Clearwater Analytics Holdings, Inc. (CWAN) Bundle
A Brief History of Clearwater Analytics Holdings, Inc.
Clearwater Analytics Holdings, Inc. has established itself as a leader in providing cloud-based investment management software. Founded in 2004, the company has rapidly grown its client base and expanded its service offerings. As of September 30, 2024, Clearwater Analytics reported a significant increase in annualized recurring revenue (ARR), reflecting robust client acquisition and retention strategies.
Financial Performance
For the three months ended September 30, 2024, Clearwater Analytics achieved a revenue of $115.8 million, representing a 22% increase compared to $94.7 million in the same period of 2023. For the nine months ended September 30, 2024, revenue totaled $325.3 million, up 21% from $269.1 million year-over-year.
| Period | Revenue (in thousands) | Year-over-Year Change |
|---|---|---|
| Q3 2024 | $115,828 | 22% |
| YTD Q3 2024 | $325,338 | 21% |
Cost of Revenue
Clearwater Analytics reported a total cost of revenue of $31.4 million for Q3 2024, an increase of 16% compared to $27.0 million in Q3 2023. The year-to-date cost of revenue for 2024 was $89.4 million, up 13% from $78.8 million in the previous year.
| Period | Cost of Revenue (in thousands) | Year-over-Year Change |
|---|---|---|
| Q3 2024 | $31,357 | 16% |
| YTD Q3 2024 | $89,426 | 13% |
Operating Expenses
Operating expenses for Clearwater Analytics were reported at $77.1 million for Q3 2024, an increase of 5% from $73.5 million in Q3 2023. The year-to-date operating expenses were $224.9 million, up 7% from $209.7 million.
| Period | Operating Expenses (in thousands) | Year-over-Year Change |
|---|---|---|
| Q3 2024 | $77,133 | 5% |
| YTD Q3 2024 | $224,896 | 7% |
Net Income
Net income attributable to Clearwater Analytics Holdings, Inc. for Q3 2024 was $3.6 million, compared to a net loss of $(1.9 million) in Q3 2023. For the nine months ended September 30, 2024, net income was $5.1 million, recovering from a net loss of $(17.2 million) in the same period of 2023.
| Period | Net Income (in thousands) | Year-over-Year Change |
|---|---|---|
| Q3 2024 | $3,629 | — |
| YTD Q3 2024 | $5,096 | — |
Annualized Recurring Revenue (ARR)
As of September 30, 2024, Clearwater Analytics reported an ARR of $456.9 million, up from $362.4 million in the same quarter of the previous year, marking a growth of 26.1%.
| Period | ARR (in thousands) | Year-over-Year Change |
|---|---|---|
| Q3 2024 | $456,941 | 26.1% |
Market Position and Growth Strategy
Clearwater Analytics continues to strengthen its market position through strategic acquisitions, including the recent acquisition of Wilshire Technology, which significantly expanded its client base and service capabilities. The company’s focus on enhancing technology and client services has led to a 99% gross revenue retention rate and a 110% net revenue retention rate as of the end of Q3 2024.
| Metric | Q3 2024 |
|---|---|
| Gross Revenue Retention Rate | 99% |
| Net Revenue Retention Rate | 110% |
Overall, Clearwater Analytics Holdings, Inc. is well-positioned for continued growth in the investment management software space, driven by its innovative solutions and strong market demand. As of September 30, 2024, the company manages approximately $7.3 trillion in assets on its platform, up from $6.4 trillion at the end of 2022.
A Who Owns Clearwater Analytics Holdings, Inc. (CWAN)
Ownership Structure
As of September 30, 2024, Clearwater Analytics Holdings, Inc. owns a significant portion of CWAN Holdings, which consolidates the financial results of the company. The ownership is distributed as follows:
| Ownership Type | Shares Owned | Ownership Percentage |
|---|---|---|
| Clearwater Analytics Holdings, Inc. | 219,563,188 | 88.9% |
| Continuing Equity Owners | 27,424,288 | 11.1% |
| Total | 246,987,476 | 100% |
Class of Shares
The company has multiple classes of shares that affect voting rights and ownership distribution:
| Class of Shares | Shares Outstanding (as of September 30, 2024) | Par Value |
|---|---|---|
| Class A | 172,013,431 | $0.001 |
| Class D | 47,549,757 | $0.001 |
| Total | 219,563,188 |
Equity Ownership of Non-controlling Interests
The non-controlling interests are held by Continuing Equity Owners, which impacts the financial reporting of the company:
| Date | Non-controlling Interest Shares | Ownership Percentage |
|---|---|---|
| September 30, 2024 | 27,424,288 | 11.1% |
| December 31, 2023 | 32,795,347 | 13.5% |
Recent Changes in Ownership
The ownership structure has seen fluctuations within the year. The following table summarizes the changes in ownership:
| Change Type | Shares | Percentage Change |
|---|---|---|
| Increase in Clearwater Analytics Holdings | 10,866,160 | 2.4% |
| Decrease in Continuing Equity Owners | (5,371,059) | (2.4%) |
Financial Performance Indicators
The financial performance of Clearwater Analytics Holdings, Inc. is also relevant to understanding ownership value:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $4,769,000 | ($2,343,000) |
| Earnings Per Share (Class A) | $0.02 | ($0.01) |
| Earnings Per Share (Class D) | $0.02 | ($0.01) |
Future Tax Benefits
Potential future tax benefits related to ownership exchanges are estimated as follows:
| Estimated Future Tax Benefits | Amount |
|---|---|
| Tax Basis Increase | $232 million |
| Associated TRA Liability | $197 million |
These figures illustrate the financial implications of ownership and the potential value for shareholders of Clearwater Analytics Holdings, Inc.
