Record Quarterly Revenue of $94.7 Million, Up 24% Year-Over-Year
Adjusted EBITDA of $28.6 Million, Up 51% Year-Over-Year
Adjusted EBITDA margin of 30%
BOISE, Idaho, Nov. 1, 2023 /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 September 30, 2023.
“Our Q3 financial performance speaks for itself and is a direct result of Clearwater’s tireless commitment to disciplined execution and client success. By focusing on our clients, we achieved strong financial results and even greater client outcomes. Examples of that client-first mindset include streamlining the client onboarding process from an average time of nine to five months, uniting more than 500 industry leaders and experts at our annual user conference for expert training and advice, and innovating our product offerings to further capture competitive wins while improving our cross-sell and upsell sales motions,” said Sandeep Sahai, Chief Executive Officer. “As an organization, our primary goal lies in championing clients’ success by enabling decision makers to unlock significant gains in business productivity and explore new avenues for growth.”
Third Quarter 2023 Financial Results Summary
Revenue: Total revenue for the third quarter of 2023 was $94.7 million, an increase of 23.7%, from $76.6 million in the third quarter of 2022.
Gross Profit: Gross profit for the third quarter of 2023 increased to $67.7 million, compared with $53.8 million in the third quarter of 2022. Non-GAAP gross profit for the third quarter of 2023 was $73.2 million, which equates to a 77.4% non-GAAP gross margin, an increase of 250 basis points over the third quarter of 2022.
Net Income/(Loss): Net loss for the third quarter of 2023 was $2.3 million compared with net loss of $3.0 million in the third quarter of 2022. Net loss for the third quarter included total equity-based compensation expense and related payroll taxes of $31.2 million, including $5.6 million related to the JUMP Technology acquisition, which closed in the fourth quarter of 2022. Non-GAAP net income for the third quarter of 2023 increased to $23.7 million from $13.8 million in the third quarter of 2022.
Adjusted EBITDA: Adjusted EBITDA for the third quarter of 2023 was $28.6 million, up from $18.8 million in the third quarter of 2022. Adjusted EBITDA margin for the third quarter of 2023 was 30.2%.
Cash Flows: Operating cash flows for the third quarter of 2023 were $31.7 million. Free cash flows for the third quarter of 2023 increased to $30.9 million from $12.8 million in the third quarter of 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 $0.01 in the third quarter of 2023. Non-GAAP net income per basic share was $0.12, and non-GAAP net income per diluted share was $0.09 in the third quarter of 2023.
Cash, cash equivalents, and investments were $302.8 million as of September 30, 2023. Total debt, net of debt issuance cost, was $48.7 million as of September 30, 2023.
Third Quarter 2023 Key Metrics Summary
Annualized Recurring Revenue: As of September 30, 2023, annualized recurring revenue (“ARR”) reached $362.4 million, an increase of 19.4% from $303.6 million as of September 30, 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 September 30, 2023, the gross revenue retention rate was 98%, consistent with the Company’s gross revenue retention rate as of September 30, 2022. The Company has reported a gross revenue retention rate of 98% for eighteen out of the nineteen 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 September 30, 2023, the net revenue retention rate was 108%, compared to 109% as of June 30, 2023, and 103% as of September 30, 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.
Recent Business Highlights
Clearwater Analytics hosted its annual Clearwater Connect conference bringing more than 500 global in-person attendees together in Boise, Idaho. At the event, attendees learned about new product innovations, including the latest advancements with generative AI and how it is expected to enable significant productivity gains, cost reductions, and operational improvements that modernize the client experience. Clearwater attendees significantly enhanced their knowledge of the world’s most comprehensive investment accounting solution by attending sessions and seeing demonstrations on:
Clearwater LPx, a full-service solution that solves many of the operational challenges associated with accounting and reporting on private funds. Attendees saw product enhancements up close on Clearwater LPx Clarity, J-Curve, Clearwater’s LPx’s Management Console and more.
Clearwater MLx, an all-in-one experience for mortgage loan investors to make informed decisions at any stage of the loan lifecycle, from origination and deal management to analytics, accounting, and reporting.
The many innovations to the Clearwater Platform in areas of focus such as Income Forecasting, ESG Data & Reporting, Self-Service, LIBOR to SOFR Transition, and more.
