Q4 2023 Revenue of $99.0 million, up 20%
year-over-year
Full Year 2023 Revenue of $368.2 million, up 21% year-over-year
Q4 2023 Adjusted EBITDA margin of 30.3%; Q4
2023 Free Cash Flows of $22.5
million
Q4 2023 Gross Revenue Retention Rate of 98%;
Net Revenue Retention Rate of 107%
BOISE,
Idaho, Feb. 28, 2024 /PRNewswire/ -- Clearwater
Analytics Holdings, Inc. (NYSE: CWAN) ("Clearwater Analytics" or
the "Company"), a leading provider of SaaS-based investment
management, accounting, reporting, and analytics solutions, today
announced its financial results for the quarter ended December 31, 2023.
|
Fourth Quarter
2023
|
|
Full Year
2023
|
Revenue
|
$99.0
million
|
|
$368.2
million
|
Year-over-Year Revenue
Growth %
|
19.8 %
|
|
21.3 %
|
Annualized Recurring
Revenue (ARR)1
|
|
|
$379.1
million
|
Year-over-Year ARR
Growth %
|
|
|
17.2 %
|
Net
Loss
|
$(3.4)
million
|
|
$(23.1)
million
|
Net Loss Margin
%
|
(3.5) %
|
|
(6.3) %
|
Adjusted
EBITDA
|
$30.0
million
|
|
$105.9
million
|
Adjusted EBITDA Margin
%
|
30.3 %
|
|
28.8 %
|
|
1ARR is a
point in time metric, therefore fourth quarter 2023 and full year
2023 results are the same.
|
"We had a strong 2023, and the durability of our business was on
full display as we delivered a full year revenue growth of 21%,
while meaningfully improving both gross margin and Adjusted EBITDA.
The number of $1 million-plus clients
grew by 28% over the last year, which is a testament to the
advanced capabilities of our platform, now fully transitioned to
the public cloud. With this transition complete, we are very
excited to allocate more than 60% of R&D capacity to fueling
growth," said Sandeep Sahai, Chief
Executive Officer. "Thanks to the continuing advances in using
machine learning and artificial intelligence for operational
efficiency and the increasing network effect, the operations team
was actually smaller at the end of 2023 than it was at the
beginning of the year, demonstrating the disruptive nature of a
single instance, multi-tenant business model. We recorded our
best-ever customer satisfaction and NPS scores and more than 150
programs went live on our platform this past year. Finally, we are
thrilled to welcome three new senior executives to the Company,
bolstering our presence in Europe
and Asia. Throughout our journey,
we remain dedicated to fulfilling the long-term needs of our
clients and relentlessly pushing the boundaries of innovation
across the investment lifecycle."
Fourth Quarter 2023 Financial Results Summary
- Revenue: Total revenue for the fourth quarter of 2023
was $99.0 million, an increase of
19.8%, from $82.7 million in the
fourth quarter of 2022.
- Gross Profit: Gross profit for the fourth quarter of
2023 increased to $70.7 million,
compared with $59.7 million in the
fourth quarter of 2022. Non-GAAP gross profit for the fourth
quarter of 2023 was $76.2 million,
which equates to a 77.0% non-GAAP gross margin and an increase of
120 basis points over the fourth quarter of 2022.
- Net Income/(Loss): Net loss for the fourth quarter of
2023 was $3.4 million compared with
net loss of $2.0 million in the
fourth quarter of 2022. Net loss for the fourth quarter included
total equity-based compensation expense and related payroll taxes
of $23.7 million, which decreased
compared to the third quarter as the full year revenue growth of
JUMP products did not meet the performance vesting for threshold
RSUs related to the JUMP acquisition, resulting in a reversal of
$6.9 million of expense previously
recognized in the year. Non-GAAP net income for the fourth quarter
of 2023 increased to $24.1 million
from $17.2 million in the fourth
quarter of 2022.
- Adjusted EBITDA: Adjusted EBITDA for the fourth quarter
of 2023 was $30.0 million, up from
$24.3 million in the fourth quarter
of 2022. Adjusted EBITDA margin for the fourth quarter of 2023 was
30.3%, an increase of 80 basis points over the fourth quarter of
2022.
