Clearwater Analytics Holdings, Inc. (CWAN): Business Model Canvas [11-2024 Updated]
- ✓ Fully Editable: Tailor To Your Needs In Excel Or Sheets
- ✓ Professional Design: Trusted, Industry-Standard Templates
- ✓ Pre-Built For Quick And Efficient Use
- ✓ No Expertise Is Needed; Easy To Follow
Clearwater Analytics Holdings, Inc. (CWAN) Bundle
In the fast-evolving world of finance, Clearwater Analytics Holdings, Inc. (CWAN) stands out with its innovative business model. By leveraging cloud-native solutions and a subscription-based revenue model, Clearwater delivers exceptional investment analytics tailored for a diverse clientele, including corporations, government entities, and asset managers. Discover how their strategic partnerships, key activities, and unique value propositions create a robust framework for success in the competitive financial landscape.
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Key Partnerships
Collaborations with financial institutions
Clearwater Analytics has established partnerships with various financial institutions to enhance its service offerings and expand its market reach. As of September 30, 2024, the company reported an annualized recurring revenue of $456,941,000, reflecting a 26.1% increase from the previous year, largely attributed to its growing client base which includes major financial entities.
These collaborations allow Clearwater to integrate its analytics platform into the existing ecosystems of these institutions, facilitating better asset management solutions. The company manages approximately $7.3 trillion in assets as of December 31, 2023, which underscores the scale and significance of its partnerships.
Strategic alliances with technology providers
In 2024, Clearwater Analytics entered into a strategic alliance with Wilshire Advisors LLC to acquire Wilshire Technology, which includes risk and performance analytics solutions. The acquisition, valued at $40.1 million, enables Clearwater to enhance its analytics capabilities and offer co-branded services under Clearwater Wilshire Analytics.
This partnership is crucial for integrating advanced technology into Clearwater's platform, allowing for enhanced data analytics and risk assessment tools that provide clients with superior investment insights. The integration of Wilshire's technology is expected to drive further growth in Clearwater's annualized recurring revenue.
Partnerships for data acquisition and integration
Clearwater Analytics relies on strategic partnerships for data acquisition that enhances its analytics capabilities. The company incurs costs related to data purchases, which are integral to its service delivery. In the nine months ended September 30, 2024, Clearwater reported a cost of revenue of $89,426,000, reflecting investments in data acquisition necessary for maintaining its competitive edge.
These partnerships facilitate seamless integration of data into Clearwater's platform, which is essential for delivering accurate and timely analytics to clients. The company's gross revenue retention rate was reported at 99% for the same period, indicating strong client satisfaction and the effectiveness of its data-driven solutions.
| Partnership Type | Details | Financial Impact |
|---|---|---|
| Financial Institutions | Collaborations to enhance asset management services | $7.3 trillion in assets managed |
| Technology Providers | Acquisition of Wilshire Technology for advanced analytics | $40.1 million acquisition cost |
| Data Acquisition | Partnerships for sourcing essential data | $89,426,000 cost of revenue (9 months ended September 30, 2024) |
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Key Activities
Development of SaaS investment analytics platform
The primary activity for Clearwater Analytics Holdings, Inc. (CWAN) is the development and enhancement of its Software as a Service (SaaS) investment analytics platform. This platform is designed to provide real-time investment data and analytics to clients, facilitating better decision-making regarding asset management.
As of September 30, 2024, the total assets loaded on the platform amounted to $7.3 trillion, reflecting substantial growth from $6.4 trillion in 2022 . The annualized recurring revenue (ARR) increased by 26.1% year-over-year, reaching $456.9 million for the third quarter of 2024 .
Onboarding and supporting clients
Client onboarding and support are crucial activities that ensure customer satisfaction and retention. Clearwater has maintained a gross revenue retention rate of 99% as of September 30, 2024, indicating strong customer loyalty . The company has successfully onboarded new clients and integrated additional assets from existing clients, contributing to the overall revenue growth.
In the nine months ended September 30, 2024, Clearwater reported a net income of $7.3 million, compared to a net loss of $19.6 million in the same period of the previous year . This turnaround highlights the effectiveness of their client support strategies, which include dedicated personnel for customer service and technical assistance.