Clearwater Prism expanded capabilities, including a web-based editor for client users and expanded abilities to support attribution and ESG reporting as well as EU languages and regional formats.
Clearwater JUMP’s OMS and PMS capabilities and how this advanced offering delivers a unified, trusted full investment lifecycle platform to the marketplace.
Clearwater announced the winners of its Client Awards, highlighting individuals, teams, and firms that have achieved growth, operational excellence, transformations and more with Clearwater’s award-winning investment accounting platform. Company winners included Blackstone, Global Atlantic Financial Group, J.P. Morgan, Prosperity Life Group, Resolution Life US, and Transamerica. This year’s client award winners included individuals from Arch Capital Group, Asset Allocation & Management Company, Cove Street Capital, Deseret Mutual Benefit Administrators, and Nationwide.
Clearwater Analytics announced that Ofi Invest Asset Management, part of Ofi Invest Group and France’s fifth-largest asset management group with more than €187 billion under management, selected Clearwater’s platform to power its investment accounting management, reporting, and services. In the third quarter, the Company expanded its footprint within existing clients and added marquee clients such as Alpha Warranty, Atrium Group Services Limited, Chilton Investment Services, Crossmark Global Investments Inc., Highview National Insurance Company, Kera Capital Partners, Methodist Health System, NorthStandard Limited, Optima Seguros, Perion Network Ltd, Point Biopharma Inc., and Westfield Specialty, Ltd.
Clearwater Analytics announced that RiverStone International, a leading global nonlife run-off insurance business specialist and the largest provider of legacy solutions in the Lloyd’s market, successfully implemented the Clearwater platform. Selected for its investment accounting and reporting capabilities, the Clearwater platform today automates and streamlines RiverStone’s data consolidation, investment accounting, trade reconciliation, and reporting processes. In addition, Clearwater Analytics announced that Bank of Saint Lucia chose Clearwater JUMP to power its new mutual fund. By implementing Clearwater’s solution for the investment lifecycle, which includes reconciliation and data aggregation capabilities, investment accounting, and NAV & CRM tool, Bank of Saint Lucia has a comprehensive solution that fits their needs. With Clearwater JUMP, Bank of Saint Lucia will have an asset management operations platform, empowering them to scale rapidly. The bank aims to grow significantly in size within the next year, positioning itself as a leading financial institution in the Eastern Caribbean.
Clearwater won the Captive Review US Award for the second year in a row, clinching top honors in the Software Solution of the Year category. In addition, Clearwater Analytics was named to the IDC FinTech Rankings 2023 in the Top 50 and the Emerging FinTech lists.
Fourth Quarter and Full Year 2023 Guidance
|
Fourth Quarter 2023 |
Full Year 2023 |
||
|
Revenue |
$98.5 million |
$367.6 million |
|
|
Year-over-Year Growth % |
~19% |
~21% |
|
|
Adjusted EBITDA |
$28 million |
$104 million |
|
|
Adjusted EBITDA Margin % |
~28% |
~28% |
|
|
Equity-based compensation expense and related payroll taxes |
~$80 million |
||
|
Equity-based compensation expense related to JUMP Technology acquisition |