- Cash Flows: Operating cash flows for the fourth quarter
of 2023 were $24.1 million. Free cash
flows for the fourth quarter of 2023 increased to $22.5 million from $16.6
million in the fourth quarter of 2022. For the full year
2023, free cash flow was $79.0
million, an increase of 57.2% over the full year 2022.
- 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 $0.02
in the fourth quarter of 2023. For the full year of 2023, net loss
per basic and diluted share was $0.11. For the fourth quarter of 2023, non-GAAP
net income per basic share was $0.12,
and non-GAAP net income per diluted share was $0.10.
- Cash, cash equivalents, and investments were
$317.7 million as of December 31, 2023, compared to $255.6 million as of December 31, 2022. Total debt, net of debt
issuance cost, was $48.0 million as
of December 31, 2023.
Fourth Quarter 2023 Key Metrics Summary
- Annualized Recurring Revenue: As of December 31, 2023, annualized recurring revenue
("ARR") reached $379.1 million, an
increase of 17.2% from $323.5 million
as of December 31, 2022.
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 December 31, 2023, the gross revenue retention
rate was 98%, consistent with the Company's gross revenue retention
rate as of December 31, 2022. The
Company has reported a gross revenue retention rate of 98% for
nineteen out of the twenty prior quarters.
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 December 31, 2023, the net revenue retention rate
was 107%, compared to 106% as of December 31, 2022.
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.
- Clients: As of December 31,
2023, the Company had 1,349 clients, and 86 clients that
contributed at least $1.0 million in
ARR, an increase of 28.4% from 67 clients that contributed at least
$1.0 million in ARR as of
December 31, 2022.
- Assets Under Management (AUM): As of December 31, 2023, the platform processes and
reports on $7.3 trillion assets
daily, compared to $6.4 trillion
assets daily as of December 31,
2022.
Recent Business Highlights
- Notably, while AUM on the Clearwater platform grew to
$7.3 trillion, the Company ended 2023
at essentially the same headcount as the end of 2022.
- After completing its transition to the cloud, Clearwater
Analytics now devotes more than 60% of its R&D resources to
fostering innovation across our comprehensive suite of product
offerings. R&D is focused on:
- Investment Data Consolidation: Enhancing our products,
like Clearwater Prism and Clearwater for IBOR, to provide a full
360-degree look at investment data for analytics and reporting,
while bringing agility to investment managers and buy-side
investors so they can improve efficiencies and increase AUM.
- Asset Class and Funds Expansion: Delivery of more
comprehensive solutions such as Clearwater LPx, Clearwater MLx,
Clearwater LPx Clarity, Clearwater for Stable Value Funds and more,
to provide the deep details required for compliance and risk across
varying asset and fund classes.
- Front and Middle Office Solutions: Expansion into new
buyers across the investment lifecycle with products like
Clearwater Risk & Analytics,
Clearwater Performance & Attribution, Clearwater JUMP and
Clearwater JUMP Start.
- Platform Innovations: Applying innovations, such as
Premium Close Package and Clearwater Tri-Partite Transactions, to
our accounting and reporting platform for our existing
clientele.
- New Frontiers: Using the latest technologies, such as
Clearwater's CWIC apps and Clearwater Insights, to drive innovation
across the investment lifecycle.
- Clearwater Analytics expanded its footprint within existing
clients and added marquee clients such as AppsFlyer, Assured Life
Association, Caisse Centrale de Réassurance, Carpenters' Combined
Funds Pension, Colcom Foundation, Cross River Bank, Equinix,
Evergreen Annuity & Life Co, Federal Life Insurance Company,
Globe Life, IQUW Administration Services Limited, Metropolitan
Police Friendly Society Ltd., Millers Mutual Insurance Group,
Openly Holdings Corp, Pro-Demnity Insurance Company, Ronald
McDonald House Charities of Southern
California, Salud Integral en la Montana, United Casualty and Surety Insurance
Company, USA Underwriters, and
Vermont Community Foundation.
- Clearwater Analytics successfully drove cross-sell and upsell
motions in the fourth quarter. Highlights include:
- A growing roster of clients, including Globe Life, that use
both Clearwater's JUMP solution for OMS/PMS and Clearwater's
accounting and reconciliation solution.
