Record Quarterly Revenue of $76.6 Million
Third Quarter Revenue Up
19% Year-Over-Year, Up 4.3% Sequentially Over Q2
15
Consecutive Quarters of 98% Gross Revenue Retention
BOISE,
Idaho, Nov. 2, 2022 /PRNewswire/ -- 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, 2022.
![Clearwater Analytics (PRNewsfoto/Clearwater Analytics, LLC) Clearwater Analytics (PRNewsfoto/Clearwater Analytics, LLC)](https://mma.prnewswire.com/media/1502063/Clearwater_Analytics_Logo.jpg)
"Clearwater delivered a strong
quarter as we won large and global organizations such as Nationwide
Mutual Insurance Company, Continental General, Chandler Asset
Management, and Bronte Capital, achieving our mission to expand
into new geographies and adjacent markets. Through the pending
acquisition of JUMP Technology in France, we will diversify our product
portfolio while expanding our software to be an end-to-end
investment lifecycle and achieving immediate scale in Europe," said Sandeep
Sahai, Chief Executive Officer. "We're proud of the momentum
we've maintained in Q3 which we believe is due to our high customer
satisfaction and focused go-to-market activities. As companies
around the globe tighten their belts, they have astutely determined
that Clearwater is the smart
choice for their required productivity. With many of the world's
largest organizations making strategic investments in their future
with Clearwater, we are honored by
their partnership and look forward to helping them grow and
thrive."
Third Quarter 2022 Financial
Results Summary
- Revenue: Total revenue for the third quarter of 2022
reached $76.6 million, an increase of
19%, from $64.5 million in the third
quarter of 2021.
- Gross Profit: Gross profit for the third quarter of 2022
was $53.8 million, compared with
$46.7 million in the third quarter of
2021. Non-GAAP gross profit for the third quarter of 2022 was
$57.3 million, which equates to a
74.8% non-GAAP gross margin.
- Net Income/(Loss): Net loss for the third quarter of
2022 was $3.0 million compared with
net loss of $11.4 million in the
third quarter of 2021. In the third quarter of 2022, the Company
recorded a $2.6 million expense
related to its Tax Receivable Agreement and $1.3 million in transaction expenses related to
the JUMP Technology acquisition. 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
2022 increased by 59% to $13.8
million from $8.7 million in
the third quarter of 2021.
- Adjusted EBITDA: Adjusted EBITDA for the third quarter
of 2022 was $18.8 million, compared
with $17.1 million in the third
quarter of 2021. Adjusted EBITDA margin for the third quarter of
2022 was 24.6%.
- Cash Flows: Operating cash flows for the third quarter
were $14.7 million and free cash
flows were $12.8 million reflecting a
68% conversion of Adjusted EBITDA to free cash flow.
- Net Income/(Loss) Per Share and Non-GAAP Net Income Per
Share attributable to Clearwater Analytics Holdings, Inc.: Net
loss per basic share was $0.02, and
net loss per diluted share was $0.01
in the third quarter of 2022. Non-GAAP net income per basic share
was $0.07, and non-GAAP net income
per diluted share was $0.06 in the
third quarter of 2022.
- Cash: Cash, cash equivalents and short-term investments
were $291.5 million as of
September 30, 2022.
Third Quarter 2022 Key Metrics
Summary
- Annualized Recurring Revenue: As of September 30, 2022, annualized recurring revenue
("ARR") reached $303.6 million, an
increase of 18.1% from $257.0 million
as of September 30, 2021.
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, 2022, the gross revenue retention
rate was 98%. The Company has reported a gross revenue retention
rate of 98% for fifteen 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 September30, 2022, the
net revenue retention rate was 103%, a decline from 104% as of
June 30, 2022. The new pricing
construct discussed on our August 3,
2022 earnings call has started to bear fruit and has
partially offset ARR decreases in the third quarter of 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 announced that it had entered into an
agreement to acquire Paris,
France-based JUMP Technology. The transaction will vastly
expand Clearwater Analytics' total addressable market in investment
management with a complete front-to-back solution. JUMP
Technology's solutions are expected to benefit existing
Clearwater customers, provide
cross-sell opportunities in both the insurance and asset management
markets, and expand the Company's reach across Europe. Clearwater expects the acquisition to close in
the fourth quarter of 2022.
