Clearwater Analytics Announces Fourth Quarter and Full Year 2021 Financial Results

Rhea-AI Summary

Clearwater Analytics (CWAN) reported strong financial results for Q4 and full year 2021. Q4 revenue reached $69.8 million, up 27.4% YoY, with annual revenue totaling $252.0 million, marking 24.0% growth. The company achieved $277.8 million in Annualized Recurring Revenue (ARR), up 26.3%. Despite a net income of $0.1 million in Q4, the full year ended with a loss of $8.1 million. Adjusted EBITDA also improved to $20.1 million for Q4. The company maintains a gross revenue retention rate of 98% for the last 12 quarters, continuing its growth trajectory.

Positive

• Q4 revenue increased to $69.8 million, a 27.4% YoY growth.
• 2021 annual revenue reached $252.0 million, up 24.0%.
• Annualized Recurring Revenue (ARR) grew to $277.8 million, a 26.3% increase.
• Adjusted EBITDA for Q4 was $20.1 million, significantly higher than the previous year.

Negative

• Net loss for the full year was $8.1 million, indicating ongoing financial challenges.
• Gross margin decreased to 71.1% from 74.3%, impacted by increased equity-based compensation.

BOISE, Idaho, March 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 and year ended December 31, 2021.

		Fourth Quarter 2021		Full Year 2021
Revenue		$69.8 million		$252.0 million
Year-over-Year Revenue Growth %		27.4%		24.0%
Annualized Recurring Revenue (ARR)1				$277.8 million
Year-over-Year ARR Growth %				26.3%
Net Income/(Loss)2		$0.1 million		$(8.1) million
Net Income/(Loss) Margin %		0.2%		(3.2%)
Adjusted EBITDA		$20.1 million		$72.7 million
Adjusted EBITDA Margin %		28.8%		28.8%

1ARR is a point in time metric, therefore fourth quarter 2021 and full year 2021 results are the same.

2Net loss in full year 2021 included a $10.3 million loss on debt extinguishment in third quarter 2021.

"Clearwater Analytics had an extremely strong quarter as we continue to enable our clients to grow faster. Clients are choosing our SaaS platform to provide them with the freedom to invest in new asset classes and geographies and to acquire new books of business, all without dramatically increasing operational expenses," said Sandeep Sahai, Chief Executive Officer, Clearwater Analytics. "We are pleased that our fourth quarter and full year 2021 results continue the consistent, reliable, and durable growth trend we have achieved over the last several years. We continue to expand into international markets, as evidenced by the signing of Athora, an acquisitive global insurance company. Of the more than 100 new clients added in 2021, nearly 45% left a legacy competitor, further demonstrating the differentiation of our single instance, multi-tenant cloud-native platform in the market."

Fourth Quarter 2021 Financial Results Summary

• Revenue: Total revenue for the fourth quarter of 2021 reached $69.8 million, an increase of 27.4%, from $54.8 million in the fourth quarter of 2020.
• Gross Profit: Gross profit for the fourth quarter of 2021 was $49.6 million compared with $40.7 million in the fourth quarter of 2020. Gross margin was 71.1%, versus 74.3% in the fourth quarter of 2020. Gross margin decreased primarily due to increased equity-based compensation expense related to equity grant activity and the increase in grant date fair value and modification of equity awards in connection with the Company's recent IPO. On an adjusted basis, the Company continues to maintain a strong stable gross margin. Non-GAAP gross profit for the fourth quarter of 2021 was $52.7 million, which equates to 75.5%, consistent with full year 2021 non-GAAP gross margin of 75.6%.
• Income/(Loss) from Operations: Income from operations for the fourth quarter of 2021 was $0.7 million compared with loss from operations of $61.5 million in the fourth quarter of 2020. Loss from operations in the fourth quarter of 2020 included $49.0 million of recapitalization compensation expenses and $9.1 million of accrued sales tax liability.
• Net Income/(Loss): Net income for the fourth quarter of 2021 was $0.1 million compared with net loss of $69.4 million in the fourth quarter of 2020. Non-GAAP net income for the fourth quarter of 2021 was $13.9 million compared with non-GAAP net loss of $1.1 million in the fourth quarter of 2020.
• Net Income/(Loss) Per Share and Non-GAAP Net Income/(Loss) Per Share attributable to Clearwater Analytics Holdings, Inc.: Net income per basic and diluted share was $0.00 in the fourth quarter of 2021. Non-GAAP net income per diluted share was $0.06 in the fourth quarter of 2021.
• Adjusted EBITDA: Adjusted EBITDA for the fourth quarter of 2021 was $20.1 million, compared with $6.7 million in the fourth quarter of 2020. Adjusted EBITDA margin for the fourth quarter of 2021 was 28.8% and includes a benefit of $2.0 million from the release of accrued sales tax liability. Excluding that impact, adjusted EBITDA margin would have been 25.9% in the fourth quarter of 2021.
• Cash: Cash and cash equivalents were $254.6 million as of December 31, 2021.