Clearwater Analytics Holdings, Inc. (CWAN) Mission Statement
Mission Overview
The mission of Clearwater Analytics Holdings, Inc. (CWAN) is to provide innovative and comprehensive data management solutions that empower clients to make informed investment decisions. The company aims to streamline the management of financial data and enhance transparency in reporting, thereby fostering trust and operational efficiency among its users.
Strategic Goals
- Deliver cutting-edge technology that integrates seamlessly with existing financial systems.
- Enhance user experience through intuitive interfaces and actionable insights.
- Support clients in navigating the complexities of regulatory compliance and risk management.
Financial Performance
As of September 30, 2024, Clearwater Analytics reported a net income of $4.769 million, a significant improvement from a net loss of $2.343 million in the same period of the previous year. The nine-month period ending September 30, 2024, reflected a net income of $7.280 million compared to a net loss of $19.636 million for the same timeframe in 2023.
Revenue Growth
For the three months ended September 30, 2024, Clearwater achieved total revenue of $115.828 million, up from $94.664 million year-over-year. The nine-month revenue reached $325.338 million, compared to $269.149 million for the same period in 2023, marking a growth of approximately 21%.
| Period | Net Income (Loss) ($ million) | Total Revenue ($ million) |
|---|---|---|
| Q3 2024 | 4.769 | 115.828 |
| Q3 2023 | (2.343) | 94.664 |
| 9M 2024 | 7.280 | 325.338 |
| 9M 2023 | (19.636) | 269.149 |
Client Engagement and Retention
Clearwater Analytics has maintained a strong client retention strategy, achieving a gross revenue retention rate of 99% as of September 30, 2024. This statistic reflects the company's dedication to customer satisfaction and the ongoing value provided to clients.
Annualized Recurring Revenue
The annualized recurring revenue (ARR) as of September 30, 2024, increased to $456.941 million, up from $362.442 million a year earlier, demonstrating a 26.1% growth rate.
| Quarter | Annualized Recurring Revenue ($ million) |
|---|---|
| Q3 2024 | 456.941 |
| Q3 2023 | 362.442 |
Investment in Technology
Clearwater Analytics continues to invest significantly in technology enhancements, with research and development expenses of $36.618 million for Q3 2024, up from $32.250 million in Q3 2023.
Market Position and Competitive Advantage
Positioned as a leader in financial data management, Clearwater Analytics leverages its proprietary technology to provide clients with unparalleled analytics capabilities, thus enhancing decision-making processes. The company’s commitment to innovation is exemplified by its recent acquisition of Wilshire Technology, which expanded its service offerings.
Conclusion on Financial Metrics
Clearwater Analytics maintains a robust financial standing, with total stockholders' equity amounting to $453.619 million as of September 30, 2024. This represents an increase from $409.657 million at the end of the previous fiscal year.
| Metric | Value ($ million) |
|---|---|
| Total Stockholders' Equity | 453.619 |
| Previous Year End Equity | 409.657 |
How Clearwater Analytics Holdings, Inc. (CWAN) Works
Company Overview
Clearwater Analytics Holdings, Inc. (CWAN) provides cloud-based investment accounting, reporting, and analytics solutions for institutional investors. As of September 30, 2024, Clearwater Analytics has reported an annualized recurring revenue of $456.9 million, reflecting a 26.1% increase from the previous year.
Revenue Generation
The company generated total revenue of $115.8 million for the three months ended September 30, 2024, compared to $94.7 million in the same period of 2023, marking a 22% increase. For the nine months ended September 30, 2024, revenue reached $325.3 million, up from $269.1 million in 2023, representing a 21% growth.
| Period | Revenue (in millions) | Growth (%) |
|---|---|---|
| Q3 2024 | $115.8 | 22% |
| Q3 2023 | $94.7 | - |
| 9M 2024 | $325.3 | 21% |
| 9M 2023 | $269.1 | - |
Client Base and Retention Rates
As of September 30, 2024, Clearwater Analytics reported a gross revenue retention rate of 99%, consistent with the previous year. The net revenue retention rate increased to 114%.