- Clearwater Analytics continued strong growth momentum across
new markets and geographies. In the third quarter, we added marquee
clients such as Nationwide Mutual Insurance Company, Altos Labs,
Inc., Chandler Asset Management, Inc., Continental General
Insurance Company, FAI Capital Management, Inc., The Bank of Nevis
Limited, and Sonatus, Inc., as well as expanded our footprint
within existing clients.
-
- Chimera Investment Corporation, an internally managed real
estate investment trust (REIT) headquartered in New York City and publicly traded on the NYSE,
is now live with Clearwater to
provide investment data transparency while supporting sophisticated
accounting requirements.
- INTÉRIALE Mutual, a leading French insurer, is live with
Clearwater Analytics as its investment accounting and reporting
service provider.
- Bronte Capital, a Sydney-based, global long/short fund manager,
selected Clearwater to power its
investment data management, reporting, and portfolio
analytics.
- Clearwater Analytics hosted its Clearwater Connect conference
in Boise, Idaho in September. More
than 500 current and prospective Clearwater Analytics users learned
about the Company's award-winning platform and explored the future
of investment operations. Clearwater Connect attendees got a first
look at the newest features and capabilities of the Clearwater platform and learned how these
innovative technologies can be used to significantly boost business
productivity and growth opportunities.
- In the third quarter of 2022, Clearwater Analytics announced
the appointments of Lisa Jones, an
asset management veteran and Head of the Americas, President, and
CEO of Amundi US, Inc., and Jaswinder Pal
Singh, a Princeton Computer Science Professor and SaaS tech
pioneer, to its Board of Directors.
- In the third quarter of 2022, Captive Review named Clearwater
Analytics the winner of the 2022 US Captive Review Awards in the
Software Solution category.
- To offer additional insight into how insurance companies manage
their assets, Clearwater Analytics, in collaboration with The
Insurance Asset Outsourcing Exchange, announced the publication of
the 2022 Insurance Investment Outsourcing Report. This ninth annual
report found continued substantial growth in insurance companies'
use of third-party investment management solutions.
Third Quarter and Full-Year 2022
Guidance
|
|
Fourth Quarter 2022
|
|
Full Year 2022
|
Revenue
|
|
$79.3 million to
$81.3 million
|
|
$300 million to $302
million
|
Year-over-Year Growth
%
|
|
~14% to
16%
|
|
~19% to
20%
|
Adjusted
EBITDA
|
|
$22.2 million to
$23.2 million
|
|
$79 million to $80
million
|
Revenue guidance for the fourth quarter of 2022 and full year
2022 assumes, based on management's estimates, approximately
$1 million in revenue from JUMP
Technology post-acquisition, which is dependent on the timing of
closing such acquisition.
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.
Conference Call Details
Clearwater Analytics will hold a conference call and webcast on
November 2, 2022, at 5:00 p.m. Eastern time to discuss third quarter
2022 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 is a global industry-leading SaaS solution
for automated investment data aggregation, reconciliation,
accounting, compliance, risk, performance, and reporting. Each day,
the Clearwater solution reports on
more than $5.9 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 to deliver timely,
validated investment data and analytics. Additional information
about Clearwater can be found at
clearwateranalytics.com, LinkedIn, and Twitter.