~$25 million |
||
|
Depreciation and Amortization |
~$9 million |
||
|
Non-GAAP effective tax rate |
25 % |
||
|
Diluted non-GAAP share count |
~255 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 November 1, 2023, at 5:00 p.m. Eastern time to discuss third quarter 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 $6.4 trillion in assets spanning traditional and alternative asset types. Additional information about Clearwater can be found at clearwater-analytics.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, risk factors related to the Company’s acquisition of JUMP Technology, including the Company’s ability to (i) successfully integrate the operations and technology of JUMP Technology with those of the Company, (ii) retain and incentivize the management of JUMP Technology, and (iii) retain the clients of JUMP Technology, 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, 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) |
|||
|
September 30 |
December 31 |
||
|
2023 |
2022 |
||
|
Assets |
|||
|
Current assets: |
|||
|
Cash and cash equivalents |
$ 205,665 |
$ 250,724 |
|
|
Short-term investments |
79,568 |
4,890 |
|
|
Accounts receivable, net |
91,656 |
72,575 |
|
|
Prepaid expenses and other current assets |
24,341 |
28,157 |
|
|
Total current assets |
401,230 |
356,346 |
|
|
Property and equipment, net |
14,804 |
15,064 |
|
|
Operating lease right-of-use assets, net |
22,940 |
24,114 |
|
|
Intangible assets, net |
26,037 |
29,456 |
|
|
Goodwill |
42,585 |
43,791 |
|
|
Long-term investments |
17,600 |
— |
|
|
Deferred contract costs, non-current |
5,636 |
6,563 |
|
|
Other non-current assets |
4,675 |
6,608 |
|
|
Total assets |
$ 535,507 |
$ 481,942 |
|
|
Liabilities and Stockholders’ Equity |
|||
|
Current liabilities: |
|||
|
Accounts payable |
$ 2,853 |
$ 3,092 |
|
|
Accrued expenses and other current liabilities |
40,779 |
42,119 |
|
|
Notes payable, current portion |
2,750 |
2,750 |
|
|
Operating lease liability, current portion |
6,402 |
5,851 |
|
|
Tax receivable agreement liability, current portion |
10,355 |
12,200 |
|
|
Total current liabilities |
63,139 |
66,012 |
|
|
Notes payable, less current maturities and unamortized debt issuance costs |
46,494 |
48,492 |
|
|
Operating lease liability, less current portion |
17,678 |
19,505 |
|
|
Tax receivable agreement liability, less current portion |
8,200 |
— |
|
|
Other long-term liabilities |
8,561 |
9,547 |
|
|
Total liabilities |
144,072 |
143,556 |
|
|
Stockholders’ Equity |
|||
|
Class A common stock, par value $0.001 per share; 1,500,000,000 shares authorized, |
89 |
61 |
|
|
Class B common stock, par value $0.001 per share; 500,000,000 shares authorized, 1,402,185 |
1 |
1 |
|
|
Class C common stock, par value $0.001 per share; 500,000,000 shares authorized, 39,337,746 |
39 |
47 |
|
|
Class D common stock, par value $0.001 per share; 500,000,000 shares authorized, 113,173,596 |
113 |
130 |
|
|
Additional paid-in-capital |
516,485 |
455,320 |
|
|
Accumulated other comprehensive income (loss) |
(500) |
609 |
|
|
Accumulated deficit |
(190,599) |
(186,647) |
|
|
Total stockholders’ equity attributable to Clearwater Analytics Holdings, Inc. |
325,628 |
269,521 |
|
|
Non-controlling interests |
65,807 |
68,865 |
|
|
Total stockholders’ equity |
391,435 |
338,386 |
|
|
Total liabilities and stockholders’ equity |
$ 535,507 |
$ 481,942 |
|
|