- Noteworthy new Clearwater Prism clients who have chosen our
market-leading next-gen investment data management hub for enhanced
client portal and reporting.
- The Clearwater for Stable Value solution was chosen by T.
Rowe Price to support their growing
stable value business.
- Clearwater also welcomed its first clients for
Clearwater MLx, a new solution for mortgage loan detailed
accounting. The Company continued to capitalize on the market need
for detailed LP accounting with our best-ever quarterly sales of
Clearwater LPx, a full-service solution for private funds, and LPx
Clarity, an extension of Clearwater LPx that provides look-through
insight into private assets, facilitating asset allocation and risk
management decisions.
- To support the Company's global expansion efforts and go-to
market strategy, Clearwater Analytics recently announced new
leadership appointments. Shane
Akeroyd has been named as Chief Strategy Officer,
Keith Viverito as Managing Director
for EMEA, and Ann-Sophie Skjoldager Bom as Sales Director for
Strategic Asset clients.
- Clearwater Analytics published several reports in the fourth
quarter, including the 2023 Insurer Cash and Short-Term Investment
Management Market Outlook study, the 2024 Hong Kong & Singapore
Insurance Industry Outlook report, and The Digital Promise:
Operational Challenges, Approaches, and Progress for European
Insurers.
- Clearwater Analytics announced that it won the Chartis Research
RiskTech Buyside 50 Award in the Investment Lifecycle –
Insurance/Pension Funds category. The RiskTech Buyside 50 rankings
honor the top financial technology vendors in the investment
management industry. For the second consecutive year, Clearwater
Analytics received the highest score in breadth of coverage, depth
of functionality, technology and techniques, strategy and
innovation, and market presence.
First Quarter and Full Year 2024 Guidance
|
First Quarter
2024
|
|
Full Year
2024
|
Revenue
|
$100.5
million
|
|
$431 million to $437
million
|
Year-over-Year Growth
%
|
~19%
|
|
~17% to 19%
|
Adjusted
EBITDA
|
$28.8
million
|
|
$135 million to $137
million
|
Adjusted EBITDA Margin
%
|
~29%
|
|
~31%
|
Total equity-based
compensation expense and related payroll taxes
|
|
|
~$106
million
|
Depreciation and
Amortization
|
|
|
~$11 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
February 28, 2024, at 5:00 p.m. Eastern time to discuss fourth quarter
and full year 2023 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), 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, 2022 filed on
March 3, 2023, those discussed under
"Risk Factors" in the Company's Annual Report on Form 10-K for the
year ended December 31, 2023 that
will be filed following this earnings release, 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)
|
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
221,765
|
|
$
250,724
|
Short-term
investments
|
74,457
|
|
4,890
|
Accounts receivable,
net
|
92,091
|
|
72,575
|
Prepaid expenses and
other current assets
|
27,683
|
|
28,157
|
Total current
assets
|
415,996
|
|
356,346
|
Property and equipment,
net
|
15,349
|
|
15,064
|
Operating lease
right-of-use assets, net
|
22,554
|
|
24,114
|
Deferred contract
costs, non-current
|
6,439
|
|
6,563
|
Debt issuance costs -
line of credit
|
533
|
|
728
|
Other non-current
assets
|
4,907
|
|
5,880
|
Intangible assets,
net
|
26,132
|
|
29,456
|
Goodwill
|
45,338
|
|
43,791
|
Long-term
investments
|
21,495
|
|
—
|
Total assets
|
$
558,743
|
|
$
481,942
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
3,062
|
|
$
3,092
|
Accrued expenses and
other current liabilities
|
49,535
|
|
42,119
|
Notes payable, current
portion
|
2,750
|
|
2,750
|
Operating lease
liability, current portion
|
6,551
|
|
5,851
|
Tax receivable
agreement liability
|
18,894
|
|
12,200
|
Total current
liabilities
|
80,792
|
|
66,012
|
Notes payable, less
current maturities and unamortized debt issuance costs
|
45,828
|
|
48,492
|
Operating lease
liability, less current portion
|
16,948
|
|
19,505
|
Other long-term
liabilities
|
5,518
|
|
9,547
|
Total
liabilities
|
149,086
|
|
143,556
|
Stockholders'
Equity
|
|
|
|
Class A common stock,
par value $0.001 per share; 1,500,000,000 shares authorized,
127,604,185 shares issued and outstanding as of December 31, 2023,
61,148,890 shares issued
and outstanding as of December 31, 2022
|
128
|
|
61
|
Class B common stock,
par value $0.001 per share; 500,000,000 shares authorized,
111,191
shares issued and outstanding as of December 31, 2023, 1,439,251
shares issued
and outstanding as of December 31, 2022
|
—
|
|
1
|
Class C common stock,
par value $0.001 per share; 500,000,000 shares authorized,
32,684,156
shares issued and outstanding as of December 31, 2023, 47,377,587
shares issued and
outstanding as of December 31, 2022
|
33
|
|
47
|
Class D common stock,
par value $0.001 per share; 500,000,000 shares authorized,
82,955,977
shares issued and outstanding as of December 31, 2023, 130,083,755
shares issued and
outstanding as of December 31, 2022
|
83
|
|
130
|
Additional
paid-in-capital
|
532,507
|
|
455,320
|
Accumulated other
comprehensive income
|
2,909
|
|
609
|
Accumulated
deficit
|
(181,331)
|
|
(186,647)
|
Total stockholders'
equity attributable to Clearwater Analytics Holdings,
Inc.
