Press Release

Clearwater Analytics Announces Third Quarter 2021 Financial Results

Q3 2021 Revenue of $64.5 million, up 21% year-over-year
Q3 2021 Gross Revenue Retention Rate of 98%; Net Revenue Retention Rate of 111%

BOISE, Idaho — November 3, 2021 — Clearwater Analytics Holdings, Inc. (NYSE: CWAN),(“Clearwater Analytics” or the “Company”), an industry-leading SaaS solution for automated investment data aggregation, reconciliation, accounting, and reporting, announced today its financial results for the quarter ended September 30, 2021.

“We are very pleased that Clearwater Analytics’ consistent, reliable, and durable growth over the last several years has continued with our financial results for the third quarter of 2021 – our first quarter as a publicly-traded company,” said Sandeep Sahai, Chief Executive Officer, Clearwater Analytics. “We radically simplify investment accounting, reporting, and analytics for our clients, who face challenges including low yields, increasing complexity and globalization of invested assets, rising demand for risk management, and increasing regulatory complexity. Our high quality 100% SaaS business and financial model, combined with ongoing investments in R&D, enables our platform to be a disruptor in a market with legacy technology incumbents.”


Third Quarter 2021 Financial Results Summary

  • Revenue: Total revenue for the third quarter of 2021 reached $64.5 million, an increase of 20.9%, from $53.4 million in the third quarter of 2020.
  • Gross Profit: Gross profit for the third quarter of 2021 was $46.7 million compared with $41.0 million in the third quarter of 2020.
  • Gross margin was 72.4%, versus 76.9% in the third quarter of 2020. Gross margin decreased primarily due to increased equity-based compensation expense and investment to support the onboarding of new clients. Non-GAAP gross profit for the third quarter of 2021 was $48.1 million, and non-GAAP gross margin was 74.5%.
  • Income from Operations: Income from operations for the third quarter of 2021 was $7.3 million compared with $16.5 million in the third quarter of 2020. Income from operations in the third quarter of 2021 included $7.7 million of equity-based compensation, representing a $6.0 million increase from the third quarter of 2020.
  • Net Income/(Loss): Net loss for the third quarter of 2021 was $11.4 million compared with net income of $11.5 million in the third quarter of 2020. Net loss in the third quarter of 2021 included a $10.3 million loss on debt extinguishment. Non-GAAP net income for the third quarter of 2021 was $8.7 million compared with non-GAAP net income of $14.0 million in the third quarter of 2020.
  • Net Income/(Loss) Per Share attributable to Clearwater Analytics Holdings, Inc.: Net loss per basic and diluted share was $0.05 in the third quarter of 2021.
  • Adjusted EBITDA: Adjusted EBITDA for the third quarter of 2021 was $17.1 million, compared with $19.0 million in the third quarter of 2020. Adjusted EBITDA margin for the third quarter of 2021 was 26.5%.
  • Cash: Cash and cash equivalents were $245.1 million as of September 30, 2021.


Third Quarter 2021 Key Metrics Summary

  • Annualized Recurring Revenue: As of September 30, 2021, annualized recurring revenue (“ARR”) reached $257.0 million, an increase of 20% from $214.9 million at September 30, 2020.
    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, 2021, gross revenue retention rate was 98%. The Company has reported a gross revenue retention rate of 98% for eleven consecutive 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, 2021, net revenue retention rate was 111%, which represents a 220 basis point improvement over 109% at September 30, 2020.
    Net revenue retention rate is the percentage of recurring revenue retained 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

  • International expansion momentum with key wins including a fast-growing insurance firm in Asia, a European insurer and reinsurer, and a UK-based property and casualty insurer.

  • North America client wins across core targeted markets featuring several large asset management firms, a number of large insurers and reinsurers, corporations spanning multiple industries including pharmaceuticals, energy, high-tech, and consumer goods, a large West Coast-based city and county government, and a Midwest-based community foundation.

  • A partnership with OneUnited Bank, the largest Black-owned bank in the U.S., to launch technology-based solutions that will enable Clearwater Analytics’ corporate clients to invest money more easily into minority communities via minority depository institutions and direct deposits.

  • Clearwater Analytics’ annual North American user conference, Clearwater Connect, held last week with our clients and prospects. Sessions covered trending topics important to Clearwater Analytics’ clients, including ESG investing, insurance client survey findings, LIBOR, and Clearwater Analytics’ platform-specific updates.

  • The Company’s IPO transaction that priced on September 23, 2021, commemorated with Clearwater Analytics’ executive team ringing The Opening Bell® at the New York Stock Exchange (NYSE) on September 24.


Fourth Quarter and Full-Year 2021 Guidance

  • Total revenue is expected to be in the range of $66.0 million to $67.0 million for the fourth quarter of 2021, which implies full-year 2021 revenue of $248.3 million to $249.3 million or full-year revenue growth of 22% to 23%.
  • Adjusted EBITDA margin is expected to be approximately 26% for the fourth quarter of 2021, which implies full-year 2021 adjusted EBITDA margin of approximately 28%.

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, consistent with Securities and Exchange Commission (the “SEC”) rules, 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, given that it is not an indicator of business performance.


Conference Call Details
Clearwater Analytics will hold a conference call and webcast on November 3, 2021, at 5:00 p.m. Eastern time to discuss financial results for the third quarter of 2021, 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 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 is a global industry-leading SaaS solution for automated investment data aggregation, reconciliation, accounting, compliance, risk, performance, and reporting. Each day, the Clearwater Analytics solution reports on more than $5.6 trillion in assets for clients that include leading insurers, asset managers, corporations, pension plans, governments, and nonprofit organizations – helping them make the most of their investment portfolio data with a world-class product and client-centric servicing. Investment professionals around the globe trust Clearwater Analytics to deliver timely, validated investment data and analytics.


Investor Contact:
J.R. Ritchie | +1 312-632-9779 |

Media Contact:
Gail Marold | +1 919-229-9141 |


Use of non-GAAP Information
This press release contains certain non-GAAP measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP diluted earnings per share.

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, non-GAAP income from operations, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share, 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 financing and capital structures, taxation positions or regimes, restructuring, impairment and other charges.


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 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,” “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 competitors in its industry, 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 SEC, including but not limited to those discussed under “Risk Factors” in the Company’s Registration Statement on Form S-1, declared effective on September 23, 2021 and in periodic reports filed by Clearwater Analytics with the SEC and its reports to shareholders. These filings are available at 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.