)



(2,947)



(3,293)

Purchase of held to maturity investments

(3,009)





(3,009)



Purchases of available-for-sale investments

(35,493)



(57,523)



(67,390)



(91,684)

Proceeds from sale of available-for-sale investments



3,960





5,950

Proceeds from maturities of investments

38,307



2,000



59,842



3,242

Acquisition of business, net of cash acquired

(40,121)





(40,121)



Payment of initial direct costs for operating leases

(104)





(104)



Net cash used in investing activities

(41,874)



(53,139)



(53,729)



(85,785)

FINANCING ACTIVITIES















Proceeds from exercise of options

5



486



109



3,179

Taxes paid related to net share settlement of equity awards

(4,307)



(1,172)



(33,081)



(8,447)

Repayments of borrowings



(687)



(688)



(1,374)

Payment of business acquisition holdback liability





(780)



Proceeds from employee stock purchase plan

2,795



2,595



2,795



2,595

Tax distributions





(8)



Net cash used in financing activities

(1,507)



1,222



(31,653)



(4,047)

Effect of exchange rate changes on cash and cash equivalents

(38)



152



(251)



252

Change in cash and cash equivalents during the period

451



(30,629)



(31,670)



(60,508)

Cash and cash equivalents, beginning of period

189,644



220,845



221,765



250,724

Cash and cash equivalents, end of period

$             190,095



$             190,216



$             190,095



$             190,216

SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATION















Cash paid for interest

$                   851



$                   870



$                1,762



$                2,220

Cash paid for income taxes

$                   144



$                   759



$                   590



$                1,068

NON-CASH INVESTING AND FINANCING ACTIVITIES















Purchase of property and equipment included in accounts payable

and accrued expense

$                     55



$                       1



$                     55



$                       1

Tax distributions payable to Continuing Equity Owners included in

accrued expenses

$                3,209



$                3,994



$                3,209



$                3,994

 

Clearwater Analytics Holdings, Inc.

Reconciliation of Net Loss to Adjusted EBITDA

(In thousands, unaudited)





Three Months Ended June 30,



2024



2023



(in thousands, except percentages)

Net income (loss)

$                 276



0 %



$          (11,876)



(13 %)

Adjustments:















Interest income, net

(1,841)



(2 %)



(1,333)



(1 %)

Depreciation and amortization

2,941



3 %



2,412



3 %

Equity-based compensation expense and related

payroll taxes

25,151



24 %



28,685



32 %

Tax receivable agreement expense

5,915



6 %



6,573



7 %

Transaction expenses

875



1 %



257



0 %

Other expenses(1)

131



0 %



108



0 %

Adjusted EBITDA

33,448



31 %



24,826



28 %

Revenue

$         106,791



100 %



$           89,879



100 %







Six Months Ended June 30,



2024



2023



(in thousands, except percentages)

Net income (loss)

$              2,511



1 %



$          (17,293)



(10 %)

Adjustments:















Interest income, net

(3,901)



(2 %)



(2,689)



(2 %)

Depreciation and amortization

5,491



3 %



4,860



3 %

Equity-based compensation expense and related

payroll taxes

53,632



26 %



53,192



30 %

Tax receivable agreement expense

6,201



3 %



6,678



4 %

Transaction expenses

1,678



1 %



1,550



1 %

Other expenses(1)

38



0 %



1,069



1 %

Adjusted EBITDA

65,650



31 %



47,367



27 %

Revenue

$         209,510



100 %



$         174,485



100 %



(1)  Other expenses include gain on investments, management fees to our investors, income taxes, and foreign exchange gains and losses.





Three Months Ended June 30,



Six Months Ended June 30,



2024



2023



2024



2023



(in thousands)

Amortization of prepaid management fees and

reimbursable expenses

637



597



1,172



1,213

Provision for (benefit from) income tax expense

79



(174)



(19)



90

Other income, net

(585)



(315)



(1,115)



(234)

Total other expenses

$                 131



$                 108



$                   38



$              1,069

 

Clearwater Analytics Holdings, Inc.

Reconciliation of Free Cash Flow

(In thousands, unaudited)





Three Months Ended June 30,



Six Months Ended June 30,



2024



2023



2024



2023

Net cash provided by operating activities

$           43,870



$           21,136



$           53,963



$           29,072

Less: Purchases of property and equipment

1,454



1,576



2,947



3,293

Free Cash Flow

$           42,416



$           19,560



$           51,016



$           25,779

 

Clearwater Analytics Holdings, Inc.