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 diluted share 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 diluted share 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, 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,"
"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
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) complete the acquisition of JUMP
Technology on the Company's expected timing or at all, (ii)
successfully integrate the operations and technology of JUMP
Technology with those of the Company, and (iii) retain the
management and employees or 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
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, 2021 filed on
March 16, 2022, 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
|
|
|
|
2022
|
|
|
2021
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
288,523
|
|
|
$
|
254,597
|
|
Short-term
investments
|
|
|
3,000
|
|
|
|
—
|
|
Accounts receivable,
net
|
|
|
65,241
|
|
|
|
50,190
|
|
Prepaid expenses and
other current assets
|
|
|
16,382
|
|
|
|
16,551
|
|
Total current
assets
|
|
|
373,146
|
|
|
|
321,338
|
|
Property and equipment,
net
|
|
|
13,534
|
|
|
|
10,738
|
|
Operating lease
right-of-use assets, net
|
|
|
21,402
|
|
|
|
—
|
|
Deferred contract
costs, non-current
|
|
|
5,765
|
|
|
|
5,687
|
|
Debt issuance costs -
line of credit
|
|
|
776
|
|
|
|
922
|
|
Other non-current
assets
|
|
|
5,105
|
|
|
|
5,670
|
|
Total assets
|
|
$
|
419,728
|
|
|
$
|
344,355
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,714
|
|
|
$
|
1,416
|
|
Accrued expenses and
other current liabilities
|
|
|
25,745
|
|
|
|
27,032
|
|
Notes payable, current
portion
|
|
|
2,750
|
|
|
|
2,750
|
|
Operating lease
liability, current portion
|
|
|
5,343
|
|
|
|
—
|
|
Total current
liabilities
|
|
|
35,552
|
|
|
|
31,198
|
|
Notes payable, less
current maturities and unamortized debt issuance costs
|
|
|
49,158
|
|
|
|
51,157
|
|
Operating lease
liability, less current portion
|
|
|
17,411
|
|
|
|
—
|
|
Tax receivable
agreement liability
|
|
|
5,700
|
|
|
|
—
|
|
Other long-term
liabilities
|
|
|
1,644
|
|
|
|
132
|
|
Total
liabilities
|
|
|
109,465
|
|
|
|
82,487
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
Class A common stock,
par value $0.001 per share; 1,500,000,000 shares authorized,
59,199,868 shares issued and outstanding as of September 30, 2022,
47,948,888 shares issued and outstanding as of December 31,
2021
|
|
|
59
|
|
|
|
48
|
|
Class B common stock,
par value $0.001 per share; 500,000,000 shares authorized,
1,662,802 shares issued and outstanding as of September 30, 2022,
11,151,110 shares issued and outstanding as of December 31,
2021
|
|
|
2
|
|
|
|
11
|
|
Class C common stock,
par value $0.001 per share; 500,000,000 shares authorized,
47,377,587 shares issued and outstanding as of September 30, 2022
and December 31, 2021
|
|
|
47
|
|
|
|
47
|
|
Class D common stock,
par value $0.001 per share; 500,000,000 shares authorized,
130,083,755 shares issued and outstanding as of September 30, 2022
and December 31, 2021
|
|
|
130
|
|
|
|
130
|
|
Additional
paid-in-capital
|
|
|
432,640
|
|
|
|
388,591
|
|
Accumulated other
comprehensive loss
|
|
|
(1,880)
|
|
|
|
(34)
|
|
Accumulated
Deficit
|
|
|
(184,648)
|
|
|
|
(191,926)
|
|
Total stockholders'
equity attributable to Clearwater Analytics Holdings,
Inc.
|
|
|
246,350
|
|
|
|
196,867
|
|
Non-controlling
interests
|
|
|
63,913
|
|
|
|
65,001
|
|
Total stockholders'
equity
|
|
|
310,263
|
|
|
|
261,868
|
|
Total liabilities and
Stockholders' Equity
|
|
$
|
419,728
|
|
|
$
|
344,355
|
|
Clearwater Analytics
Holdings, Inc. Consolidated Statements of
Operations (In thousands, except share amounts and per
share amounts, unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Revenue
|
|
$
|
76,552
|
|
|
$
|
64,489
|
|
|
$
|
220,739
|
|
|
$
|
182,259
|
|
Cost of
revenue(2)
|
|
|
22,720
|
|
|
|
17,785
|
|
|
|
64,811
|
|
|
|
47,683
|
|
Gross profit
|
|
|
53,832
|
|
|
|
46,704
|
|
|
|
155,928
|
|
|
|
134,576
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development(2)
|
|
|
25,438
|
|
|
|
18,415
|
|
|
|
69,568
|
|
|
|
50,991
|
|
Sales and
marketing(2)
|
|
|
13,187
|
|
|
|
10,126
|
|
|
|
38,254
|
|
|
|
26,151
|
|
General and
administrative(2)
|
|
|
16,371
|
|
|
|
10,900
|
|
|
|
46,864
|
|
|
|
29,627
|
|
Total operating
expenses
|
|
|
54,996
|
|
|
|
39,441
|
|
|
|
154,686
|
|
|
|
106,769
|
|
Income (loss) from
operations
|
|
|
(1,164)
|
|
|
|
7,263
|
|
|
|
1,242
|
|
|
|
27,807
|
|
Interest (income)
expense, net
|
|
|
(693)
|
|
|
|
8,302
|
|
|
|
139
|
|
|
|
25,261
|
|
Tax receivable
agreement expense
|
|
|
2,600
|
|
|
|
—
|
|
|
|
5,700
|
|
|
|
—
|
|
Loss on debt
extinguishment
|
|
|
—
|
|
|
|
10,303
|
|
|
|
—
|
|
|
|
10,303
|
|
Other income,
net
|
|
|
(469)
|
|
|
|
(130)
|
|
|
|
(828)
|
|
|
|
(65)
|
|
Loss before provision
for income taxes
|
|
|
(2,602)
|
|
|
|
(11,212)
|
|
|
|
(3,769)
|
|
|
|
(7,692)
|
|
Provision for income
taxes
|
|
|
424
|
|
|
|
216
|
|
|
|
959
|
|
|
|
536
|
|
Net loss
|
|
|
(3,026)
|
|
|
|
(11,428)
|
|
|
|
(4,728)
|
|
|
|
(8,228)
|
|
Less: Net income (loss)
attributable to non-controlling interests
|
|
|
(52)
|
|
|
|
(3,114)
|
|
|
|
277
|
|
|
|
86
|
|
Net loss attributable to Clearwater Analytics
Holdings, Inc.