|
354,329
|
|
269,521
|
Non-controlling
interests
|
55,328
|
|
68,865
|
Total stockholders'
equity
|
409,657
|
|
338,386
|
Total liabilities and
stockholders' equity
|
$
558,743
|
|
$
481,942
|
Clearwater Analytics
Holdings, Inc.
Consolidated
Statements of Operations
(In thousands,
except share amounts and per share amounts,
unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
99,019
|
|
$
82,687
|
|
$
368,168
|
|
$
303,426
|
Cost of
revenue(1)
|
28,335
|
|
22,973
|
|
107,127
|
|
87,784
|
Gross profit
|
70,684
|
|
59,714
|
|
261,041
|
|
215,642
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development(1)
|
33,728
|
|
24,553
|
|
123,925
|
|
94,120
|
Sales and
marketing(1)
|
16,316
|
|
14,383
|
|
60,365
|
|
52,638
|
General and
administrative(1)
|
18,050
|
|
16,903
|
|
93,496
|
|
63,767
|
Total operating
expenses
|
68,094
|
|
55,839
|
|
277,786
|
|
210,525
|
Income (loss) from
operations
|
2,590
|
|
3,875
|
|
(16,745)
|
|
5,117
|
Interest income,
net
|
(1,979)
|
|
(1,276)
|
|
(6,401)
|
|
(1,137)
|
Tax receivable
agreement expense
|
8,284
|
|
5,939
|
|
14,396
|
|
11,639
|
Other (income)
expense, net
|
(669)
|
|
778
|
|
(1,874)
|
|
(50)
|
Loss before income
taxes
|
(3,046)
|
|
(1,566)
|
|
(22,866)
|
|
(5,335)
|
Provision for income
taxes
|
401
|
|
401
|
|
217
|
|
1,360
|
Net
loss
|
(3,447)
|
|
(1,967)
|
|
(23,083)
|
|
(6,695)
|
Less: Net income (loss)
attributable to non-controlling interests
|
739
|
|
941
|
|
(1,456)
|
|
1,272
|
Net loss
attributable to Clearwater Analytics Holdings, Inc.
|
$
(4,186)
|
|
$
(2,908)
|
|
$
(21,627)
|
|
$
(7,967)
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to Class A and Class D common stock:
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(0.02)
|
|
$
(0.02)
|
|
$
(0.11)
|
|
$
(0.04)
|
|
|
|
|
|
|
|
|
Weighted average shares
of Class A and Class D common stock
outstanding:
|
|
|
|
|
|
|
|
Basic and
diluted
|
206,193,802
|
|
190,015,070
|
|
199,691,873
|
|
185,560,683
|
|
|
(1) Amounts
include equity-based compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
$
3,378
|
|
$
1,761
|
|
$
12,215
|
|
$
9,043
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
7,346
|
|
3,947
|
|
24,739
|
|
17,950
|
Sales and
marketing
|
4,622
|
|
3,259
|
|
15,843
|
|
12,711
|
General and
administrative
|
6,975
|
|
7,955
|
|
51,650
|
|
25,987
|
Total equity-based
compensation expense
|
$
22,321
|
|
$
16,922
|
|
$
104,447
|
|
$
65,691
|
Clearwater Analytics
Holdings, Inc.