Reconciliation of Non-GAAP Information

(In thousands, except share amounts and per share amounts, unaudited)





Three Months Ended June 30,



Six Months Ended June 30,



2024



2023



2024



2023

Revenue

$      106,791



$        89,879



$      209,510



$      174,485

















Gross profit

$        76,901



$        62,925



$      151,441



$      122,706

Adjustments:















Equity-based compensation expense and related

payroll taxes

3,318



3,260



6,840



5,735

Depreciation and amortization

2,494



1,930



4,596



3,903

Gross profit, non-GAAP

$        82,713



$        68,115



$      162,877



$      132,344

As a percentage of revenue, non-GAAP

77 %



76 %



78 %



76 %

















Cost of Revenue

$        29,890



$        26,954



$        58,069



$        51,779

Adjustments:















Equity-based compensation expense and related

payroll taxes

3,318



3,260



6,840



5,735

Depreciation and amortization

2,494



1,930



4,596



3,903

Cost of revenue, non-GAAP

$        24,078



$        21,764



$        46,633



$        42,141

As a percentage of revenue, non-GAAP

23 %



24 %



22 %



24 %

















Research and development

$        35,360



$        29,848



$        73,036



$        57,948

Adjustments:















Equity-based compensation expense and related

payroll taxes

9,306



6,028



21,180



11,147

Depreciation and amortization

164



253



365



531

Research and development, non-GAAP

$        25,890



$        23,567



$        51,491



$        46,270

As a percentage of revenue, non-GAAP

24 %



26 %



25 %



27 %

















Sales and marketing

$        15,169



$        14,331



$        31,480



$        29,029

Adjustments:















Equity-based compensation expense and related

payroll taxes

2,772



3,262



6,941



7,587

Depreciation and amortization

155



145



290



298

Sales and marketing, non-GAAP

$        12,242



$        10,924



$        24,249



$        21,144

As a percentage of revenue, non-GAAP

11 %



12 %



12 %



12 %

















General and administrative

$        22,528



$        25,871



$        43,248



$        49,177

Adjustments:















Equity-based compensation expense and related

payroll taxes

9,755



16,135



18,671



28,723

Depreciation and amortization

128



84



240



128

Amortization of prepaid management fees and

reimbursable expenses

637



597



1,172



1,213

Transaction expenses

875



257



1,678



1,550

General and administrative, non-GAAP

$        11,133



$          8,798



$        21,487



$        17,563

As a percentage of revenue, non-GAAP

10 %



10 %



10 %



10 %

















Loss from operations

$          3,844



$        (7,125)



$          3,677



$      (13,448)

Adjustments:















Equity-based compensation expense and related

payroll taxes

25,151



28,685



53,632



53,192

Depreciation and amortization

2,941



2,412



5,491



4,860

Amortization of prepaid management fees and

reimbursable expenses

637



597



1,172



1,213

Transaction expenses

875



257



1,678



1,550

Income from operations, non-GAAP

$        33,448



$        24,826



$        65,650



$        47,367

As a percentage of revenue, non-GAAP

31 %



28 %



31 %



27 %

















Net income (loss)

$             276



$      (11,876)



$          2,511



$      (17,293)

Adjustments:















Equity-based compensation expense and related

payroll taxes

25,151



28,685



53,632



53,192

Depreciation and amortization

2,941



2,412



5,491



4,860

Tax receivable agreement expense

5,915



6,573



6,201



6,678

Amortization of prepaid management fees and

reimbursable expenses

637



597



1,172



1,213

Transaction expenses

875



257



1,678



1,550

Tax impacts of adjustments to net income (loss)(1)

(8,968)



(6,619)



(17,667)



(12,570)

Net income, non-GAAP

$        26,827



$        20,029



$        53,018



$        37,630

As a percentage of revenue, non-GAAP

25 %



22 %



25 %



22 %

















Net income per share - basic, non-GAAP

$            0.12



$            0.10



$            0.25



$            0.19

Net income per share - diluted, non-GAAP

$            0.10



$            0.08



$            0.21



$            0.15

















Weighted-average common shares outstanding - basic

218,349,567



198,046,275



215,804,515



195,865,881

Weighted-average common shares outstanding -

diluted

256,090,273



252,249,228



254,208,965



256,412,731



(1) The non-GAAP effective tax rate was 25% for the three and six months ended June 30, 2024 and 2023, respectively, and has been used to adjust the provision for income taxes for non-GAAP net income and non-GAAP basic and diluted net income per share.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/clearwater-analytics-announces-second-quarter-2024-financial-results-302211441.html

SOURCE Clearwater Analytics Holdings, Inc.

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