|
|
$
|
(2,974)
|
|
|
$
|
(8,314)
|
|
|
$
|
(5,005)
|
|
|
$
|
(8,314)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to Class A and Class D common
stock(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.02)
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.05)
|
|
Diluted
|
|
$
|
(0.01)
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
of Class A and Class D common stock
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
187,824,531
|
|
|
|
177,449,844
|
|
|
|
184,026,378
|
|
|
|
177,449,844
|
|
Diluted
|
|
|
237,869,291
|
|
|
|
235,978,541
|
|
|
|
237,441,224
|
|
|
|
235,978,541
|
|
|
(1) Basic and diluted
net loss per share of Class A and Class D common stock is
applicable only for the periods after the IPO and related
transactions.
|
|
(2) Amounts include
equity-based compensation as follows:
|
|
Cost of
revenue
|
|
$
|
2,594
|
|
|
$
|
899
|
|
|
$
|
7,281
|
|
|
$
|
2,171
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
5,133
|
|
|
|
2,226
|
|
|
|
14,003
|
|
|
|
5,912
|
|
Sales and
marketing
|
|
|
2,941
|
|
|
|
1,655
|
|
|
|
9,452
|
|
|
|
3,782
|
|
General and
administrative
|
|
|
6,033
|
|
|
|
2,903
|
|
|
|
18,032
|
|
|
|
7,374
|
|
Total equity-based
compensation expense
|
|
$
|
16,701
|
|
|
$
|
7,683
|
|
|
$
|
48,768
|
|
|
$
|
19,239
|
|
Clearwater Analytics
Holdings, Inc. Consolidated Statements of Cash
Flows (In thousands, unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,026)
|
|
|
$
|
(11,428)
|
|
|
$
|
(4,728)
|
|
|
$
|
(8,228)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
1,381
|
|
|
|
792
|
|
|
|
3,499
|
|
|
|
2,204
|
|
Noncash operating
lease cost
|
|
|
1,891
|
|
|
|
—
|
|
|
|
5,226
|
|
|
|
—
|
|
Equity-based
compensation
|
|
|
16,701
|
|
|
|
7,683
|
|
|
|
48,768
|
|
|
|
19,239
|
|
Change in tax
receivable liability
|
|
|
2,600
|
|
|
|
—
|
|
|
|
5,700
|
|
|
|
—
|
|
Amortization of
deferred contract acquisition costs
|
|
|
1,154
|
|
|
|
893
|
|
|
|
3,221
|
|
|
|
2,404
|
|
Amortization of debt
issuance costs, included in interest expense
|
|
|
71
|
|
|
|
500
|
|
|
|
210
|
|
|
|
1,474
|
|
Deferred tax
benefit
|
|
|
(106)
|
|
|
|
—
|
|
|
|
(590)
|
|
|
|
—
|
|
Debt extinguishment
costs
|
|
|
—
|
|
|
|
10,303
|
|
|
|
—
|
|
|
|
10,303
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
(9,648)
|
|
|
|
(3,924)
|
|
|
|
(15,051)
|
|
|
|
(16,117)
|
|
Prepaid expenses and
other assets
|
|
|
1,563
|
|
|
|
2,287
|
|
|
|
1,618
|
|
|
|
(8,717)
|
|
Deferred
commissions
|
|
|
(1,478)
|
|
|
|
(1,677)
|
|
|
|
(3,593)
|
|
|
|
(2,922)
|
|
Accounts