Consolidated
Statements of Cash Flows
(In thousands,
unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net loss
|
$
(3,447)
|
|
$
(1,967)
|
|
$
(23,083)
|
|
$
(6,695)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,593
|
|
1,640
|
|
9,929
|
|
5,139
|
Noncash operating
lease cost
|
1,952
|
|
1,600
|
|
7,619
|
|
5,950
|
Equity-based
compensation
|
22,321
|
|
16,922
|
|
104,447
|
|
65,691
|
Amortization of
deferred contract acquisition costs
|
1,200
|
|
1,106
|
|
4,763
|
|
4,327
|
Amortization of debt
issuance costs, included in interest expense
|
71
|
|
70
|
|
280
|
|
279
|
Accretion of discount
on investments
|
(573)
|
|
—
|
|
(1,474)
|
|
—
|
Deferred tax
benefit
|
(913)
|
|
(214)
|
|
(1,665)
|
|
(803)
|
Realized gain on
investments
|
—
|
|
—
|
|
(89)
|
|
—
|
Changes in operating
assets and liabilities, excluding the impact of business
acquisitions:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
(434)
|
|
(4,444)
|
|
(19,298)
|
|
(19,098)
|
Prepaid expenses and
other assets
|
(3,068)
|
|
(6,659)
|
|
1,151
|
|
(4,956)
|
Deferred contract
acquisition costs
|
(2,405)
|
|
(2,253)
|
|
(5,067)
|
|
(5,845)
|
Accounts
payable
|
(224)
|
|
1,369
|
|
(115)
|
|
1,609
|
Accrued expenses and
other liabilities
|
7,081
|
|
4,845
|
|
1,204
|
|
207
|
Tax receivable
agreement liability
|
(61)
|
|
6,500
|
|
6,000
|
|
12,200
|
Net cash provided by
operating activities
|
24,093
|
|
18,515
|
|
84,602
|
|
58,005
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
(1,562)
|
|
(1,877)
|
|
(5,624)
|
|
(7,758)
|
Purchase of held to
maturity investments
|
—
|
|
—
|
|
(3,004)
|
|
(3,000)
|
Purchases of
available-for-sale investments
|
(13,160)
|
|
—
|
|
(124,178)
|
|
—
|
Proceeds from sale of
available-for-sale investments
|
—
|
|
—
|
|
5,950
|
|
—
|
Proceeds from
maturities of investments
|
15,280
|
|
—
|
|
31,801
|
|
—
|
Acquisition of
business, net of cash acquired
|
—
|
|
(65,793)
|
|
—
|
|
(65,793)
|
Net cash provided by
(used in) investing activities
|
558
|
|
(67,670)
|
|
(95,055)
|
|
(76,551)
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from exercise
of options
|
274
|
|
10,358
|
|
4,738
|
|
18,284
|
Taxes paid related to
net share settlement of equity awards
|
(5,895)
|
|
(624)
|
|
(20,784)
|
|
(3,189)
|
Proceeds from employee
stock purchase plan
|
1,994
|
|
1,814
|
|
4,588
|
|
4,215
|
Repayments of
borrowings
|
(688)
|
|
(688)
|
|
(2,749)
|
|
(2,750)
|
Payment of costs
associated with the IPO
|
—
|
|
—
|
|
—
|
|
(214)
|
Payment of tax
distributions
|
(2,149)
|
|
(117)
|
|
(2,184)
|
|
(117)
|
Payment of business
acquisition holdback liability
|
(2,900)
|
|
—
|
|
(2,900)
|
|
—
|
Net cash provided by
(used in) financing activities
|
(9,364)
|
|
10,743
|
|
(19,291)
|
|
16,229
|
Effect of exchange rate
changes on cash and cash equivalents
|
813
|
|
613
|
|
785
|
|
(1,556)
|
Change in cash and cash
equivalents during the period
|
16,100
|
|
(37,799)
|
|
(28,959)
|
|
(3,873)
|
Cash and cash
equivalents, beginning of period
|
205,665
|
|
288,523
|
|
250,724
|
|
254,597
|
Cash and cash
equivalents, end of period
|
$
221,765
|
|
$
250,724
|
|
$
221,765
|
|
$
250,724
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
Cash paid for
interest
|
$
924
|
|
$
629
|
|
$
3,454
|
|
$
1,395
|
Cash paid for income
taxes
|
$
395
|
|
$
619
|
|
$
2,432
|
|
$
2,044
|
NON-CASH INVESTING
AND FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Purchase of property
and equipment included in accounts payable and
accrued expense
|
$
435
|
|
$
350
|
|
$
435
|
|
$
350
|
Business acquisition
holdback liability included in accrued expense and
other long-term liabilities
|
$
—
|
|
$
6,999
|
|
$
—
|
|
$
6,999
|
Tax distributions
payable to Continuing Equity Owners included in accrued
expenses
|
$
2,945
|
|
$
3,196
|
|
$
2,945
|
|
$
3,196
|
Clearwater Analytics
Holdings, Inc.