Continuous improvement of technology and services
Clearwater Analytics emphasizes continuous improvement in both technology and service offerings. The company invests significantly in research and development, with expenses reaching $36.6 million for the third quarter of 2024 . This investment aims to enhance platform capabilities, improve user experience, and integrate advanced analytics features.
Sales and marketing efforts also play a role in this continuous improvement, with expenses totaling $17.9 million for the same quarter, aimed at expanding market reach and attracting new clients .
| Key Activity | Metrics | Values |
|---|---|---|
| Assets Loaded on Platform | 2023 | $6.4 trillion |
| Assets Loaded on Platform | 2024 | $7.3 trillion |
| Annualized Recurring Revenue (ARR) | Q3 2024 | $456.9 million |
| Gross Revenue Retention Rate | 2024 | 99% |
| Net Income | Q3 2024 | $7.3 million |
| Net Loss | Q3 2023 | ($19.6 million) |
| Research and Development Expenses | Q3 2024 | $36.6 million |
| Sales and Marketing Expenses | Q3 2024 | $17.9 million |
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Key Resources
Proprietary software and technology infrastructure
Clearwater Analytics develops its proprietary software to manage investment data for institutional investors. As of September 30, 2024, the company reported an annualized recurring revenue of $456.9 million, reflecting a 26.1% increase from the previous year. This growth is largely attributed to the expansion of Clearwater's technology platform, which handles approximately $7.3 trillion in assets under management (AUM) .
Skilled workforce with expertise in finance and technology
Clearwater Analytics employs a diverse workforce, with approximately 1,200 employees as of mid-2024. The company invests significantly in its workforce, with equity-based compensation expenses totaling $75.1 million for the nine months ended September 30, 2024. This investment underscores Clearwater's commitment to attracting and retaining top talent in finance and technology .
Comprehensive data sets covering global investments
Clearwater Analytics maintains extensive data sets that encompass a wide range of global investments. The company's platform integrates data from various sources, allowing clients to access real-time analytics and reporting. As of September 30, 2024, Clearwater reported total revenue of $325.3 million for the nine months, indicating robust demand for its data-driven services .
| Resource Type | Description | Financial Impact |
|---|---|---|
| Proprietary Software | Investment management platform handling $7.3 trillion AUM | $456.9 million ARR (2024) |
| Workforce | Approximately 1,200 employees with expertise in finance and technology | $75.1 million in equity-based compensation (9M 2024) |
| Data Sets | Comprehensive global investment data integration | $325.3 million total revenue (9M 2024) |
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Value Propositions
Modern cloud-native solutions for investment accounting
Clearwater Analytics offers a cloud-native investment accounting platform that supports a range of financial instruments and reporting needs. As of September 30, 2024, the company reported total revenue of $115.8 million for the third quarter, reflecting a 22% increase from $94.7 million in the same period of 2023. The annualized recurring revenue reached $456.9 million, illustrating a growth rate of 26.1% from the previous year.
High accuracy and reliability of data analytics
The platform is designed to provide high accuracy in data analytics, which is essential for investment firms managing large portfolios. The gross revenue retention rate stood at 99% as of September 30, 2024, up from 98% in the same quarter of 2023. This indicates a strong customer satisfaction level and the reliability of the analytics provided. The net revenue retention rate also improved to 114% in the third quarter of 2024.
Robust compliance and risk management features
Clearwater Analytics emphasizes compliance and risk management within its offerings. The acquisition of Wilshire Technology for $40.1 million in April 2024 enhanced its capabilities in risk and performance analytics. This integration allows clients to access sophisticated tools for performance measurement and risk attribution, further solidifying Clearwater's value proposition in the market. The company reported a net income attributable to Clearwater Analytics Holdings, Inc. of $3.6 million for the third quarter of 2024, compared to a net loss of $1.9 million in the same quarter of the previous year.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $115.8 million | $94.7 million | +22% |
| Annualized Recurring Revenue | $456.9 million | $362.4 million | +26.1% |
| Gross Revenue Retention Rate | 99% | 98% | +1% |
| Net Revenue Retention Rate | 114% | 108% | +6% |
| Net Income | $3.6 million | $(1.9) million | Improvement |
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Customer Relationships
High customer retention rates (99% gross retention)
As of September 30, 2024, Clearwater Analytics reported a 99% gross revenue retention rate, which is an improvement from 98% in 2023. This high retention rate has been consistent, with the company achieving at least 98% gross revenue retention for 22 out of the last 23 quarters.
