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Clearwater Analytics Holdings (CWAN)
NYSE:CWAN
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Clearwater Analytics Holdings (CWAN) AI Stock Analysis

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CWAN

Clearwater Analytics Holdings

(NYSE:CWAN)

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Outperform 74 (OpenAI - 4o)
Rating:74Outperform
Price Target:
$22.50
▲(18.17% Upside)
Clearwater Analytics Holdings shows strong financial performance and positive earnings call sentiment, supported by strategic corporate events like share buybacks and board expansion. However, technical indicators suggest caution with potential overbought conditions, and the lack of a dividend yield may deter income-focused investors. Overall, the stock presents a promising growth opportunity with some risks to consider.
Positive Factors
Revenue Growth
Clearwater's significant revenue growth indicates strong demand for its solutions, reinforcing its market position and supporting future expansion.
Strategic Partnerships
The partnership with Bloomberg enhances Clearwater's service offerings, potentially expanding its client base and strengthening its competitive edge.
Share Buyback Program
The share buyback program reflects confidence in the company's financial health and commitment to enhancing shareholder value, supporting long-term growth.
Negative Factors
GAAP Loss
The GAAP loss highlights potential challenges in managing acquisition costs, which could impact profitability if not addressed effectively.
Variable Net Revenue Retention
Variable retention rates for Enfusion suggest challenges in client retention, which could affect revenue stability if not improved.
Operational Efficiency
Low EBIT and EBITDA margins indicate room for operational efficiency improvements, essential for sustaining long-term profitability.

Clearwater Analytics Holdings (CWAN) vs. SPDR S&P 500 ETF (SPY)

Clearwater Analytics Holdings Business Overview & Revenue Model

Company DescriptionClearwater Analytics Holdings, Inc. develops and provides a Software-as-a-Service solution for automated investment data aggregation, reconciliation, accounting, and reporting services to insurers, investment managers, corporations, institutional investors, and government entities. The company offers investment accounting and reporting, performance measurement, compliance monitoring, and risk analytics solutions. Its Clearwater Prism solution enables self-service access to data feeds from accounting, compliance, performance, and risk systems, including those offered by the company and other third-party software vendors, as well as provides flexible reporting to various users. The company was incorporated in 2021 and is headquartered in Boise, Idaho.
How the Company Makes MoneyClearwater Analytics generates revenue primarily through a subscription-based model, where clients pay for access to its software and services. The company offers tiered pricing based on the size of the client's assets under management (AUM) and the specific features they utilize. Key revenue streams include fees from software subscriptions, professional services for implementation and training, and ongoing support and maintenance. Additionally, Clearwater has formed strategic partnerships with financial institutions and technology providers, enhancing its service offerings and expanding its market reach, which contributes significantly to its earnings.

Clearwater Analytics Holdings Key Performance Indicators (KPIs)

Any
Any
Revenue by Geography
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Chart InsightsClearwater Analytics is experiencing robust growth in both the United States and Rest of World segments, with a notable surge in the latest quarter. The U.S. market shows consistent expansion, while the Rest of World segment has doubled, reflecting strategic global initiatives. The earnings call highlights a 70% revenue increase and successful acquisitions, suggesting strong future prospects. The partnership with Bloomberg and high client engagement further bolster growth potential, despite a GAAP loss due to acquisition costs. Investors should watch for continued momentum and integration benefits.
Data provided by:Main Street Data