Reconciliation of
Net Loss to Adjusted EBITDA
(In thousands,
unaudited)
|
|
|
Three Months Ended
December 31,
|
|
2023
|
|
2022
|
|
(in thousands,
except percentages)
|
Net loss
|
$
(3,447)
|
|
(3 %)
|
|
$
(1,967)
|
|
(2 %)
|
Adjustments:
|
|
|
|
|
|
|
|
Interest income,
net
|
(1,979)
|
|
(2 %)
|
|
(1,276)
|
|
(2 %)
|
Depreciation and
amortization
|
2,593
|
|
3 %
|
|
1,640
|
|
2 %
|
Equity-based
compensation expense and related payroll taxes
|
27,071
|
|
27 %
|
|
15,935
|
|
19 %
|
Equity-based
compensation (benefit) expense related to JUMP
acquisition
|
(3,411)
|
|
(3 %)
|
|
1,821
|
|
2 %
|
Tax receivable
agreement expense
|
8,284
|
|
8 %
|
|
5,939
|
|
7 %
|
Transaction
expenses
|
441
|
|
0 %
|
|
384
|
|
0 %
|
Other
expenses(1)
|
430
|
|
0 %
|
|
1,873
|
|
2 %
|
Adjusted
EBITDA
|
29,982
|
|
30 %
|
|
24,349
|
|
29 %
|
Revenue
|
$
99,019
|
|
100 %
|
|
$
82,687
|
|
100 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
(in thousands,
except percentages)
|
Net loss
|
$
(23,083)
|
|
(6 %)
|
|
$
(6,695)
|
|
(2 %)
|
Adjustments:
|
|
|
|
|
|
|
|
Interest income,
net
|
(6,401)
|
|
(2 %)
|
|
(1,137)
|
|
0 %
|
Depreciation and
amortization
|
9,929
|
|
3 %
|
|
5,139
|
|
2 %
|
Equity-based
compensation expense and related payroll taxes
|
94,906
|
|
26 %
|
|
64,704
|
|
21 %
|
Equity-based
compensation expense related to JUMP acquisition
|
13,172
|
|
4 %
|
|
1,821
|
|
1 %
|
Tax receivable
agreement expense
|
14,396
|
|
4 %
|
|
11,639
|
|
4 %
|
Transaction
expenses
|
2,052
|
|
1 %
|
|
1,711
|
|
1 %
|
Other
expenses(1)
|
934
|
|
0 %
|
|
3,954
|
|
1 %
|
Adjusted
EBITDA
|
105,905
|
|
29 %
|
|
81,136
|
|
27 %
|
Revenue
|
$
368,168
|
|
100 %
|
|
$
303,426
|
|
100 %
|
|
|
(1)
|
Other expenses include
management fees to our investors, provision for income taxes,
foreign exchange gains and losses and other expenses
that are not reflective of our core operating performance,
including the costs to set up our Up-C structure and Tax
Receivable Agreement.