Clearwater Analytics Holdings, Inc. Consolidated Statements of Operations (In thousands, except share amounts and per share amounts, unaudited) |
|||||||
|
Three Months Ended |
Nine Months Ended |
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
|
Revenue |
$ 94,664 |
$ 76,552 |
$ 269,149 |
$ 220,739 |
|||
|
Cost of revenue(1) |
27,013 |
22,720 |
78,792 |
64,811 |
|||
|
Gross profit |
67,651 |
53,832 |
190,357 |
155,928 |
|||
|
Operating expenses: |
|||||||
|
Research and development(1) |
32,250 |
25,438 |
90,198 |
69,568 |
|||
|
Sales and marketing(1) |
15,020 |
13,187 |
44,049 |
38,254 |
|||
|
General and administrative(1) |
26,268 |
16,371 |
75,445 |
46,864 |
|||
|
Total operating expenses |
73,538 |
54,996 |
209,692 |
154,686 |
|||
|
Income (loss) from operations |
(5,887) |
(1,164) |
(19,335) |
1,242 |
|||
|
Interest (income) expense, net |
(1,733) |
(693) |
(4,422) |
139 |
|||
|
Tax receivable agreement (benefit) expense |
(566) |
2,600 |
6,112 |
5,700 |
|||
|
Other income, net |
(971) |
(469) |
(1,205) |
(828) |
|||
|
Loss before income taxes |
(2,617) |
(2,602) |
(19,820) |
(3,769) |
|||
|
Provision for (benefit from) income taxes |
(274) |
424 |
(184) |
959 |
|||
|
Net loss |
(2,343) |
(3,026) |
(19,636) |
(4,728) |
|||
|
Less: Net income (loss) attributable to non-controlling interests |
(472) |
(52) |
(2,440) |
277 |
|||
|
Net loss attributable to Clearwater Analytics Holdings, Inc. |
$ (1,871) |
$ (2,974) |
$ (17,196) |
$ (5,005) |
|||
|
Net loss per share attributable to Class A and Class D common stockholders stock: |
|||||||
|
Basic and diluted |
$ (0.01) |
$ (0.02) |
$ (0.09) |
$ (0.03) |
|||
|
Weighted average shares of Class A and Class D common stock outstanding: |
|||||||
|
Basic and diluted |
201,582,951 |
187,824,531 |
197,903,361 |
184,026,378 |
|||
|
(1) Amounts include equity-based compensation as follows: |
|||||||
|
Cost of revenue |
$ 3,346 |
$ 2,594 |
$ 8,837 |
$ 7,281 |
|||
|
Operating expenses: |
|||||||
|
Research and development |
6,768 |
5,133 |
17,393 |
14,003 |
|||
|
Sales and marketing |
4,010 |
2,941 |
11,221 |
9,452 |
|||
|
General and administrative |
16,233 |
6,033 |
44,675 |
18,032 |
|||
|
Total equity-based compensation expense |
$ 30,357 |
$ 16,701 |
$ 82,126 |
48,768 |
|||
|
Clearwater Analytics Holdings, Inc. Consolidated Statements of Cash Flows (In thousands, unaudited) |
|||||||
|
Three Months Ended September 30, 2023 |
Nine Months Ended September 30, |
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
|
OPERATING ACTIVITIES |
|||||||
|
Net loss |
$ (2,343) |
$ (3,026) |
$ (19,636) |
$ (4,728) |
|||
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||||||
|
Depreciation and amortization |
2,476 |
1,381 |
7,336 |
3,499 |
|||
|
Noncash operating lease cost |
1,898 |
1,891 |
5,667 |
5,226 |
|||
|
Equity-based compensation |
30,357 |
16,701 |
82,126 |
48,768 |
|||
|
Change in tax receivable liability |
(566) |
2,600 |
6,122 |
5,700 |
|||
|
Amortization of deferred contract acquisition costs |
1,212 |
1,154 |
3,563 |
3,221 |
|||
|
Amortization of debt issuance costs, included in interest expense |
71 |
71 |
210 |
210 |
|||
|
Deferred tax benefit |
(314) |
(106) |
(524) |
(590) |
|||
|
Accretion of discount on investments |
(502) |
— |
(901) |
— |
|||
|
Realized gain on investments |
— |
— |
(89) |
— |
|||
|
Changes in operating assets and liabilities: |
|||||||
|
Accounts receivable, net |
(8,966) |
(9,648) |
(18,864) |