Clearwater Analytics Holdings Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in revenue and EBITDA, successful integration of acquisitions, and strong client and employee engagement. Despite a GAAP loss due to acquisition-related costs and variable retention rates for Enfusion, the overall sentiment is positive due to the strong financial performance and future growth prospects.
Q2-2025 Updates
Positive Updates
Record Revenue and Growth
Total revenue grew 70% year-on-year to $181.9 million, with core business contributing $130.6 million, representing a solid 22% year-over-year organic growth. ARR was $783.5 million, up 83.4% year-on-year.
Strong Adjusted EBITDA Performance
Adjusted EBITDA was $58.3 million, representing 32.1% of revenue and up 74.3% year-on-year. This was 70 basis points higher than the stand-alone profitability in Q2 of 2024.
Successful Integration of Acquired Companies
The integration of Enfusion and Beacon was completed with $20 million in synergies realized, achieving the full year 1 target within the first few days as an integrated company.
High Gross Margin Achievement
Delivered a gross margin of 77.4% in Q2, with the core accounting and analytics business exceeding 80% gross margin for the quarter.
Bloomberg Partnership
Announced a partnership with Bloomberg to deliver a full front-to-back solution for large asset managers, creating a bidirectional integration between Bloomberg AIM and Clearwater.
Strong Client and Employee Engagement
Engaged over 450 clients and 2,600 employees to share plans and build a shared vision for the integrated business, receiving near unanimous enthusiasm for the vision and direction.
Negative Updates
GAAP Loss in the Quarter
Recorded a GAAP loss in the quarter due to increased intangible amortization expenses and costs related to the acquisitions, as well as increased interest expense.
Variable Enfusion NRR
The net revenue retention rate for the consolidated business was 110%, with efforts ongoing to improve retention metrics for Enfusion to achieve the company target of 115%.
Company Guidance
During the Clearwater Analytics Second Quarter 2025 Financial Results Call, the company provided robust guidance, highlighting significant growth metrics. Total revenue for the quarter reached $181.9 million, representing a year-over-year increase of 70%, with the core business contributing $130.6 million, showing a 22% organic growth. The company's Annualized Recurring Revenue (ARR) surged by 83.4% year-on-year to $783.5 million. The core Net Revenue Retention (NRR) was reported at 114%, while consolidated NRR was 110%, indicating strong client retention and expansion of services. Adjusted EBITDA grew by 74.3% year-on-year to $58.3 million, accounting for 32.1% of revenue, which marked an improvement of 70 basis points compared to the same period in the previous year. The company also achieved a gross margin of 77.4%, surpassing expectations despite integrating the less profitable Enfusion business. Looking ahead, Clearwater Analytics projects third-quarter revenue between $203 million and $204 million, with a full-year revenue forecasted at $726 million to $732 million, reflecting a 61% to 62% growth rate. Adjusted EBITDA for the third quarter is expected to be around $65 million, maintaining a margin of 32%, with a full-year EBITDA target of $232 million to $237 million.

Clearwater Analytics Holdings Financial Statement Overview

Summary
Clearwater Analytics Holdings demonstrates strong financial performance with impressive revenue growth and profitability metrics. The balance sheet is solid with manageable leverage, and cash flows are improving, supporting the company's growth trajectory. However, attention should be given to operational efficiency and maintaining sustainable profit margins to ensure long-term success.
Income Statement
78
Positive
Clearwater Analytics Holdings shows strong revenue growth with a 15.79% increase in TTM, indicating robust demand for its software solutions. The gross profit margin remains healthy at 70.56%, reflecting efficient cost management. However, the net profit margin is exceptionally high at 73.71%, likely due to one-time gains or accounting adjustments, which may not be sustainable. EBIT and EBITDA margins are relatively low, suggesting room for improvement in operational efficiency.
Balance Sheet
72
Positive
The company's balance sheet is stable with a manageable debt-to-equity ratio of 0.47, indicating prudent leverage. The return on equity is strong at 36.15%, showcasing effective use of shareholder funds. However, the equity ratio is moderate, suggesting a balanced approach to financing with both debt and equity. The company should continue to monitor its debt levels to maintain financial flexibility.
Cash Flow
75
Positive
Cash flow analysis reveals a positive trajectory with a 2.01% growth in free cash flow, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.72, suggesting that a significant portion of net income is backed by cash flow. The free cash flow to net income ratio is high at 0.93, reflecting strong cash conversion. Continued focus on cash flow management will be crucial for sustaining growth.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue551.09M451.80M368.17M303.43M252.02M203.22M
Gross Profit388.83M328.82M261.04M215.64M184.16M149.96M
EBITDA36.05M24.41M-6.82M5.12M31.95M-18.15M
Net Income406.20M424.38M-21.63M-6.70M-8.09M-44.23M
Balance Sheet
Total Assets3.02B1.17B558.74M483.84M344.36M115.56M
Cash, Cash Equivalents and Short-Term Investments71.92M255.49M296.22M255.61M254.60M61.09M
Total Debt924.87M71.92M72.08M76.60M53.91M424.90M
Total Liabilities1.03B139.34M149.09M145.45M82.27M460.17M
Stockholders Equity1.97B1.01B354.33M269.52M197.03M-344.61M
Cash Flow
Free Cash Flow85.17M69.06M78.98M50.25M-1.67M-10.29M
Operating Cash Flow91.94M74.32M84.60M58.01M3.36M-6.49M
Investing Cash Flow-986.26M-55.65M-95.06M-76.55M-5.03M-3.81M
Financing Cash Flow771.54M-61.67M-19.29M16.23M195.29M51.04M

