Clearwater Analytics Holdings Inc
NYSE:CWAN
Clearwater Analytics Holdings Inc
Clearwater Analytics Holdings Inc., a luminary in the financial tech landscape, has carved a niche by providing an industry-leading cloud-native platform for investment accounting, reporting, and analytics. Founded with a vision to revolutionize how institutional investors manage their portfolios, the company has grown to become a trusted partner for major insurers, asset managers, corporations, and government entities worldwide. Clearwater's platform centralizes and streamlines the complex web of data that these financial players grapple with daily. By eliminating the reliance on outdated, manual, and often error-prone legacy systems, Clearwater delivers real-time, comprehensive solutions that clients depend on to make informed decisions. This enables their clients to enhance operational efficiency and focus on strategic investment activities rather than being bogged down by administrative tasks.
Underlying Clearwater's financial prowess is a business model that capitalizes on subscription-based revenue streams. The company charges its clients a recurrent fee for access to its platform, which integrates seamlessly with the clients' existing systems, enabling Clearwater to develop long-term relationships characterized by high retention rates. This model assures Clearwater of a consistent and predictable revenue flow while providing continuous updates and enhancements to its platform, further deepening customer loyalty. Moreover, Clearwater's model fosters a symbiotic relationship with its clientele: as client portfolios grow in complexity or size, the need for Clearwater's advanced analytics becomes even more indispensable, fueling Clearwater's growth while reinforcing its position as a backbone in the investment accounting and analytics sector.
Clearwater Analytics Holdings Inc., a luminary in the financial tech landscape, has carved a niche by providing an industry-leading cloud-native platform for investment accounting, reporting, and analytics. Founded with a vision to revolutionize how institutional investors manage their portfolios, the company has grown to become a trusted partner for major insurers, asset managers, corporations, and government entities worldwide. Clearwater's platform centralizes and streamlines the complex web of data that these financial players grapple with daily. By eliminating the reliance on outdated, manual, and often error-prone legacy systems, Clearwater delivers real-time, comprehensive solutions that clients depend on to make informed decisions. This enables their clients to enhance operational efficiency and focus on strategic investment activities rather than being bogged down by administrative tasks.
Underlying Clearwater's financial prowess is a business model that capitalizes on subscription-based revenue streams. The company charges its clients a recurrent fee for access to its platform, which integrates seamlessly with the clients' existing systems, enabling Clearwater to develop long-term relationships characterized by high retention rates. This model assures Clearwater of a consistent and predictable revenue flow while providing continuous updates and enhancements to its platform, further deepening customer loyalty. Moreover, Clearwater's model fosters a symbiotic relationship with its clientele: as client portfolios grow in complexity or size, the need for Clearwater's advanced analytics becomes even more indispensable, fueling Clearwater's growth while reinforcing its position as a backbone in the investment accounting and analytics sector.
Revenue Beat: Q3 revenue reached $205.1 million, up 77% year-over-year and exceeded the high end of guidance by over $1 million.
ARR Growth: Annualized recurring revenue (ARR) hit $807.5 million, also up 77% year-over-year, showing robust business momentum.
Margin Expansion: Gross margin reached 78.5%, hitting targets set for 2027 much earlier than expected; EBITDA margin rose to 34.5%, up 140 basis points from last year.
Profitability Upside: Adjusted EBITDA was $70.7 million, more than $5 million above guidance, allowing both debt paydown and share repurchases.
Retention Strength: Gross revenue retention remained at an impressive 98% for the quarter, sustaining nearly seven years of high durability.
Cross-sell Acceleration: Bookings for core cross-sell modules grew 70% year-over-year, with asset management bookings becoming the largest segment for the first time.
AI Driving Efficiency: Generative AI drove significant operational gains, with up to 90% reduction in manual reconciliation and faster reporting cycles.
Raised Guidance: Q4 revenue is forecast at $216–217 million, and full-year revenue at $730–731 million; full-year EBITDA margin expected at 34%, both above prior guidance.