(15,051) |
|||
|
Prepaid expenses and other assets |
4,759 |
1,563 |
4,219 |
1,618 |
|||
|
Deferred contract acquisition costs |
(1,376) |
(1,478) |
(2,662) |
(3,593) |
|||
|
Accounts payable |
9 |
661 |
109 |
240 |
|||
|
Accrued expenses and other liabilities |
4,983 |
2,916 |
(6,171) |
(4,673) |
|||
|
Net cash provided by operating activities |
31,698 |
14,680 |
60,505 |
39,847 |
|||
|
INVESTING ACTIVITIES |
|||||||
|
Purchases of property and equipment |
(770) |
(1,912) |
(4,062) |
(5,880) |
|||
|
Purchase of held to maturity investments |
— |
— |
— |
(3,000) |
|||
|
Purchases of available-for-sale investments |
(19,334) |
— |
(111,018) |
— |
|||
|
Proceeds from sale of available-for-sale investments |
— |
— |
5,950 |
— |
|||
|
Proceeds from maturities of investments |
10,275 |
— |
13,517 |
— |
|||
|
Net cash used in investing activities |
(9,829) |
(1,912) |
(95,613) |
(8,880) |
|||
|
FINANCING ACTIVITIES |
|||||||
|
Proceeds from exercise of options |
1,286 |
1,542 |
4,465 |
7,926 |
|||
|
Taxes paid related to net share settlement of equity awards |
(6,440) |
(2,564) |
(14,887) |
(2,564) |
|||
|
Proceeds from employee stock purchase plan |
— |
— |
2,595 |
2,401 |
|||
|
Repayments of borrowings |
(688) |
(688) |
(2,062) |
(2,063) |
|||
|
Payment of costs associated with the IPO |
— |
— |
— |
(214) |
|||
|
Payment of tax distributions |
(35) |
(17) |
(35) |
(17) |
|||
|
Net cash provided by (used in) financing activities |
(5,877) |
(1,727) |
(9,924) |
5,469 |
|||
|
Effect of exchange rate changes on cash and cash equivalents |
(543) |
(1,164) |
(27) |
(2,510) |
|||
|
Change in cash and cash equivalents during the period |
15,449 |
9,877 |
(45,059) |
33,926 |
|||
|
Cash and cash equivalents, beginning of period |
190,216 |
278,646 |
250,724 |
254,597 |
|||
|
Cash and cash equivalents, end of period |
$ 205,665 |
$ 288,523 |
$ 205,665 |
$ 288,523 |
|||
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|||||||
|
Cash paid for interest |
$ 310 |
$ 151 |
$ 2,530 |
$ 766 |
|||
|
Cash paid for income taxes |
$ 416 |
$ 939 |
$ 1,484 |
$ 1,425 |
|||
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|||||||
|
Purchase of property and equipment included in accounts payable and accrued expense |
$ 2 |
$ 162 |
$ 2 |
$ 162 |
|||
|
Tax distributions payable to Continuing Equity Owners included in accrued expenses |
$ 3,838 |
$ 1,646 |
$ 3,838 |
$ 1,646 |
|||
|
Clearwater Analytics Holdings, Inc. Reconciliation of Net Loss to Adjusted EBITDA (In thousands, unaudited) |
|||||||
|
Three Months Ended September 30, |
|||||||
|
2023 |
2022 |
||||||
|
(in thousands, except percentages) |
|||||||
|
Net loss |
$ (2,343) |
(2 %) |
$ (3,026) |
(4 %) |
|||
|
Adjustments: |
|||||||
|
Interest (income) expense, net |
(1,733) |
(2 %) |
(693) |
(1 %) |
|||
|
Depreciation and amortization |
2,476 |
3 % |
1,381 |
2 % |
|||
|
Equity-based compensation expense and related payroll taxes |
25,642 |
27 % |
16,701 |
22 % |
|||
|
Equity-based compensation expense related to JUMP acquisition |
5,583 |
6 % |
— |
— |
|||
|
Tax receivable agreement (benefit) expense |
(566) |
(1 %) |
2,600 |
3 % |
|||
|
Transaction expenses |
61 |
0 % |
1,327 |
2 % |
|||
|
Other (benefit) expenses(1) |
(564) |
(1 %) |
559 |
1 % |
|||
|
Adjusted EBITDA |
28,556 |
30 % |
18,849 |
25 % |
|||
|
Revenue |
$ 94,664 |
100 % |
$ 76,552 |
100 % |
|||
|
Nine Months Ended September 30, |
|||||||
|
2023 |
2022 |
||||||
|