payable
|
|
|
661
|
|
|
|
544
|
|
|
|
240
|
|
|
|
194
|
|
Accrued expenses and
other liabilities
|
|
|
2,916
|
|
|
|
1,291
|
|
|
|
(4,673)
|
|
|
|
(8,893)
|
|
Net cash provided by
(used in) operating activities
|
|
|
14,680
|
|
|
|
7,264
|
|
|
|
39,847
|
|
|
|
(9,059)
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,912)
|
|
|
|
(1,268)
|
|
|
|
(5,880)
|
|
|
|
(3,499)
|
|
Purchase of short-term
investments
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,000)
|
|
|
|
—
|
|
Net cash used in
investing activities
|
|
|
(1,912)
|
|
|
|
(1,268)
|
|
|
|
(8,880)
|
|
|
|
(3,499)
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of common units
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,560
|
|
Proceeds from exercise
of options
|
|
|
1,542
|
|
|
|
8
|
|
|
|
7,926
|
|
|
|
259
|
|
Minimum tax
withholding paid on behalf of employees for net share/unit
settlement
|
|
|
(2,564)
|
|
|
|
(1,598)
|
|
|
|
(2,564)
|
|
|
|
(2,185)
|
|
Repurchase of common
units
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(626)
|
|
Proceeds from employee
stock purchase plan
|
|
|
—
|
|
|
|
—
|
|
|
|
2,401
|
|
|
|
—
|
|
Repayments of
borrowings
|
|
|
(688)
|
|
|
|
(432,692)
|
|
|
|
(2,063)
|
|
|
|
(434,231)
|
|
Payments of costs
associated with early repayment of debt
|
|
|
—
|
|
|
|
(2,029)
|
|
|
|
—
|
|
|
|
(2,029)
|
|
Proceeds from
borrowings
|
|
|
—
|
|
|
|
55,000
|
|
|
|
—
|
|
|
|
55,000
|
|
Payment of debt
issuance costs
|
|
|
—
|
|
|
|
(1,400)
|
|
|
|
—
|
|
|
|
(1,400)
|
|
Proceeds from initial
public offering, net of underwriting discounts
|
|
|
—
|
|
|
|
582,188
|
|
|
|
—
|
|
|
|
582,188
|
|
Payment of costs
associated with the IPO
|
|
|
—
|
|
|
|
(1,450)
|
|
|
|
(214)
|
|
|
|
(1,850)
|
|
Payment of tax
distributions
|
|
|
(17)
|
|
|
|
—
|
|
|
|
(17)
|
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
|
|
(1,727)
|
|
|
|
198,027
|
|
|
|
5,469
|
|
|
|
196,686
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
(1,164)
|
|
|
|
11
|
|
|
|
(2,510)
|
|
|
|
(122)
|
|
Net change in cash and
cash equivalents during the period
|
|
|
9,877
|
|
|
|
204,034
|
|
|
|
33,926
|
|
|
|
184,006
|
|
Cash and cash
equivalents, beginning of period
|
|
|
278,646
|
|
|
|
41,060
|
|
|
|
254,597
|
|
|
|
61,088
|
|
Cash and cash
equivalents, end of period
|
|
$
|
288,523
|
|
|
$
|
245,094
|
|
|
$
|
288,523
|
|
|
$
|
245,094
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
151
|
|
|
$
|
10,078
|
|
|
$
|
766
|
|
|
$
|
25,847
|
|
Cash paid for income
taxes
|
|
$
|
939
|
|
|
$
|
104
|