Fourth Quarter and Full Year 2021 Key Metrics Summary

• Annualized Recurring Revenue: As of December 31, 2021, annualized recurring revenue ("ARR") reached $277.8 million, an increase of 26.3% from $219.9 million as of December 31, 2020.
  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, 2021, the gross revenue retention rate was 98%. The Company has reported a gross revenue retention rate of 98% for twelve 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, 2021, the net revenue retention rate was 111%, which represents a 210 basis point improvement over 109% at December 31, 2020. The Company saw year-over-year increases in net retention in North America as well as internationally. Asset Management clients were a particular standout, showing notable increases throughout the year.
  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, 2021, the Company had 1,130 clients, and 59 clients that contributed at least $1 million in ARR, representing a 22.9% year-over-year increase.
• Assets Under Management (AUM): As of December 31, 2021, the platform processes and reports on $5.9 trillion assets daily.

Recent Business Highlights

• Significant client wins in North America included several large asset managers, insurers, and state, county, and city governments, including American Century Life Insurance, Carlisle Companies Inc, Circle, City and County of San Francisco, Highmark Health, Madison Re, Sprinklr, and many more.
• Extensive product enhancements most notably include the release of Clearwater Prism's external accounting book of record (ABOR) integration with a real estate property management solution and automated client data integration for historical performance which allows asset managers to maintain performance history. Other functionality released includes accounting and regulatory updates such as the release of Dutch GAAP, enriched asset class reporting, and upgraded user experience and reporting.
• Successfully onboarded well over 100 new clients during 2021, including Chimera Investment Corporation, Gilead Foundation, Global Atlantic, Fastly, Inc., and many more.

First Quarter and Full-Year 2022 Guidance

		First Quarter 2022		Full Year 2022
Revenue		~$70 million		$302 million to $304 million
Year-over-Year Growth %		~23%		~20%
Adjusted EBITDA		$17 million to $18 million		$80 million to $82 million
Equity-based compensation				~$66 million
Depreciation and Amortization				~$5 million
Interest expense				~$2 million
Non-GAAP effective tax rate				29%
Diluted 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 March 2, 2022, at 5:00 p.m. Eastern time to discuss fourth quarter and full year financial results for 2021, 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 Analytics 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 Analytics to deliver timely, validated investment data and analytics.

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, and non-GAAP diluted earnings per share.