(in thousands, except percentages) |
|||||||
|
Net loss |
$ (19,636) |
(7 %) |
$ (4,728) |
(2 %) |
|||
|
Adjustments: |
|||||||
|
Interest (income) expense, net |
(4,422) |
(2 %) |
139 |
— % |
|||
|
Depreciation and amortization |
7,336 |
3 % |
3,499 |
2 % |
|||
|
Equity-based compensation expense and related payroll taxes |
67,823 |
25 % |
48,768 |
22 % |
|||
|
Equity-based compensation expense related to JUMP acquisition |
16,594 |
6 % |
— |
— |
|||
|
Tax receivable agreement expense |
6,112 |
2 % |
5,700 |
3 % |
|||
|
Transaction expenses |
1,612 |
1 % |
1,327 |
1 % |
|||
|
Other expenses(1) |
504 |
— % |
2,081 |
1 % |
|||
|
Adjusted EBITDA |
75,923 |
28 % |
56,786 |
26 % |
|||
|
Revenue |
$ 269,149 |
100 % |
$ 220,739 |
100 % |
|||
|
(1) |
Other (benefit) expenses includes management fees to our investors, 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, and transaction expenses including legal, accounting, and other expenses related to the Secondary Offering. |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
|
(in thousands) |
|||||||
|
Up-C structure expenses |
$ — |
$ — |
$ — |
$ 158 |
|||
|
Amortization of prepaid management fees and reimbursable expenses |
681 |
604 |
1,894 |
1,792 |
|||
|
Provision for (benefit from) income tax expense |
(274) |
424 |
(184) |
959 |
|||
|
Other income, net |
(971) |
(469) |
(1,205) |
(828) |
|||
|
Total other (benefit) expenses |
$ (564) |
$ 559 |
$ 504 |
$ 2,081 |
|||
|
Clearwater Analytics Holdings, Inc. Reconciliation of Free Cash Flow (In thousands, unaudited) |
|||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
|
Net cash provided by operating activities |
$ 31,698 |
$ 14,680 |
$ 60,505 |
$ 39,847 |
|||
|
Less: Purchases of property and equipment |
770 |
1,912 |
4,062 |
5,880 |
|||
|
Free Cash Flow |
$ 30,928 |
$ 12,768 |
$ 56,443 |
$ 33,967 |
|||
|
Clearwater Analytics Holdings, Inc. Reconciliation of Non-GAAP Information (In thousands, except share amounts and per share amounts, unaudited) |
|||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
|
Revenue |
$ 94,664 |
$ 76,552 |
$ 269,149 |
$ 220,739 |
|||
|
Gross profit |
$ 67,651 |
$ 53,832 |
$ 190,357 |
$ 155,928 |
|||
|
Adjustments: |
|||||||
|
Equity-based compensation expense and related payroll taxes |
3,589 |
2,594 |
9,324 |
7,281 |
|||
|
Depreciation and amortization |
1,994 |
863 |
5,897 |
2,197 |
|||
|
Gross profit, non-GAAP |
$ 73,234 |
$ 57,289 |
$ 205,578 |
$ 165,406 |
|||
|
As a percentage of revenue, non-GAAP |
77 % |
75 % |
76 % |
75 % |
|||
|
Cost of Revenue |
$ 27,013 |
$ 22,720 |
$ 78,792 |
$ 64,811 |
|||
|
Adjustments: |
|||||||
|
Equity-based compensation expense and related payroll taxes |
3,589 |
2,594 |
9,324 |
7,281 |
|||
|
Depreciation and amortization |
1,994 |
863 |
5,897 |
2,197 |
|||
|
Cost of revenue, non-GAAP |
$ 21,430 |
$ 19,263 |
$ 63,571 |
$ 55,333 |
|||
|
As a percentage of revenue, non-GAAP |
23 % |
25 % |
24 % |
25 % |
|||
|
Research and development |
$ 32,250 |
$ 25,438 |
$ 90,198 |
$ 69,568 |
|||
|
Adjustments: |
|||||||
|
Equity-based compensation expense and related payroll taxes |
6,738 |
5,133 |
17,186 |
14,003 |
|||
|
Equity-based compensation expense related to JUMP acquisition |
348 |
— |
1,058 |
— |
|||
|
Depreciation and amortization |
255 |
396 |
786 |
878 |
|||
|
Research and development, non-GAAP |
$ 24,909 |
$ 19,909 |
$ 71,168 |
$ 54,687 |
|||
|
As a percentage of revenue, non-GAAP |
26 % |