|
|
$
|
1,425
|
|
|
$
|
67
|
|
NON-CASH INVESTING AND FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment included in accounts payable and accrued
expense
|
|
$
|
162
|
|
|
$
|
325
|
|
|
$
|
162
|
|
|
$
|
325
|
|
Direct costs incurred
with the IPO included in other assets and accrued
expenses
|
|
$
|
—
|
|
|
$
|
3,251
|
|
|
$
|
—
|
|
|
$
|
3,251
|
|
Tax distributions to
unitholders included in accrued expenses
|
|
$
|
1,646
|
|
|
$
|
—
|
|
|
$
|
1,646
|
|
|
$
|
—
|
|
Clearwater Analytics
Holdings, Inc. Reconciliation of Net Loss to Adjusted
EBITDA (In thousands, unaudited)
|
|
|
|
Three Months Ended September
30,
|
|
|
|
2022
|
|
|
2021
|
|
Net loss
|
|
$
|
(3,026)
|
|
|
|
(4)
|
%
|
|
$
|
(11,428)
|
|
|
|
(18)
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense, net
|
|
|
(693)
|
|
|
|
-1
|
%
|
|
|
8,302
|
|
|
|
13
|
%
|
Loss on debt
extinguishment
|
|
|
—
|
|
|
|
0
|
%
|
|
|
10,303
|
|
|
|
16
|
%
|
Depreciation and
amortization
|
|
|
1,381
|
|
|
|
2
|
%
|
|
|
792
|
|
|
|
1
|
%
|
Equity-based
compensation
|
|
|
16,701
|
|
|
|
22
|
%
|
|
|
7,683
|
|
|
|
12
|
%
|
Tax receivable
agreement expense
|
|
|
2,600
|
|
|
|
3
|
%
|
|
|
—
|
|
|
|
0
|
%
|
Transaction
expenses(1)
|
|
|
1,327
|
|
|
|
2
|
%
|
|
|
—
|
|
|
|
0
|
%
|
Other
expenses(2)
|
|
|
559
|
|
|
|
1
|
%
|
|
|
1,430
|
|
|
|
2
|
%
|
Adjusted EBITDA
|
|
|
18,849
|
|
|
|
25
|
%
|
|
|
17,082
|
|
|
|
26
|
%
|
Revenue
|
|
$
|
76,552
|
|
|
|
|
|
$
|
64,489
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2022
|
|
|
2021
|
|
Net loss
|
|
$
|
(4,728)
|
|
|
|
(2)
|
%
|
|
$
|
(8,228)
|
|
|
|
(5)
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
139
|
|
|
|
0
|
%
|
|
|
25,261
|
|
|
|
14
|
%
|
Loss on debt
extinguishment
|
|
|
—
|
|
|
|
0
|
%
|
|
|
10,303
|
|
|
|
6
|
%
|
Depreciation and
amortization
|
|
|
3,499
|
|
|
|
2
|
%
|
|
|
2,204
|
|
|
|
1
|
%
|
Equity-based
compensation
|
|
|
48,768
|
|
|
|
22
|
%
|
|
|
19,239
|
|
|
|
11
|
%
|
Tax receivable
agreement expense
|
|
|
5,700
|
|
|
|
3
|
%
|
|
|
—
|
|
|
|
0
|
%
|
Transaction
expenses(1)
|
|
|
1,327
|
|
|
|
1
|
%
|
|
|
—
|
|
|
|
0
|
%
|
Other
expenses(2)
|
|
|
2,081
|
|
|
|
1
|
%
|
|
|
3,825
|
|
|
|
2
|
%
|
Adjusted EBITDA
|
|
|
56,786
|
|
|
|
26
|
%
|
|
|
52,604
|
|
|
|
29
|
%
|
Revenue
|
|
$
|
220,739
|
|
|
|
100
|
%
|
|
$
|
182,259
|
|
|
|
100
|
%
|
|
(1) Transaction expenses include
legal, accounting, banking, diligence, and other expenses related
to completed and contemplated acquisitions.
|
(2) Other 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.