Personalized client support and onboarding services
Clearwater Analytics emphasizes personalized client support, especially during the onboarding process. The onboarding services are tailored to individual client needs, ensuring a smooth transition onto their platform. This approach has contributed to a substantial increase in annualized recurring revenue, which reached $456,941,000 by the third quarter of 2024, reflecting a 26.1% increase year-over-year.
Continuous engagement through regular updates and enhancements
Continuous engagement with clients is maintained through regular updates and enhancements to the platform. The net revenue retention rate has shown strong performance, reaching 114% in the third quarter of 2024, up from 107% in 2023. This indicates that not only are existing clients retained, but the value derived from these clients is also increasing.
| Key Metrics | 2024 (Q3) | 2023 (Q3) | Change |
|---|---|---|---|
| Gross Revenue Retention Rate | 99% | 98% | +1% |
| Net Revenue Retention Rate | 114% | 107% | +7% |
| Annualized Recurring Revenue | $456,941,000 | $362,442,000 | +26.1% |
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Channels
Direct sales to corporations, government entities, and asset managers
Clearwater Analytics engages in direct sales to a variety of clients, including corporations, government entities, and asset managers. The company's revenue for the nine months ended September 30, 2024, was $325.3 million, reflecting a 21% increase from $269.1 million during the same period in 2023. This growth was primarily driven by an expanded client base and increased assets onboarded onto their platform.
Online platform for service delivery
The company utilizes an online platform to deliver its services, which include performance and risk analytics. As of September 30, 2024, Clearwater had approximately $7.3 trillion in assets under management on its platform. The annualized recurring revenue was reported at $456.9 million for the third quarter of 2024, up from $362.4 million in the same quarter of 2023. This reflects the effectiveness of their digital service delivery model in attracting and retaining clients.
Marketing through industry events and webinars
Clearwater Analytics actively markets its services through various industry events and webinars, allowing them to reach potential clients and showcase their platform's capabilities. The company reported a gross revenue retention rate of 99% as of September 30, 2024, which is indicative of strong client satisfaction and loyalty. The marketing expenses for sales and marketing were $49.4 million for the nine months ended September 30, 2024.
| Channel Type | Details | Financial Metrics |
|---|---|---|
| Direct Sales | Targeted at corporations, government entities, asset managers | Revenue: $325.3 million (9M 2024) |
| Online Platform | Service delivery via a digital platform | AUM: $7.3 trillion; ARR: $456.9 million (Q3 2024) |
| Industry Marketing | Participation in events and hosting webinars | Marketing Expenses: $49.4 million (9M 2024) |
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Customer Segments
Corporations and government entities
Clearwater Analytics serves a diverse range of corporations and government entities that require robust financial reporting and analytics solutions. As of September 30, 2024, Clearwater's annualized recurring revenue from this segment was approximately $456.9 million, reflecting a significant increase in demand for their services.
Insurance companies and asset managers
This segment represents a core customer base for Clearwater Analytics, which provides essential tools for risk management and performance analytics. The company reported that insurance companies and asset managers collectively accounted for a substantial portion of its total revenue, contributing to a gross revenue retention rate of 99% across this customer segment as of September 30, 2024.
Alternative asset managers and pension funds
Clearwater Analytics also targets alternative asset managers and pension funds, offering customized solutions to manage complex portfolios. The company experienced a 26.1% increase in annualized recurring revenue from this segment from September 30, 2023, to September 30, 2024. This growth was driven by the onboarding of new clients and the expansion of services for existing clients.
| Customer Segment | Annualized Recurring Revenue (in millions) | Gross Revenue Retention Rate (%) | Net Revenue Retention Rate (%) |
|---|---|---|---|
| Corporations and Government Entities | $456.9 | 99 | 114 |
| Insurance Companies and Asset Managers | $402.3 | 99 | 110 |
| Alternative Asset Managers and Pension Funds | $427.2 | 99 | 110 |
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Cost Structure
Significant investment in research and development
Clearwater Analytics has consistently prioritized research and development (R&D) as part of its cost structure. For the nine months ended September 30, 2024, R&D expenses amounted to $109.7 million, reflecting a 22% increase from $90.2 million for the same period in 2023. This increase includes equity-based compensation of $26.8 million in 2024 compared to $17.4 million in 2023.