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
thousands)
|
Up-C structure
expenses
|
$
—
|
|
$
—
|
|
$
—
|
|
$
158
|
Amortization of prepaid
management fees and reimbursable expenses
|
698
|
|
694
|
|
2,592
|
|
2,486
|
Provision for income
taxes
|
401
|
|
401
|
|
217
|
|
1,360
|
Other (income) expense,
net
|
(669)
|
|
778
|
|
(1,874)
|
|
(50)
|
Total other
expenses
|
$
430
|
|
$
1,873
|
|
$
934
|
|
$
3,954
|
Clearwater Analytics
Holdings, Inc.
Reconciliation of
Free Cash Flow
(In thousands,
unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
$
24,093
|
|
$
18,515
|
|
$
84,602
|
|
$
58,005
|
Less: Purchases of
property and equipment
|
1,562
|
|
1,877
|
|
5,624
|
|
7,758
|
Free Cash
Flow
|
$
22,531
|
|
$
16,638
|
|
$
78,978
|
|
$
50,247
|
Clearwater Analytics
Holdings, Inc.
Reconciliation of
Non-GAAP Information
(In thousands,
except share amounts and per share amounts,
unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
99,019
|
|
$
82,687
|
|
$ 368,168
|
|
$ 303,426
|
|
|
|
|
|
|
|
|
Gross profit
|
$
70,684
|
|
$
59,714
|
|
$ 261,041
|
|
$ 215,642
|
Adjustments:
|
|
|
|
|
|
|
|
Equity-based
compensation expense and related payroll taxes
|
3,411
|
|
1,801
|
|
12,734
|
|
9,083
|
Depreciation and
amortization
|
2,102
|
|
1,093
|
|
7,999
|
|
3,290
|
Gross profit,
non-GAAP
|
$
76,197
|
|
$
62,608
|
|
$ 281,774
|
|
$ 228,015
|
As a percentage of
revenue, non-GAAP
|
77 %
|
|
76 %
|
|
77 %
|
|
75 %
|
|
|
|
|
|
|
|
|
Cost of
Revenue
|
$
28,335
|
|
$
22,973
|
|
$ 107,127
|
|
$
87,784
|
Adjustments:
|
|
|
|
|
|
|
|
Equity-based
compensation expense and related payroll taxes
|
3,411
|
|
1,801
|
|
12,734
|
|
9,083
|
Depreciation and
amortization
|
2,102
|
|
1,093
|
|
7,999
|
|
3,290
|
Cost of revenue,
non-GAAP
|
$
22,822
|
|
$
20,079
|
|
$
86,394
|
|
$
75,411
|
As a percentage of
revenue, non-GAAP
|
23 %
|
|
24 %
|
|
23 %
|
|
25 %
|
|
|
|
|
|
|
|
|
Research and
development
|
$
33,728
|
|
$
24,553
|
|
$ 123,925
|
|
$
94,120
|
Adjustments:
|
|
|
|
|
|
|
|
Equity-based
compensation expense and related payroll taxes
|
7,035
|
|
4,013
|
|
24,221
|
|
18,016
|
Equity-based
compensation expense related to JUMP acquisition
|
359
|
|
—
|
|
1,406
|
|
—
|
Depreciation and
amortization
|
258
|
|
416
|
|
1,044
|
|
1,293
|
Research and
development, non-GAAP
|
$
26,076
|
|
$
20,124
|
|
$
97,254
|
|
$
74,811
|
As a percentage of
revenue, non-GAAP
|
26 %
|
|
24 %
|
|
26 %
|
|
25 %
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
$
16,316
|
|
$
14,383
|
|
$
60,365
|
|
$
52,638
|
Adjustments:
|
|
|
|
|
|
|
|
Equity-based
compensation expense and related payroll taxes
|
4,636
|
|
3,937
|
|
16,419
|
|
13,389
|
Depreciation and
amortization
|
148
|
|
87
|
|
589
|
|
286
|
Sales and marketing,
non-GAAP
|
$
11,532
|
|
$
10,359
|
|
$
43,357
|
|
$
38,963
|
As a percentage of
revenue, non-GAAP
|
12 %
|
|
13 %
|
|
12 %
|
|
13 %
|
|
|
|
|
|
|
|
|
General and
administrative
|
$
18,050
|
|
$
16,903
|
|
$
93,496
|
|
$
63,767
|
Adjustments:
|
|
|
|
|
|
|
|
Equity-based
