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21.02.2023 22:15:00

Clearwater Analytics Announces Fourth Quarter and Full Year 2022 Financial Results

Q4 2022 Revenue of $82.7 million, up 19% year-over-year
Full Year 2022 Revenue of $303.4 million, up 20% year-over-year
Q4 2022 EBITDA margin of 29.4%; Q4 2022 Free Cash Flows of $16.6 million
Q4 2022 Gross Revenue Retention Rate of 98%; Net Revenue Retention Rate of 106%

BOISE, Idaho, Feb. 21, 2023 /PRNewswire/ -- Clearwater Analytics Holdings, Inc. (NYSE: CWAN) ("Clearwater Analytics" or the "Company"), a leading provider of SaaS-based investment accounting, reporting, and analytics solutions, today announced its financial results for the quarter and year ended December 31, 2022.

Clearwater Analytics (PRNewsfoto/Clearwater Analytics, LLC)



Fourth Quarter 2022


Full Year 2022

Revenue


$82.7 million


$303.4 million

Year-over-Year Revenue Growth %


18.5 %


20.4 %

Annualized Recurring Revenue (ARR)1




$323.5 million

Year-over-Year ARR Growth %




16.4 %

Net Loss


$(2.0) million


$(6.7) million

Net Loss Margin %


(2.4) %


(2.2) %

Adjusted EBITDA


$24.3 million


$81.1 million

Adjusted EBITDA Margin %


29.4 %


26.7 %

1ARR is a point in time metric, therefore fourth quarter 2022 and full year 2022 results are the same.


"I am proud to report that 2022 was our strongest year on record. We welcomed marquee clients across the globe, displaced legacy vendors, drove R&D and technology innovation, and empowered our clients to gain tremendous efficiency. While the world continues to face a challenging macroeconomic environment with both high interest rates and high inflation, we balanced growth and profitability while generating strong cash flow," said Sandeep Sahai, Chief Executive Officer. "The leadership team, and frankly the entire company, demonstrated resiliency with agile and deliberate adjustments to our business model. This promises to help us maintain our momentum, grow our leadership position, and further underscores what differentiates Clearwater."

Fourth Quarter 2022 Financial Results Summary 

  • Revenue: Total revenue for the fourth quarter of 2022 reached $82.7 million, an increase of 18.5%, from $69.8 million in the fourth quarter of 2021. Results for the fourth quarter of and fiscal year 2022 include the results of the JUMP Technology acquisition from December 1, 2022.

  • Gross Profit: Gross profit for the fourth quarter of 2022 was $59.7 million, compared with $49.6 million in the fourth quarter of 2021. Non-GAAP gross profit for the fourth quarter of 2022 was $62.6 million, which equates to a 75.7% non-GAAP gross margin.

  • Net Income/(Loss): Net loss for the fourth quarter of 2022 was $2.0 million compared with net income of $0.1 million in the fourth quarter of 2021. In the fourth quarter of 2022, the Company recorded a $5.9 million expense related to its Tax Receivable Agreement and $0.4 million in transaction expenses related to the JUMP Technology acquisition. Non-GAAP net income for the fourth quarter of 2022 increased by 23.3% to $17.2 million from $14.0 million in the fourth quarter of 2021.

  • Adjusted EBITDA: Adjusted EBITDA for the fourth quarter of 2022 was $24.3 million, compared with $20.1 million in the fourth quarter of 2021. Adjusted EBITDA margin for the fourth quarter of 2022 was 29.4%.

  • Cash Flows: Operating cash flows for the fourth quarter were $18.5 million. Free cash flows for the fourth quarter were $16.6 million, compared with $10.9 million in the fourth quarter of 2021. Free cash flows reflected a 68% conversion of Adjusted EBITDA to free cash flow.

  • 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 $0.02 in the fourth quarter of 2022. Non-GAAP net income per basic share was $0.09, and non-GAAP net income per diluted share was $0.07 in the fourth quarter of 2022.

  • Cash, cash equivalents and short-term investments were $255.6 million as of December 31, 2022, compared to $254.6 million as of December 31, 2021.