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, and non-GAAP diluted earnings per share, 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 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 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 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, 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 Registration Statement on Form S-1, declared effective on September 23, 2021, in the Annual Report on Form 10-K for the year ended December 31, 2021 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 per share amounts, unaudited)
		December 31,
		2021				2020
Assets
Current assets:
Cash and cash equivalents		$	254,597			$	61,088
Accounts receivable, net			50,190				32,882
Prepaid expenses and other current assets			16,551				7,550
Total current assets			321,338				101,520
Property and equipment, net			10,738				8,849
Deferred contract costs, non-current			5,687				4,580
Debt issuance costs - line of credit			922				420
Other non-current assets			5,670				190
Total assets		$	344,355			$	115,559
Liabilities and Stockholders' Equity/ Members' Deficit
Current liabilities:
Accounts payable		$	1,416			$	1,340
Accrued expenses and other current liabilities			26,819				33,789
Notes payable, current portion			2,750				3,077
Total current liabilities			30,985				38,206
Notes payable, less current maturities and unamortized debt issuance costs			51,157				421,827
Other long-term liabilities			132				134
Total liabilities			82,274				460,167
Commitments and contingencies
Stockholders' Equity/ Members' Deficit
Members' deficit			—				(245,806)
Class A common stock, par value $0.001 per share; 1,500,000,000 shares authorized, 47,948,888 shares issued and outstanding			48				—
Class B common stock, par value $0.001 per share; 500,000,000 shares authorized, 11,151,110 shares issued and outstanding			11				—
Class C common stock, par value $0.001 per share; 500,000,000 shares authorized, 47,377,587 shares issued and outstanding			47				—
Class D common stock, par value $0.001 per share; 500,000,000 shares authorized, 130,083,755 shares issued and outstanding			130				—
Additional paid-in-capital			388,751				(98,860)
Accumulated other comprehensive income (loss)			(34)				58
Accumulated Deficit			(191,926)				—
Total stockholders' equity/ members' deficit attributable to Clearwater Analytics Holdings, Inc.			197,027				(344,608)
Noncontrolling interests			65,054				—
Total stockholders' equity/ members' deficit			262,081				(344,608)
Total liabilities and Stockholders' Equity/ Members' Deficit		$	344,355			$	115,559

 

Clearwater Analytics Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts, unaudited)
		Three Months Ended December 31,								Year Ended December 31,
		2021				2020				2021				2020
Revenue		$	69,762			$	54,758			$	252,022			$	203,222
Cost of revenue(2)			20,180				14,047				67,864				53,263
Gross profit			49,582				40,711				184,158				149,959
Operating expenses:
Research and development(2)			21,699				16,433				72,690				55,262
Sales and marketing(2)			12,914				8,982				39,065				22,243
General and administrative(2)			14,316				27,796				43,942				43,874
Recapitalization compensation expenses			—				48,998				—				48,998
Total operating expenses			48,929				102,209				155,697				170,377
Income (loss) from operations			653				(61,498)				28,461				(20,418)
Interest expense, net			421				7,430				25,682				22,854
Loss on debt extinguishment			—				—				10,303				—
Other (income) expense, net			147				(157)				83				56
Income (loss) before provision for income taxes			85				(68,771)				(7,607)				(43,328)
Provision for income tax expense (benefit)			(49)				593				487				902
Net income (loss)			134				(69,364)				(8,094)				(44,230)
Less: Net income (loss) attributable to noncontrolling interests			33				—				119				—
Net income (loss) attributable to Clearwater Analytics Holdings, Inc.		$	101			$	—			$	(8,213)			$	—
Net income (loss) per share attributable to Class A and Class D common stock(1):
Basic and diluted		$	0.00			NMF				$	(0.05)			NMF
Weighted average shares of Class A and Class D common stock outstanding:
Basic			177,695,551			NMF					177,680,507			NMF
Diluted			252,300,560			NMF					236,209,204			NMF
NMF - not meaningful
(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, 2021, which is the period following our initial public offering and related transactions.
(2) Amounts include equity-based compensation as follows:
Cost of revenue		$	2,614			$	946			$	4,786			$	1,669
Operating expenses:
Research and development			4,497				2,342				10,409				4,208
Sales and marketing			3,278				2,967				7,059				3,911
General and administrative			7,068				11,645				14,441				14,814
Total equity-based compensation expense		$	17,457			$	17,900			$	36,695			$	24,602

 

