On July 31, 2024, Clearwater Analytics Holdings Inc (CWAN, Financial) released its 8-K filing for the second quarter of 2024, showcasing impressive financial performance. Clearwater Analytics Holdings Inc provides a SaaS solution for automated investment data aggregation, reconciliation, accounting, and reporting services to insurers, investment managers, corporations, institutional investors, and government entities. The company earns revenue primarily from providing access to its SaaS platform, along with services supporting its implementation, software licenses, maintenance, support, and professional services.
Performance Overview
Clearwater Analytics Holdings Inc (CWAN, Financial) reported total revenue of $106.8 million for Q2 2024, surpassing the analyst estimate of $105.52 million and marking a 19% year-over-year increase from $89.9 million in Q2 2023. The company also reported a net income of $0.3 million, a significant improvement from the net loss of $11.9 million in the same period last year. Adjusted EBITDA rose by 35% year-over-year to $33.4 million.
Key Financial Achievements
Clearwater Analytics Holdings Inc (CWAN, Financial) achieved a gross profit of $76.9 million, reflecting a GAAP gross margin of 72%, up from 70% in Q2 2023. Non-GAAP gross profit was $82.7 million, with a non-GAAP gross margin of 77.5%. The company's operating cash flows surged by 108% year-over-year to $43.9 million, while free cash flows increased by 117% to $42.4 million.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $106.8 million | $89.9 million |
| Gross Profit | $76.9 million | $62.9 million |
| Net Income/(Loss) | $0.3 million | $(11.9) million |
| Adjusted EBITDA | $33.4 million | $24.8 million |
Balance Sheet and Cash Flow Highlights
As of June 30, 2024, Clearwater Analytics Holdings Inc (CWAN, Financial) reported cash, cash equivalents, and investments totaling $297.6 million. The company's total debt, net of debt issuance cost, stood at $47.9 million. The significant increase in operating and free cash flows was attributed to stronger income and positive working capital changes from better collections during the quarter.
Key Metrics and Business Highlights
Clearwater Analytics Holdings Inc (CWAN, Financial) reported an annualized recurring revenue (ARR) of $427.2 million, up 22% year-over-year. The gross revenue retention rate remained strong at 99%, while the net revenue retention rate was 110%. The company also completed the acquisition of an advanced analytics platform from Wilshire Advisors, extending its capabilities in risk and performance.
"We had a very strong quarter where ARR grew 22% year on year, revenue grew 19% and adjusted EBITDA grew 35%. Gross revenue retention was 99% for a second successive quarter, which is a strong reflection of the value our platform provides to our customers," said Sandeep Sahai, CEO at Clearwater Analytics.
Analysis and Future Outlook
Clearwater Analytics Holdings Inc (CWAN, Financial) continues to demonstrate robust financial health and growth potential. The company's ability to exceed revenue estimates and achieve significant improvements in profitability and cash flows underscores its strong market position and operational efficiency. The high gross and net revenue retention rates indicate strong customer satisfaction and loyalty, which are crucial for sustained growth in the SaaS industry.
Clearwater Analytics Holdings Inc (CWAN, Financial) remains well-positioned to capitalize on emerging opportunities in the investment management and analytics space, driven by its innovative solutions and strategic acquisitions. The company's focus on enhancing its product offerings and expanding its customer base will likely contribute to continued revenue growth and profitability in the coming quarters.
Explore the complete 8-K earnings release (here) from Clearwater Analytics Holdings Inc for further details.