Fourth Quarter and Full Year 2022 Key Metrics Summary 

  • Annualized Recurring Revenue: As of December 31, 2022, annualized recurring revenue ("ARR") reached $323.5 million and includes $6.4 million of JUMP Technology's ARR, an increase of 16.4% from $277.8 million as of December 31, 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 December 31, 2022, the gross revenue retention rate was 98%. The Company has reported a gross revenue retention rate of approximately 98% for sixteen 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 December 31, 2022, the net revenue retention rate was 106%, an increase from 103% as of September 30, 2022. The new pricing construct continues to bear fruit and reduces volatility in ARR.

    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.

  • Clients: As of December 31, 2022, the Company, including JUMP Technology, had 1,262 clients, and 67 clients that contributed at least $1.0 million in ARR.

  • Assets Under Management (AUM): As of December 31, 2022, the platform processes and reports on $6.4 trillion assets daily, compared to $5.9 trillion assets daily as of December 31, 2021.

Recent Business Highlights

  • In the last one hundred days of 2022, two more of the top twenty insurers by AUM in the U.S. chose to move off legacy platforms and migrate to the Clearwater platform.

  • Clearwater Analytics announced that it completed the acquisition of Paris, France-based JUMP Technology. In the fourth quarter of 2022, JUMP Technology contributed $2.7 million in revenue. The transaction expands Clearwater Analytics' total addressable market in investment management with a complete end-to-end lifecycle solution. With the addition of JUMP Technology, Clearwater Analytics further positions itself to become an industry-leading provider of innovative, modularized solutions to investment management companies globally. Luxembourg-based insurance provider Cardif Lux Vie selected the Clearwater JUMP solution to meet its asset management, investment accounting, and reporting needs. Cardif Lux Vie cited JUMP Technology now integrated into the Clearwater group for its best-of-breed solutions and dedicated client services team that will enable the insurer to reduce operational risk, comply with regulatory requirements, and achieve greater operational efficiencies.

  • In 2022, Clearwater Analytics focused on building out its multi-product offering by introducing Clearwater Prism and Clearwater LPx. Clearwater Prism and Clearwater LPx have gained traction in the market, solving some of our clients' most complex investment reporting needs.

    • Clearwater LPx is an investment data platform dedicated to streamlining the accounting process for limited partnerships. Clearwater clients leverage the automated solution to enable significant efficiency gains and solve the operational challenges associated with data aggregation, reconciliation, commitment tracking, document storage, accounting, and reporting. Clients are using Clearwater LPx to gain a full picture of all of their limited partnerships and to automate their NAIC reporting.

    • Clearwater Prism is a reporting engine that combines information from multiple data sources, including those outside of the core Clearwater platform. In 2022, existing client J.P. Morgan Asset Management expanded its relationship with Clearwater Analytics to implement a regulatory reporting solution. The Clearwater platform with Clearwater Prism aggregates data and performs a series of calculations and data validations that generate templated reports for J.P. Morgan Asset Management to comply with a daily regulatory reporting obligation. At Clearwater Connect 2022, J.P. Morgan Asset Management was the recipient of the Partnered for Success award for driving breakthrough efficiencies in investment accounting with Clearwater Analytics.

  • To further expand Clearwater's footprint within existing clients, Clearwater Analytics continued strong growth momentum across new markets and geographies. In the fourth quarter, we added marquee clients such as Adventist Health System, Avallis Investments, Bimini Advisors, Homestead Advisers Corp., Meeder Investment Management, MSIG Insurance (Thailand) Public Company Limited, Payden & Rygel, PT Asuransi MSIG Indonesia, Robinson Capital Management, and WestCap Management. Singapore-based fund manager Avallis Investments selected Clearwater Analytics to power its investment data management, portfolio analytics, and investment reporting operations in order to drive higher growth across its business. By eliminating the need to manually aggregate, reconcile, and validate data from different sources and systems, Avallis Investments will benefit from having "a single pane of glass" to holistically view their entire investment portfolio and easily respond to unique reporting challenges.