Clearwater Analytics Holdings, Inc.
Consolidated Statements of Cash Flows
(In thousands, unaudited)
		Three Months Ended December 31,								Year Ended December 31,
		2021				2020				2021				2020
OPERATING ACTIVITIES
Net income (loss)		$	134			$	(69,364)			$	(8,094)			$	(44,230)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			1,289				668				3,493				2,271
Equity-based compensation			17,457				17,900				36,695				24,602
Amortization of deferred contract acquisition costs			981				774				3,385				2,340
Amortization of debt issuance costs, included in interest expense			71				562				1,545				2,506
Debt extinguishment costs			—				—				10,303				—
Deferred tax benefit			(648)				—				(648)				—
Changes in operating assets and liabilities:
Accounts receivable, net			(1,191)				(1,656)				(17,308)				(6,325)
Prepaid expenses and other assets			(4,446)				(611)				(13,163)				(767)
Accounts payable			167				463				361				67
Accrued expenses and other liabilities			2,345				9,920				2,779				9,746
Deferred commissions			(2,238)				(2,191)				(5,161)				(4,092)
Accrued sales tax liability			(2,301)				9,102				(8,550)				9,102
Deferred revenue			801				366				18				(5)
Accrued interest on debt			(4)				1,470				(2,297)				(1,776)
Other long-term liabilities			—				76				—				75
Net cash provided by (used in) operating activities			12,417				(32,521)				3,358				(6,486)
INVESTING ACTIVITIES
Purchases of property and equipment			(1,526)				(661)				(5,025)				(3,806)
Net cash used in investing activities			(1,526)				(661)				(5,025)				(3,806)
FINANCING ACTIVITIES
Contributions from selling unitholders			—				48,998				—				48,998
Proceeds from issuance of common unit options			—				—				1,560				—
Proceeds from exercise of options			2,571				—				2,830				424
Minimum tax withholding paid on behalf of employees for net unit settlement			—				—				(2,185)				—
Dividend distributed to unitholders			—				(163,258)				—				(163,258)
Distributions to unitholders for taxes			—				(9,926)				—				(9,926)
Repurchase of common units			—				—				(626)				(567)
Repayments of borrowings			(688)				(770)				(434,919)				(21,557)
Payments of costs associated with early repayment of debt			—				—				(2,029)				—
Proceeds from borrowings			—				202,688				55,000				202,688
Payment of debt issuance costs			—				(5,761)				(1,400)				(5,761)
Proceeds from initial public offering, net of underwriting discounts			—				—				582,188				—
Payment of costs associated with offering			(3,281)				—				(5,131)				—
Net cash provided by (used in) financing activities			(1,398)				71,971				195,288				51,041
Effect of exchange rate changes on cash and cash equivalents			10				156				(112)				85
Net increase in cash and cash equivalents during the period			9,503				38,945				193,509				40,834
Cash and cash equivalents, beginning of period			245,094				22,143				61,088				20,254
Cash and cash equivalents, end of period		$	254,597			$	61,088			$	254,597			$	61,088
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest		$	266			$	5,402			$	26,113			$	22,182
Cash paid for income taxes		$	501			$	247			$	802			$	429
NON-CASH INVESTING AND FINANCING ACTIVITES
Purchase of property and equipment included in accounts payable and accrued expense		$	322			$	489			$	322			$	489
Tax distributions included in accrued expenses		$	169			$	—			$	169			$	—
Tax liability related to organizational transaction included in accrued expenses		$	793			$	—			$	793			$	—

 

Clearwater Analytics Holdings, Inc.
Reconciliation of Net Income to Adjusted EBITDA
(In thousands, unaudited)
		Three Months Ended December 31,
		2021								2020
Net income (loss)		$	134				0	%		$	(69,364)				(127)	%
Adjustments:
Interest expense, net			421				1	%			7,430				14	%
Depreciation and amortization			1,289				2	%			668				1	%
Equity-based compensation			17,457				25	%			17,900				33	%
Recapitalization compensation expenses			—				—				48,998				89	%
Other expenses(1)			763				1	%			1,116				2	%
Adjusted EBITDA			20,064				29	%			6,748				12	%
Revenue		$	69,762				100	%		$	54,758				100	%
		Year Ended December 31,
		2021								2020
Net loss		$	(8,094)				(3)	%		$	(44,230)				(22)	%
Adjustments:
Interest expense, net			25,682				10	%			22,854				11	%
Loss on debt extinguishment			10,303				4	%			—				—
Depreciation and amortization			3,493				1	%			2,271				1	%
Equity-based compensation			36,695				15	%			24,602				12	%
Recapitalization compensation expenses			—				—				48,998				24	%
Other expenses(1)			4,597				2	%			2,555				1	%
Adjusted EBITDA			72,676				29	%			57,050				28	%
Revenue		$	252,022				100	%		$	203,222				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.
		Three Months Ended December 31,								Year Ended December 31,
		2021				2020				2021				2020
Up-C structure expenses		$	—			$	—			$	1,660			$	—
Management fees and reimbursed expenses			665				680				2,367				1,597
Provision for income tax expense (benefit)			(49)				593				487				902
Miscellaneous			147				(157)				83				56
Total other expenses		$	763			$	1,116			$	4,597			$	2,555