|
|
|
|
Three Months Ended September
30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Up-C structure
expenses
|
|
$
|
—
|
|
|
$
|
726
|
|
|
$
|
158
|
|
|
$
|
1,652
|
|
Management fees and
reimbursed expenses
|
|
|
604
|
|
|
|
618
|
|
|
|
1,792
|
|
|
|
1,702
|
|
Provision for income
tax expense
|
|
|
424
|
|
|
|
216
|
|
|
|
959
|
|
|
|
536
|
|
Miscellaneous
|
|
|
(469)
|
|
|
|
(130)
|
|
|
|
(828)
|
|
|
|
(65)
|
|
Total other
expenses
|
|
$
|
559
|
|
|
$
|
1,430
|
|
|
$
|
2,081
|
|
|
$
|
3,825
|
|
Clearwater
Analytics Holdings, Inc. Reconciliation of Free Cash
Flow (In thousands, unaudited)
|
|
|
|
Three Months Ended September
30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net cash provided by
(used in) operating activities
|
|
$
|
14,680
|
|
|
$
|
7,264
|
|
|
$
|
39,847
|
|
|
$
|
(9,059)
|
|
Less: Purchases of
property and equipment
|
|
|
1,912
|
|
|
|
1,268
|
|
|
|
5,880
|
|
|
|
3,499
|
|
Free Cash
Flow
|
|
$
|
12,768
|
|
|
$
|
5,996
|
|
|
$
|
33,967
|
|
|
$
|
(12,558)
|
|
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,
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Revenue
|
$
|
76,552
|
|
|
$
|
64,489
|
|
|
$
|
220,739
|
|
|
$
|
182,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
$
|
53,832
|
|
|
$
|
46,704
|
|
|
$
|
155,928
|
|
|
$
|
134,576
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation
|
|
2,594
|
|
|
|
899
|
|
|
|
7,281
|
|
|
|
2,171
|
|
Depreciation and
amortization
|
|
863
|
|
|
|
457
|
|
|
|
2,197
|
|
|
|
1,228
|
|
Gross profit,
non-GAAP
|
$
|
57,289
|
|
|
$
|
48,060
|
|
|
$
|
165,406
|
|
|
$
|
137,975
|
|
As a percentage of
revenue, non-GAAP
|
|
75
|
%
|
|
|
75
|
%
|
|
|
75
|
%
|
|
|
76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Revenue
|
$
|
22,720
|
|
|
$
|
17,785
|
|
|
$
|
64,811
|
|
|
$
|
47,683
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation
|
|
2,594
|
|
|
|
899
|
|
|
|
7,281
|
|
|
|
2,171
|
|
Depreciation and
amortization
|
|
863
|
|
|
|
457
|
|
|
|
2,197
|
|
|
|
1,228
|
|
Cost of revenue,
non-GAAP
|
$
|
19,263
|
|
|
$
|
16,429
|
|
|
$
|
55,333
|
|
|
$
|
44,284
|
|
As a percentage of
revenue, non-GAAP
|
|
25
|
%
|
|
|
25
|
%
|
|
|
25
|
%
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
$
|
25,438
|
|
|
$
|
18,415
|
|
|
$
|
69,568
|
|
|
$
|
50,991
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation
|
|
5,133
|
|
|
|
2,226
|
|
|
|
14,003
|
|
|
|
5,912
|
|
Depreciation and
amortization
|
|
396
|
|
|
|
221
|
|
|
|
878
|
|
|
|
643
|
|
Research and
development, non-GAAP
|
$
|
19,909
|
|
|
$
|
15,968
|
|
|
$
|
54,687
|
|
|
$
|
44,436
|
|
As a percentage of
revenue, non-GAAP
|
|
26
|
%
|
|
|
25
|
%
|
|
|
25
|
%
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
$
|
13,187
|
|
|
$
|
10,126
|
|
|
$
|
38,254
|
|
|
$
|
26,151
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation
|
|
2,941
|
|
|
|
1,655
|
|
|
|
9,452
|
|
|
|
3,782
|
|
Depreciation and
amortization
|
|
67
|
|
|
|
63
|
|
|
|
199
|
|
|
|
183
|
|
Sales and marketing,
non-GAAP
|
$
|
10,179
|
|
|
$
|
8,408
|
|
|
$
|
28,603
|
|
|
$
|
22,186
|
|
As a percentage of
revenue, non-GAAP
|
|
13
|
%
|
|
|
13
|
%
|
|
|
13
|
%
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
$
|
16,371
|
|
|
$
|
10,900
|
|
|
$
|
46,864
|
|
|
$
|
29,627