  • In the fourth quarter of 2022, Clearwater Analytics won numerous industry awards, including:

    • RiskTech Buyside 50 award in the Investment Lifecycle in the Insurance/Pensions Fund category
    • WatersTechnology 2022 Buy-Side Technology award for the best buy-side client reporting platform for 2022
    • Award for Excellence 2022 from InsuranceAsia News as the Technology Provider of the Year
    • European Insurance Technology award from InsurancePost as the Best Reg Tech Solution
    • Technology Firm of the Year from Insurance Asset Management

First Quarter and Full Year 2023 Guidance



First Quarter 2023


Full Year 2023

Revenue


$83 million


$361 million to $364 million

Year-over-Year Growth %


~17%


~19% to 20%

Adjusted EBITDA


$20 million


$97 million to $98 million

Equity-based compensation




~$80 million

Equity-based compensation for JUMP Technology post-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, 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 February 21, 2023, at 5:00 p.m. Eastern time to discuss fourth quarter and full year 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 (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 clearwateranalytics.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 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) 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 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, those discussed under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 that will be filed following this earnings release, 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)




December 31




2022



2021


Assets







Current assets:







Cash and cash equivalents


$

250,724



$

254,597


Short-term investments



4,890





Accounts receivable, net



72,972




50,190


Prepaid expenses and other current assets



28,679




16,551


Total current assets



357,265




321,338


Property and equipment, net



15,064




10,738


Operating lease right-of-use assets, net



24,114





Deferred contract costs, non-current



6,563




5,687


Debt issuance costs - line of credit



728




922


Other non-current assets



6,855




5,670


Intangible assets, net



29,456





Goodwill



43,791





Total assets


$

483,836



$

344,355


Liabilities and Stockholders' Equity







Current liabilities:







Accounts payable


$

3,092



$

1,416


Accrued expenses and other current liabilities



43,036




27,032


Notes payable, current portion



2,750




2,750


Operating lease liability, current portion



5,851





Tax receivable agreement liability



12,200





Total current liabilities



66,929




31,198


Notes payable, less current maturities and unamortized debt issuance costs



48,492




51,157


Operating lease liability, less current portion



19,505





Other long-term liabilities



10,524




132


Total liabilities



145,450




82,487


Stockholders' Equity







Class A common stock, par value $0.001 per share; 1,500,000,000 shares authorized, 61,148,890 shares issued and outstanding as of December 31, 2022, 47,948,888 shares issued and outstanding as of December 31, 2021



61




48


Class B common stock, par value $0.001 per share; 500,000,000 shares authorized, 1,439,251 shares issued and outstanding as of December 31, 2022, 11,151,110 shares issued and outstanding as of December 31, 2021



1




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 December 31, 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 December 31, 2022 and December 31, 2021



130




130


Additional paid-in-capital



455,320




388,591


Accumulated other comprehensive loss (loss)



609




(34)


Accumulated Deficit



(186,647)




(191,926)


Total stockholders' equity attributable to Clearwater Analytics Holdings, Inc.



269,521




196,867


Non-controlling interests



68,865




65,001


Total stockholders' equity



338,386




261,868


Total liabilities and Stockholders' Equity


$

483,836



$

344,355


 

Clearwater Analytics Holdings, Inc.

Consolidated Statements of Operations

(In thousands, except share amounts and per share amounts, unaudited)




Three Months Ended
December 31,



Year Ended
December 31,




2022



2021



2022



2021


Revenue


$

82,687



$

69,762



$

303,426



$

252,022


Cost of revenue(2)



22,973




20,180




87,784




67,864


Gross profit



59,714




49,582




215,642




184,158


Operating expenses:













Research and development(2)



24,553




21,699




94,120




72,690


Sales and marketing(2)



14,383




12,914




52,638




39,065


General and administrative(2)



16,903




14,316




63,767




43,942


Total operating expenses



55,839




48,929




210,525




155,697


Income from operations



3,875




653




5,117




28,461


Interest (income) expense, net



(1,276)




421




(1,137)




25,682


Tax receivable agreement expense



5,939







11,639





Loss on debt extinguishment












10,303


Other (income) expense, net



778




147




(50)




83


Income (loss) before provision for income taxes



(1,566)




85




(5,335)




(7,607)


Provision for income taxes



401




(49)




1,360




487


Net income (loss)



(1,967)




134




(6,695)




(8,094)


Less: Net income attributable to non-controlling interests



941




33




1,272




119


Net income (loss) attributable to Clearwater Analytics
Holdings, Inc.