The breakdown of R&D expenses is detailed in the following table:
| Expense Category | 2024 (Q3) | 2023 (Q3) | Change ($) | Change (%) |
|---|---|---|---|---|
| Equity-based Compensation | $8.7 million | $6.8 million | $1.9 million | 28% |
| All Other R&D | $27.9 million | $25.5 million | $2.4 million | 10% |
| Total R&D | $36.6 million | $32.3 million | $4.4 million | 14% |
Operating expenses for client support and service delivery
Operating expenses are crucial for maintaining client support and ensuring effective service delivery. For the nine months ended September 30, 2024, total operating expenses were $224.9 million, compared to $209.7 million in 2023, marking a 7% increase. The distribution of these expenses is as follows:
| Expense Category | 2024 (YTD) | 2023 (YTD) | Change ($) | Change (%) |
|---|---|---|---|---|
| Sales and Marketing | $49.4 million | $44.0 million | $5.4 million | 12% |
| General and Administrative | $65.9 million | $75.4 million | ($9.6 million) | (13%) |
| Total Operating Expenses | $224.9 million | $209.7 million | $15.2 million | 7% |
Marketing and sales expenditures for client acquisition
Marketing and sales are vital for client acquisition, with expenditures in this area totaling $49.4 million for the nine months ended September 30, 2024. This reflects a 12% increase from $44.0 million in the same period of the previous year. The breakdown of these expenses is illustrated in the following table:
| Expense Category | 2024 (YTD) | 2023 (YTD) | Change ($) | Change (%) |
|---|---|---|---|---|
| Sales Commissions | $10.4 million | $11.2 million | ($0.8 million) | (7%) |
| Advertising and Promotions | $7.6 million | $6.8 million | $0.8 million | 12% |
| Other Marketing Expenses | $31.4 million | $26.0 million | $5.4 million | 21% |
| Total Marketing and Sales | $49.4 million | $44.0 million | $5.4 million | 12% |
Clearwater Analytics Holdings, Inc. (CWAN) - Business Model: Revenue Streams
Recurring revenue from subscription-based fees
The primary revenue stream for Clearwater Analytics comes from its subscription-based fees, which are calculated based on the average daily value of assets within a client’s accounts on their platform. For the three months ended September 30, 2024, Clearwater reported total revenue of $115,828,000, a 22% increase from $94,664,000 in the same period in 2023. For the nine months ended September 30, 2024, total revenue was $325,338,000, up 21% from $269,149,000 in the prior year.
As of September 30, 2024, Clearwater managed approximately $7.3 trillion in assets on its platform, compared to $6.4 trillion as of December 31, 2022. The company's annualized recurring revenue (ARR) reached $456,941,000 by the third quarter of 2024, marking a 26.1% increase year-over-year.
Incremental fees for additional services and asset management
Clearwater Analytics also generates incremental revenue through additional services and asset management fees. These fees are typically charged for extra services beyond the standard offerings included in the subscription. In the nine months ended September 30, 2024, Clearwater's gross profit was $235,912,000, with a gross margin of 73%, indicating a healthy contribution from additional services.
The company saw an increase in the average basis point rate billed to clients, which rose by 5.7% for the three months ended September 30, 2024, compared to the same quarter in 2023. This increase reflects the growing demand for Clearwater's advanced analytics services and tools that enhance client asset management capabilities.
Revenue from professional services and licensing agreements
Clearwater Analytics also earns revenue from professional services and licensing agreements, particularly through its subsidiary, JUMP, acquired in 2022. This subsidiary provides additional licensing revenue that complements Clearwater's primary offerings. In the acquisition of Wilshire Technology, Clearwater added significant analytics capabilities, enhancing its service offerings and thereby increasing potential revenue streams from professional services related to risk and performance analytics.
As of September 30, 2024, Clearwater reported a net income of $4,769,000, demonstrating the profitability of its diverse revenue streams.
| Revenue Stream | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Annualized Recurring Revenue (in thousands) | Assets Under Management (AUM) (in trillions) |
|---|---|---|---|---|
| Subscription Fees | 115,828 | 94,664 | 456,941 | 7.3 |
| Incremental Fees | N/A | N/A | N/A | N/A |
| Professional Services & Licensing | N/A | N/A | N/A | N/A |
Updated on 16 Nov 2024
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.