Operating Expenses
Operating expenses for the three months ended September 30, 2024, totaled $77.1 million, compared to $73.5 million for the same period in 2023. For the nine months ended September 30, 2024, operating expenses were $224.9 million, up from $209.7 million in 2023.
| Period | Operating Expenses (in millions) |
|---|---|
| Q3 2024 | $77.1 |
| Q3 2023 | $73.5 |
| 9M 2024 | $224.9 |
| 9M 2023 | $209.7 |
Net Income and Earnings Per Share
Clearwater Analytics reported a net income of $4.8 million for the three months ended September 30, 2024, compared to a net loss of $2.3 million in the same period of 2023. For the nine months ended September 30, 2024, the company had a net income of $7.3 million compared to a net loss of $19.6 million in 2023.
| Period | Net Income (in millions) | Earnings Per Share |
|---|---|---|
| Q3 2024 | $4.8 | $0.02 |
| Q3 2023 | ($2.3) | ($0.01) |
| 9M 2024 | $7.3 | $0.02 |
| 9M 2023 | ($19.6) | ($0.09) |
Equity and Stock Performance
As of September 30, 2024, the weighted average number of shares outstanding was 231.5 million (diluted). The company has a stock option plan with 10.3 million options outstanding at a weighted average exercise price of $8.24.
Acquisitions
On April 22, 2024, Clearwater Analytics acquired Wilshire Technology for $40.1 million in cash. This acquisition aims to enhance Clearwater's capabilities in risk and performance analytics.
Cash Flow and Investments
For the nine months ended September 30, 2024, Clearwater Analytics reported net cash provided by operating activities of $103.5 million. As of September 30, 2024, the total cash and cash equivalents were $228.7 million.
| Cash Flow Activity (in millions) | 2024 | 2023 |
|---|---|---|
| Net Cash from Operating Activities | $103.5 | $60.5 |
| Net Cash Used in Investing Activities | ($54.8) | ($95.6) |
| Net Cash Used in Financing Activities | ($42.5) | ($9.9) |
| Cash and Cash Equivalents | $228.7 | $205.7 |
Future Outlook
Clearwater Analytics continues to focus on growing its client base and enhancing service offerings, which is reflected in its strong revenue growth and retention metrics.
How Clearwater Analytics Holdings, Inc. (CWAN) Makes Money
Revenue Generation Model
Clearwater Analytics Holdings, Inc. generates revenue primarily through fees for providing clients access to its SaaS platform. The revenue is derived from two main sources:
- Monthly fees based on a percentage of the average daily value of assets under management (AUM) on their platform.
- Fixed base fees charged monthly in arrears.
As of September 30, 2024, Clearwater reported an annualized recurring revenue (ARR) of $456,941,000, marking a 26.1% increase from the previous year.
Client Base and Growth
The company has experienced significant growth in its client base, which contributed to its revenue increase. The details are as follows:
| Period | Annualized Recurring Revenue (in thousands) | Client Growth Contribution (in millions) |
|---|---|---|
| Q1 2024 | $402,326 | $10.8 |
| Q2 2024 | $427,189 | $21.6 |
| Q3 2024 | $456,941 | — |
Revenue Retention Rates
Clearwater's revenue retention rates have remained robust, indicating a strong value proposition for existing clients:
- Gross revenue retention rate: 99% for Q3 2024, compared to 98% in Q3 2023.
- Net revenue retention rate: 114% for Q3 2024, reflecting growth from existing clients.
Financial Performance Overview
For the three months ended September 30, 2024, Clearwater reported the following financial results:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenue | $115,828,000 | $94,664,000 | $21,164,000 (22% increase) |
| Gross Profit | $84,471,000 | $67,651,000 | $16,820,000 (24.8% increase) |
| Net Income | $4,769,000 | $(2,343,000) | $7,112,000 |
Cost Structure
The cost of revenue for Clearwater consists of expenses related to service delivery, including client services, onboarding, and data acquisition costs. For the three months ended September 30, 2024, the cost of revenue was:
| Cost Component | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Cost of Revenue | $31,357,000 | $27,013,000 | $4,344,000 (16% increase) |
| Equity-based Compensation | $3,460,000 | $3,346,000 | $114,000 (3% increase) |
Operating Expenses
Operating expenses for Clearwater Analytics are categorized into research and development, sales and marketing, and general administrative costs. The figures for Q3 2024 are as follows:
| Expense Category | Q3 2024 | Q3 2023 |
|---|---|---|
| Research and Development | $36,618,000 | $32,250,000 |
| Sales and Marketing | $17,889,000 | $15,020,000 |
| General and Administrative | $22,626,000 | $26,268,000 |
Net Income and Earnings Per Share
As of September 30, 2024, Clearwater reported a net income of $4,769,000, with earnings per share (EPS) as follows:
| Class | Basic EPS | Diluted EPS |
|---|---|---|
| Class A | $0.02 | $0.02 |
| Class D | $0.02 | $0.02 |
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Resources:
- Clearwater Analytics Holdings, Inc. (CWAN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Clearwater Analytics Holdings, Inc. (CWAN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Clearwater Analytics Holdings, Inc. (CWAN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.