$

(2,908)



$

101



$

(7,967)



$

(8,213)















Net income (loss) per share attributable to Class A and Class D common stock(1):













Basic and diluted


$

(0.02)



$

0.00



$

(0.04)



$

(0.05)















Weighted average shares of Class A and Class D common stock
outstanding:













Basic and diluted



190,015,070




177,695,551




185,560,683




177,680,507




(1) Basic and diluted net loss per share of Class A and Class D common stock is applicable only for the period from September 24, 2021 to December 31, 2022, which is the period following our initial public offering and related transactions.

(2) Amounts include equity-based compensation as follows:


Cost of revenue


$

1,761



$

2,614



$

9,043



$

4,786


Operating expenses:













Research and development



3,947




4,497




17,950




10,409


Sales and marketing



3,259




3,278




12,711




7,059


General and administrative



6,134




7,068




24,166




14,441


General and administrative - JUMP acquisition



1,821







1,821





Total equity-based compensation expense


$

16,922



$

17,457



$

65,691



$

36,695


   

Clearwater Analytics Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands, unaudited)




Three Months Ended
December 31,



Year Ended December 31,




2022



2021



2022



2021


OPERATING ACTIVITIES













Net income (loss)


$

(1,967)



$

134



$

(6,695)



$

(8,094)


Adjustments to reconcile net income (loss) to net cash provided by operating activities:













Depreciation and amortization



1,640




1,289




5,139




3,493


Noncash operating lease cost



1,600







5,950





Equity-based compensation



16,922




17,457




65,691




36,695


Change in tax receivable liability



6,500







12,200





Amortization of deferred contract acquisition costs



1,106




981




4,327




3,385


Amortization of debt issuance costs, included in interest expense



70




71




279




1,545


Debt extinguishment costs












10,303


Deferred tax benefit



(214)




(648)




(803)




(675)


Changes in operating assets and liabilities, excluding the impact of business acquisitions:













Accounts receivable, net



(4,444)




(1,191)




(19,495)




(17,308)


Prepaid expenses and other assets



(6,659)




(4,446)




(5,059)




(13,136)


Deferred commissions



(2,253)




(2,238)




(5,845)




(5,161)


Accounts payable



1,369




167




1,609




361


Accrued expenses and other liabilities



5,406




3,142




1,743




500


Accrued sales tax liability



(561)




(2,301)




(1,036)




(8,550)


Deferred revenue













Accrued interest on debt













Net cash provided by operating activities



18,515




12,417




58,005




3,358


INVESTING ACTIVITIES













Purchases of property and equipment



(1,877)




(1,526)




(7,758)




(5,025)


Purchase of short-term investments









(3,000)





Acquisition of business, net of cash acquired



(65,793)







(65,793)





Net cash used in investing activities



(67,670)




(1,526)




(76,551)




(5,025)


FINANCING ACTIVITIES













Proceeds from issuance of common units












1,560


Proceeds from exercise of options



10,358




2,571




18,284




2,830


Minimum tax withholding paid on behalf of employees for net share/ unit settlement



(624)







(3,189)




(2,185)


Repurchase of common units












(626)


Proceeds from employee stock purchase plan



1,814







4,215





Repayments of borrowings



(688)




(688)




(2,750)




(434,919)


Payments of costs associated with early repayment of debt












(2,029)


Proceeds from borrowings












55,000


Payment of debt issuance costs












(1,400)


Proceeds from initial public offering, net of underwriting discounts












582,188


Payment of costs associated with the IPO






(3,281)




(214)




(5,131)


Payment of tax distributions to Continuing Equity Owners



(117)







(117)





Net cash provided by (used in) financing activities



10,743




(1,398)




16,229




195,288


Effect of exchange rate changes on cash and cash equivalents



613




10




(1,556)




(112)


Change in cash and cash equivalents during the period



(37,799)




9,503




(3,873)