compensation expense and related payroll taxes
|
11,989
|
|
6,184
|
|
41,532
|
|
24,216
|
Equity-based
compensation (benefit) expense related to JUMP
acquisition
|
(3,770)
|
|
1,821
|
|
11,766
|
|
1,821
|
Depreciation and
amortization
|
85
|
|
44
|
|
297
|
|
270
|
Amortization of
prepaid management fees and reimbursable expenses
|
698
|
|
694
|
|
2,592
|
|
2,486
|
Transaction
expenses
|
441
|
|
384
|
|
2,052
|
|
1,711
|
Up-C structure
expenses
|
—
|
|
—
|
|
—
|
|
158
|
General and
administrative, non-GAAP
|
$
8,607
|
|
$
7,776
|
|
$
35,258
|
|
$
33,105
|
As a percentage of
revenue, non-GAAP
|
9 %
|
|
9 %
|
|
10 %
|
|
11 %
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$
2,590
|
|
$
3,875
|
|
$ (16,745)
|
|
$
5,117
|
Adjustments:
|
|
|
|
|
|
|
|
Equity-based
compensation expense and related payroll taxes
|
27,071
|
|
15,935
|
|
94,906
|
|
64,704
|
Equity-based
compensation (benefit) expense related to JUMP
acquisition
|
(3,411)
|
|
1,821
|
|
13,172
|
|
1,821
|
Depreciation and
amortization
|
2,593
|
|
1,640
|
|
9,929
|
|
5,139
|
Amortization of
prepaid management fees and reimbursable expenses
|
698
|
|
694
|
|
2,592
|
|
2,486
|
Transaction
expenses
|
441
|
|
384
|
|
2,052
|
|
1,711
|
Up-C structure
expenses
|
—
|
|
—
|
|
—
|
|
158
|
Income from operations,
non-GAAP
|
$
29,982
|
|
$
24,349
|
|
$ 105,905
|
|
$
81,136
|
As a percentage of
revenue, non-GAAP
|
30 %
|
|
29 %
|
|
29 %
|
|
27 %
|
|
|
|
|
|
|
|
|
Net loss
|
$
(3,447)
|
|
$
(1,967)
|
|
$ (23,083)
|
|
$
(6,695)
|
Adjustments:
|
|
|
|
|
|
|
|
Equity-based
compensation expense and related payroll taxes
|
27,071
|
|
15,935
|
|
94,906
|
|
64,704
|
Equity-based
compensation (benefit) expense related to JUMP
acquisition
|
(3,411)
|
|
1,821
|
|
13,172
|
|
1,821
|
Depreciation and
amortization
|
2,593
|
|
1,639
|
|
9,929
|
|
5,139
|
Tax receivable
agreement expense
|
8,284
|
|
5,939
|
|
14,396
|
|
11,639
|
Amortization of
prepaid management fees and reimbursable expenses
|
698
|
|
694
|
|
2,592
|
|
2,486
|
Transaction
expenses
|
441
|
|
384
|
|
2,052
|
|
1,711
|
Up-C structure
expenses
|
—
|
|
—
|
|
—
|
|
158
|
Tax impacts of
adjustments to net loss(1)
|
(8,158)
|
|
(7,205)
|
|
(28,545)
|
|
(23,874)
|
Net income,
non-GAAP
|
$
24,071
|
|
$
17,240
|
|
$
85,419
|
|
$
57,089
|
As a percentage of
revenue, non-GAAP
|
24 %
|
|
21 %
|
|
23 %
|
|
19 %
|
|
|
|
|
|
|
|
|
Net income per share -
basic, non-GAAP
|
$
0.12
|
|
$
0.09
|
|
$
0.43
|
|
$
0.31
|
Net income per share -
diluted, non-GAAP
|
$
0.10
|
|
$
0.07
|
|
$
0.33
|
|
$
0.23
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding - basic
|
206,193,802
|
|
190,015,070
|
|
199,691,873
|
|
185,560,683
|
Weighted-average common
shares outstanding - diluted
|
252,215,606
|
|
252,020,192
|
|
255,750,590
|
|
249,664,138
|
|
|
(1)
|
The non-GAAP effective
tax rate was 25% and 29% for the three months and year ended
December 31, 2023 and 2022, 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.
|
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SOURCE Clearwater Analytics Holdings, Inc.