Clearwater Analytics Holdings Technical Analysis

Technical Analysis Sentiment
Negative
Last Price19.04
Price Trends
50DMA
19.05
Negative
100DMA
20.39
Negative
200DMA
23.21
Negative
Market Momentum
MACD
-0.09
Negative
RSI
58.23
Neutral
STOCH
91.09
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWAN, the sentiment is Negative. The current price of 19.04 is above the 20-day moving average (MA) of 18.04, below the 50-day MA of 19.05, and below the 200-day MA of 23.21, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 58.23 is Neutral, neither overbought nor oversold. The STOCH value of 91.09 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CWAN.

Clearwater Analytics Holdings Risk Analysis

Clearwater Analytics Holdings disclosed 56 risk factors in its most recent earnings report. Clearwater Analytics Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Clearwater Analytics Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$5.54B12.0434.61%36.68%
66
Neutral
$5.60B-11.15%21.97%-69.32%
65
Neutral
$3.79B1,022.680.92%13.34%
64
Neutral
$3.34B41.485.22%-0.54%626.94%
63
Neutral
$3.13B-3.95%17.09%48.66%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
61
Neutral
$635.64M-32.50%14.79%27.52%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CWAN
Clearwater Analytics Holdings
19.00
-7.23
-27.56%
QTWO
Q2 Holdings
61.43
-21.58
-26.00%
SPT
Sprout Social
11.30
-15.75
-58.23%
GTM
ZoomInfo Technologies
10.94
0.59
5.70%
FROG
JFrog
47.70
18.34
62.47%
INTA
Intapp
39.40
-9.99
-20.23%

Clearwater Analytics Holdings Corporate Events

Stock BuybackBusiness Operations and Strategy
Clearwater Analytics Announces $100M Share Buyback Program
Positive
Sep 3, 2025

On September 3, 2025, Clearwater Analytics Holdings announced a $100 million share repurchase program for its Class A common stock, aimed at offsetting the dilutive impact of recent share issuances and reducing the public float. The program reflects the company’s commitment to deleveraging, with plans to reduce its debt-to-EBITDA ratio below 3.0 by December 2026, leveraging significant excess free cash flows for 2025 and 2026.

Executive/Board ChangesBusiness Operations and Strategy
Clearwater Analytics Expands Board with New Appointments
Positive
Aug 5, 2025

On July 31, 2025, Clearwater Analytics Holdings appointed Bas NieuweWeme to its Board of Directors, effective immediately, with a term expiring in 2028. NieuweWeme, who has extensive experience in asset management, will receive compensation in cash and restricted stock units. Additionally, on August 5, 2025, Clearwater announced the appointment of Dr. Mukesh Aghi and Bas NieuweWeme as new independent board members to accelerate international growth and innovation. Their expertise in asset management, M&A, and platform expansion is expected to enhance Clearwater’s global presence and platform capabilities, particularly in the Asia-Pacific and European markets.

Executive/Board ChangesShareholder Meetings
Clearwater Analytics Holds Annual Stockholders Meeting
Neutral
Jun 26, 2025

On June 23, 2025, Clearwater Analytics Holdings held its Annual Meeting of Stockholders, where stockholders voted on two proposals. The first proposal involved the election of three directors, Mukesh Aghi, Jacques Aigrain, and Lisa Jones, to serve until the 2028 Annual Meeting. The second proposal ratified KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

Business Operations and StrategyRegulatory Filings and Compliance
Clearwater Analytics Finalizes Share Conversion to Simplify Voting
Neutral
Jun 16, 2025

On June 12, 2025, Clearwater Analytics Holdings, Inc. completed the automatic conversion of all outstanding shares of Class C and Class D Common Stock into Class B and Class A Common Stock, respectively, following the sale of shares by investment funds associated with Welsh Carson Anderson & Stowe. This conversion eliminated super-voting shares, transitioning the company to a one-share, one-vote structure, which reflects its shareholder base as a broadly held public company. The conversion did not impact the economic interests of shareholders or the total number of outstanding shares, but it did reduce the number of authorized shares by retiring the converted shares.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 04, 2025