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation
|
|
6,033
|
|
|
|
2,903
|
|
|
|
18,032
|
|
|
|
7,374
|
|
Depreciation and
amortization
|
|
55
|
|
|
|
51
|
|
|
|
225
|
|
|
|
150
|
|
Management fees and
reimbursed expenses
|
|
604
|
|
|
|
618
|
|
|
|
1,792
|
|
|
|
1,702
|
|
Transaction
expenses
|
|
1,327
|
|
|
|
—
|
|
|
|
1,327
|
|
|
|
—
|
|
Up-C structure
expenses
|
|
—
|
|
|
|
726
|
|
|
|
158
|
|
|
|
1,652
|
|
General and
administrative, non-GAAP
|
$
|
8,352
|
|
|
$
|
6,602
|
|
|
$
|
25,330
|
|
|
$
|
18,749
|
|
As a percentage of
revenue, non-GAAP
|
|
11
|
%
|
|
|
10
|
%
|
|
|
11
|
%
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$
|
(1,164)
|
|
|
$
|
7,263
|
|
|
$
|
1,242
|
|
|
$
|
27,807
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation
|
|
16,701
|
|
|
|
7,683
|
|
|
|
48,768
|
|
|
|
19,239
|
|
Depreciation and
amortization
|
|
1,381
|
|
|
|
792
|
|
|
|
3,499
|
|
|
|
2,204
|
|
Management fees and
reimbursed expenses
|
|
604
|
|
|
|
618
|
|
|
|
1,792
|
|
|
|
1,702
|
|
Transaction
expenses
|
|
1,327
|
|
|
|
—
|
|
|
|
1,327
|
|
|
|
—
|
|
Up-C structure
expenses
|
|
—
|
|
|
|
726
|
|
|
|
158
|
|
|
|
1,652
|
|
Income from operations,
non-GAAP
|
$
|
18,849
|
|
|
$
|
17,082
|
|
|
$
|
56,786
|
|
|
$
|
52,604
|
|
As a percentage of
revenue, non-GAAP
|
|
25
|
%
|
|
|
26
|
%
|
|
|
26
|
%
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(3,026)
|
|
|
$
|
(11,428)
|
|
|
$
|
(4,728)
|
|
|
$
|
(8,228)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation
|
|
16,701
|
|
|
|
7,683
|
|
|
|
48,768
|
|
|
|
19,239
|
|
Depreciation and
amortization
|
|
1,381
|
|
|
|
792
|
|
|
|
3,499
|
|
|
|
2,204
|
|
Tax receivable
agreement expense
|
|
2,600
|
|
|
|
—
|
|
|
|
5,700
|
|
|
|
—
|
|
Management fees and
reimbursed expenses
|
|
604
|
|
|
|
618
|
|
|
|
1,792
|
|
|
|
1,702
|
|
Transaction
expenses
|
|
1,327
|
|
|
|
—
|
|
|
|
1,327
|
|
|
|
—
|
|
Up-C structure
expenses
|
|
—
|
|
|
|
726
|
|
|
|
158
|
|
|
|
1,652
|
|
Loss on extinguishment
of debt
|
|
—
|
|
|
|
10,303
|
|
|
|
—
|
|
|
|
10,303
|
|
Tax impacts of
adjustments to net loss(1)
|
|
(5,803)
|
|
|
|
—
|
|
|
|
(16,668)
|
|
|
|
—
|
|
Net income,
non-GAAP
|
$
|
13,784
|
|
|
$
|
8,694
|
|
|
$
|
39,848
|
|
|
$
|
26,872
|
|
As a percentage of
revenue, non-GAAP
|
|
18
|
%
|
|
|
13
|
%
|
|
|
18
|
%
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share(2) - basic, non-GAAP
|
$
|
0.07
|
|
|
NMF
|
|
|
$
|
0.22
|
|
|
NMF
|
|
Net income per
share(2) - diluted, non-GAAP
|
$
|
0.06
|
|
|
NMF
|
|
|
$
|
0.16
|
|
|
NMF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding - basic
|
|
187,824,531
|
|
|
|
177,449,844
|
|
|
|
184,026,378
|
|
|
|
177,449,844
|
|
Weighted-average common
shares outstanding - diluted
|
|
248,934,095
|
|
|
|
235,978,541
|
|
|
|
249,613,673
|
|
|
|
235,978,541
|
|
|
|
|
NMF - not
meaningful
|
|
(1) The estimated
non-GAAP effective tax rate was 29% for the three and nine months
ended September 30, 2022 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.
|
|
(2) Basic and diluted
net income per share of Class A and Class D common stock is
applicable only for the periods after the IPO and related
transactions.
|
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SOURCE Clearwater Analytics, LLC