193,509


Cash and cash equivalents, beginning of period



288,523




245,094




254,597




61,088


Cash and cash equivalents, end of period


$

250,724



$

254,597



$

250,724



$

254,597

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION













Cash paid for interest


$

629



$

266



$

1,395



$

26,113


Cash paid for income taxes


$

619



$

501



$

2,044



$

802


NON-CASH INVESTING AND FINANCING ACTIVITIES













Purchase of property and equipment included in accounts payable and accrued expense


$

350



$

322



$

350



$

322


Disposal of property and equipment


$

3,098



$



$

3,098





Business acquisition holdback liability included in accrued expense and other long-term liabilities


$

6,999



$



$

6,999





Direct costs incurred with the IPO included in other assets and accrued expenses


$



$






$

214


Tax distributions payable to Continuing Equity Holders included in accrued expenses


$

3,196



$

169



$

3,196



$

169


Tax liability related to organization transaction included in accrued expenses


$



$

793



$



$

793


   

Clearwater Analytics Holdings, Inc.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(In thousands, unaudited)




Three Months Ended December 31,




2022



2021


Net income (loss)


$

(1,967)




(2)

%


$

134




0

%

Adjustments:













Interest (income) expense, net



(1,276)




(2)

%



421




1

%

Depreciation and amortization



1,639




2

%



1,289




2

%

Equity-based compensation expense and related payroll taxes



15,935




19

%



17,457




25

%

Equity-based compensation expense related to JUMP acquisition



1,821




2

%







Tax receivable agreement expense



5,939




7

%







Other expenses(1)



2,257




3

%



763




1

%

Adjusted EBITDA



24,348




29

%



20,064




29

%

Revenue


$

82,687




100

%


$

69,762




100

%





Year Ended December 31,




2022



2021


Net loss


$

(6,695)




(2)

%


$

(8,094)




(3)

%

Adjustments:













Interest (income) expense, net



(1,137)




0

%



25,682




10

%

Loss on debt extinguishment






0

%



10,303




4

%

Depreciation and amortization



5,139




2

%



3,493




1

%

Equity-based compensation expense and related payroll taxes



64,704




21

%



36,695




15

%

Equity-based compensation expense related to JUMP acquisition



1,821




1

%







Tax receivable agreement expense



11,639




4

%







Other expenses(1)



5,665




2

%



4,597




2

%

Adjusted EBITDA



81,136




27

%



72,676




29

%

Revenue


$

303,426




100

%


$

252,022




100

%

(1) 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, and transaction expenses including legal, accounting, banking, consulting, diligence, and other expenses related to completed and contemplated acquisitions.


 



Three Months Ended December 31,



Year Ended December 31,




2022



2021



2022



2021


Up-C structure expenses


$



$



$

158



$

1,660


Transaction expenses



384







1,711





Amortization of prepaid management fees and reimbursable expenses



694




665




2,486




2,367


Provision for income tax expense



401




(49)




1,360




487


Miscellaneous



778




147




(50)




83


Total other expenses


$

2,257



$

763



$

5,665



$

4,597


 

Clearwater Analytics Holdings, Inc.

Reconciliation of Free Cash Flow

(In thousands, unaudited)




Three Months Ended December 31,



Year Ended December 31,




2022



2021



2022



2021


Net cash provided by operating activities


$

18,515



$

12,417



$

58,005



$

3,358


 Less: Purchases of property and equipment



1,877




1,526




7,758




5,025


Free Cash Flow


$

16,638



$

10,891



$

50,247



$

(1,667)


 

Clearwater Analytics Holdings, Inc.

Reconciliation of Non-GAAP Information

(In thousands, except share amounts and per share amounts, unaudited)



Three Months Ended December 31,



Year Ended December 31,



2022



2021



2022



2021


Revenue

$

82,687



$

69,762



$

303,426



$

252,022














Gross profit

$

59,714



$

49,582



$

215,642



$

184,158


Adjustments:












 Equity-based compensation expense and related payroll taxes


1,801




2,614




9,083




4,786


 Depreciation and amortization


1,093




473




3,290




1,701


Gross profit, non-GAAP

$

62,608



$

52,669



$

228,015



$

190,645


As a percentage of revenue, non-GAAP


76

%



75

%



75

%



76

%













Cost of Revenue

$

22,973



$

20,180



$

87,784



$

67,864


Adjustments:












 Equity-based compensation expense and related payroll taxes


1,801




2,614




9,083




4,786


 Depreciation and amortization


1,093




473




3,290




1,701


Cost of revenue, non-GAAP

$

20,079



$

17,093



$

75,411



$

61,377


As a percentage of revenue, non-GAAP


24

%



25

%



25

%



24

%













Research and development

$

24,553



$

21,699



$

94,120



$

72,690


Adjustments:












 Equity-based compensation expense and related payroll taxes


4,013




4,497




18,016




10,409


 Depreciation and amortization


415




693




1,293




1,337


Research and development, non-GAAP

$

20,125



$

16,509



$

74,811



$

60,944


As a percentage of revenue, non-GAAP


24

%



24

%



25

%



24

%













Sales and marketing

$

14,383



$

12,914



$

52,638



$

39,065


Adjustments:












 Equity-based compensation expense and related payroll taxes


3,937




3,278




13,389




7,059


 Depreciation and amortization


87




67




286




249


Sales and marketing, non-GAAP

$

10,359



$

9,569



$

38,963



$

31,757


As a percentage of revenue, non-GAAP


13

%



14

%



13

%



13

%

















General and administrative

$

16,903



$

14,316



$

63,767



$

43,942


Adjustments:












 Equity-based compensation expense and related payroll taxes


6,184




7,068




24,216




14,441


 Equity-based compensation expense related to JUMP acquisition


1,821







1,821





 Depreciation and amortization


44




56




270




206


 Management fees and reimbursed expenses


694




665




2,486




2,367


 Transaction expenses


384







1,711





 Up-C structure expenses








158




1,660


General and administrative, non-GAAP

$

7,776



$

6,527



$

33,105



$

25,268


As a percentage of revenue, non-GAAP


9

%



9

%



11

%



10

%













Income from operations

$

3,875



$

653



$

5,117



$

28,461


Adjustments:












 Equity-based compensation expense and related payroll taxes


15,935




17,457




64,704




36,695


 Equity-based compensation expense related to JUMP acquisition


1,821







1,821





 Depreciation and amortization


1,639




1,289




5,139




3,493


 Management fees and reimbursed expenses


694




665




2,486




2,367


 Transaction expenses


384







1,711





 Up-C structure expenses








158




1,660


Income from operations, non-GAAP

$

24,348



$

20,064



$

81,136



$

72,676


As a percentage of revenue, non-GAAP


29

%



29

%



27

%



29

%













Net income (loss)

$

(1,967)



$

134



$

(6,695)



$

(8,094)


Adjustments:












 Equity-based compensation expense and related payroll taxes


15,935




17,457




64,704




36,695


 Equity-based compensation expense related to JUMP acquisition


1,821







1,821





 Depreciation and amortization


1,639




1,289




5,139




3,493


 Tax receivable agreement expense


5,939







11,639





 Management fees and reimbursed expenses


694




665




2,486




2,367


 Transaction expenses


384







1,711





 Up-C structure expenses








158




1,660


 Loss on extinguishment of debt











10,303


 Tax impacts of adjustments to net loss(1)


(7,205)




(5,564)




(23,874)




(13,604)


Net income, non-GAAP

$

17,240



$

13,981



$

57,089



$

32,820


As a percentage of revenue, non-GAAP


21

%



20

%



19

%



13

%













Net income per share(2) - basic, non-GAAP

$

0.09



$

0.08



$

0.31



$

0.18


Net income per share(2) - diluted, non-GAAP

$

0.07



$

0.06



$

0.23



$

0.13














Weighted-average common shares outstanding - basic


190,015,070




177,695,551




185,560,683




177,680,507


Weighted-average common shares outstanding - diluted


252,020,192




252,300,560




249,664,138




252,298,649



NMF - not meaningful

(1) The estimated non-GAAP effective tax rate was 29% for the three months and year ended December 31, 2022 and 2021, 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 loss per share of Class A and Class D common stock is applicable only for the period from September 24, 2021 to December 31, 2022, which is the period following our initial public offering and related transactions.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/clearwater-analytics-announces-fourth-quarter-and-full-year-2022-financial-results-301752174.html

SOURCE Clearwater Analytics, LLC

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