26 % |
26 % |
25 % |
|||
|
Sales and marketing |
$ 15,020 |
$ 13,187 |
$ 44,049 |
$ 38,254 |
|||
|
Adjustments: |
|||||||
|
Equity-based compensation expense and related payroll taxes |
4,196 |
2,941 |
11,772 |
9,452 |
|||
|
Depreciation and amortization |
143 |
67 |
441 |
199 |
|||
|
Sales and marketing, non-GAAP |
$ 10,681 |
$ 10,179 |
$ 31,836 |
$ 28,603 |
|||
|
As a percentage of revenue, non-GAAP |
11 % |
13 % |
12 % |
13 % |
|||
|
General and administrative |
$ 26,268 |
$ 16,371 |
$ 75,445 |
$ 46,864 |
|||
|
Adjustments: |
|||||||
|
Equity-based compensation expense and related payroll taxes |
11,119 |
6,033 |
29,541 |
18,032 |
|||
|
Equity-based compensation expense related to JUMP acquisition |
5,235 |
— |
15,536 |
— |
|||
|
Depreciation and amortization |
84 |
55 |
212 |
225 |
|||
|
Amortization of prepaid management fees and reimbursable expenses |
681 |
604 |
1,894 |
1,792 |
|||
|
Transaction expenses |
61 |
1,327 |
1,612 |
1,327 |
|||
|
Up-C structure expenses |
— |
— |
— |
158 |
|||
|
General and administrative, non-GAAP |
$ 9,088 |
$ 8,352 |
$ 26,651 |
$ 25,330 |
|||
|
As a percentage of revenue, non-GAAP |
10 % |
11 % |
10 % |
11 % |
|||
|
Income (loss) from operations |
$ (5,887) |
$ (1,164) |
$ (19,335) |
$ 1,242 |
|||
|
Adjustments: |
|||||||
|
Equity-based compensation expense and related payroll taxes |
25,642 |
16,701 |
67,823 |
48,768 |
|||
|
Equity-based compensation expense related to JUMP acquisition |
5,583 |
— |
16,594 |
— |
|||
|
Depreciation and amortization |
2,476 |
1,381 |
7,336 |
3,499 |
|||
|
Amortization of prepaid management fees and reimbursable expenses |
681 |
604 |
1,894 |
1,792 |
|||
|
Transaction expenses |
61 |
1,327 |
1,612 |
1,327 |
|||
|
Up-C structure expenses |
— |
— |
— |
158 |
|||
|
Income from operations, non-GAAP |
$ 28,556 |
$ 18,849 |
$ 75,924 |
$ 56,786 |
|||
|
As a percentage of revenue, non-GAAP |
30 % |
25 % |
28 % |
26 % |
|||
|
Net loss |
$ (2,343) |
$ (3,026) |
$ (19,636) |
$ (4,728) |
|||
|
Adjustments: |
|||||||
|
Equity-based compensation expense and related payroll taxes |
25,642 |
16,701 |
67,823 |
48,768 |
|||
|
Equity-based compensation expense related to JUMP acquisition |
5,583 |
— |
16,594 |
— |
|||
|
Depreciation and amortization |
2,476 |
1,381 |
7,336 |
3,499 |
|||
|
Tax receivable agreement (benefit) expense |
(566) |
2,600 |
6,112 |
5,700 |
|||
|
Amortization of prepaid management fees and reimbursable expenses |
681 |
604 |
1,894 |
1,792 |
|||
|
Transaction expenses |
61 |
1,327 |
1,612 |
1,327 |
|||
|
Up-C structure expenses |
— |
— |
— |
158 |
|||
|
Tax impacts of adjustments to net loss(1) |
(7,815) |
(5,803) |
(20,388) |
(16,668) |
|||
|
Net income, non-GAAP |
$ 23,719 |
$ 13,784 |
$ 61,347 |
$ 39,848 |
|||
|
As a percentage of revenue, non-GAAP |
25 % |
18 % |
23 % |
18 % |
|||
|
Net income per share – basic, non-GAAP |
$ 0.12 |
$ 0.07 |
$ 0.31 |
$ 0.22 |
|||
|
Net income per share – diluted, non-GAAP |
$ 0.09 |
$ 0.06 |
$ 0.24 |
$ 0.16 |
|||
|
Weighted-average common shares outstanding – basic |
201,582,951 |
187,824,531 |
197,903,361 |
184,026,378 |
|||
|
Weighted-average common shares outstanding – diluted |
255,494,034 |
248,934,095 |
256,998,500 |
249,613,673 |
|||
|
(1) |
The estimated non-GAAP effective tax rate was 25% and 29% for the three and nine months ended September 30, 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. |
SOURCE Clearwater Analytics Holdings, Inc.
