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Clearwater Analytics Holdings, Inc. (NYSE:CWAN): Delivering Consistent Growth and Margin Expansion
Published on September 24, 2024 | Ticker: CWAN

Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a leading provider of investment accounting and analytics solutions, serving a diverse client base that includes insurance companies, asset managers, corporations, and government entities. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s cloud-native software platform enables clients to streamline their investment operations, enhance data transparency, and make more informed decisions.

Financials

In the latest quarter, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) delivered impressive financial results, showcasing its ability to drive consistent growth while expanding profitability. For the full year 2023, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) reported annual revenue of $368,168,000 and annual net income of -$21,627,000. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s annual operating cash flow was $84,602,000, and its annual free cash flow was $78,978,000.

During the first quarter of 2024, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) reported revenue of $102,719,000, representing a 21% year-over-year increase. This strong performance was driven by Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s ability to add new clients, expand relationships with existing customers, and capitalize on the growing demand for its innovative solutions.

Key Highlights

One of the key highlights of the quarter was Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s impressive net revenue retention (NRR) rate, which reached 110%. This metric reflects Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s success in cross-selling and upselling its expanding suite of products and services to its client base. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s gross revenue retention rate also improved to an industry-leading 99%, underscoring the stickiness of its platform and the value it provides to its customers.

Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s strategic focus on international expansion is also bearing fruit. In the first quarter, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) reported that its international business, which includes Europe and Asia, grew faster than its North American operations, contributing to the overall revenue growth.

Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s profitability also continued to impress, with adjusted EBITDA margin reaching 31.3% in the first quarter, a significant improvement of 470 basis points compared to the same period in the prior year. This margin expansion was driven by Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s ability to leverage its scalable business model and the positive impact of its investments in technology, including the deployment of generative AI capabilities.

Recent Developments

Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s recent acquisitions have also strengthened its competitive position and expanded its addressable market. In 2022, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) acquired JUMP, a provider of front, middle, and back-office solutions for asset managers. More recently, in April 2024, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) completed the acquisition of the risk and performance analytics platforms of Wilshire Advisors, further enhancing its capabilities in the investment management technology space.

Outlook

Looking ahead, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) has provided guidance for the full year 2024, raising its revenue outlook to a range of $438 million to $442 million, representing a year-over-year growth of approximately 19% to 20%. Clearwater Analytics Holdings, Inc. (NYSE:CWAN) has also increased its adjusted EBITDA guidance to a range of $137 million to $139 million, implying an adjusted EBITDA margin of 31% and an uplift of approximately 260 basis points from 2023.

Conclusion

Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s strong performance and positive outlook are a testament to its ability to execute on its strategic priorities, which include continued new client acquisition, expansion of its product suite, and international growth. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)'s focus on innovation, operational excellence, and customer success has positioned Clearwater Analytics Holdings, Inc. (NYSE:CWAN) as a leader in the investment management technology space.

As Clearwater Analytics Holdings, Inc. (NYSE:CWAN) continues to capitalize on the growing demand for its solutions, investors can expect Clearwater Analytics Holdings, Inc. (NYSE:CWAN) to maintain its trajectory of consistent growth and margin expansion, solidifying its position as a premier provider of investment accounting and analytics services.

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