 

Clearwater Analytics Holdings, Inc.
Reconciliation of Free Cash Flow
(In thousands, unaudited)
	Three Months Ended December 31,								Year Ended December 31,
	2021				2020				2021				2020
Net cash provided by (used in) operating activities	$	12,417			$	(32,521)			$	3,358			$	(6,486)
Less: Purchases of property and equipment		1,526				661				5,025				3,806
Free Cash Flow	$	10,891			$	(33,182)			$	(1,667)			$	(10,292)

 

Clearwater Analytics Holdings, Inc.
Reconciliation of Non-GAAP Information
(In thousands, except per share amounts, unaudited)
	Three Months Ended December 31,								Year Ended December 31,
	2021				2020				2021				2020
Revenue	$	69,762			$	54,758			$	252,022			$	203,222
Gross profit	$	49,582			$	40,711			$	184,158			$	149,959
Adjustments:
Equity-based compensation		2,614				946				4,786				1,669
Depreciation and amortization		473				296				1,701				1,070
Gross profit, non-GAAP	$	52,669			$	41,953			$	190,645			$	152,698
As a percentage of revenue, non-GAAP		75	%			77	%			76	%			75	%
Cost of Revenue	$	20,180			$	14,047			$	67,864			$	53,263
Adjustments:
Equity-based compensation		2,614				946				4,786				1,669
Depreciation and amortization		473				296				1,701				1,070
Cost of revenue, non-GAAP	$	17,093			$	12,805			$	61,377			$	50,524
As a percentage of revenue, non-GAAP		25	%			23	%			24	%			25	%
Research and development	$	21,699			$	16,433			$	72,690			$	55,262
Adjustments:
Equity-based compensation		4,497				2,342				10,409				4,208
Depreciation and amortization		693				190				1,337				761
Research and development, non-GAAP	$	16,509			$	13,901			$	60,944			$	50,293
As a percentage of revenue, non-GAAP		24	%			25	%			24	%			25	%
Sales and marketing	$	12,914			$	8,982			$	39,065			$	22,243
Adjustments:
Equity-based compensation		3,278				2,967				7,059				3,911
Depreciation and amortization		67				48				249				181
Sales and marketing, non-GAAP	$	9,569			$	5,967			$	31,757			$	18,151
As a percentage of revenue, non-GAAP		14	%			11	%			13	%			9	%
General and administrative	$	14,316			$	27,796			$	43,942			$	43,874
Adjustments:
Equity-based compensation		7,068				11,645				14,441				14,814
Depreciation and amortization		56				134				206				259
Management fees and reimbursed expenses		665				680				2,367				1,597
Up-C structure expenses		—				—				1,652				—
General and administrative, non-GAAP	$	6,527			$	15,337			$	25,276			$	27,204
As a percentage of revenue, non-GAAP		9	%			28	%			10	%			13	%
Income (loss) from operations	$	653			$	(61,498)			$	28,461			$	(20,418)
Adjustments:
Equity-based compensation		17,457				17,900				36,695				24,602
Depreciation and amortization		1,289				668				3,493				2,271
Management fees and reimbursed expenses		665				680				2,367				1,597
Up-C structure expenses		—				—				1,660				—
Recapitalization compensation expenses		—				48,998				—				48,998
Income (loss) from operations, non-GAAP	$	20,064			$	6,748			$	72,676			$	57,050
As a percentage of revenue, non-GAAP		29	%			12	%			29	%			28	%
Net income (loss)	$	134			$	(69,364)			$	(8,094)			$	(44,230)
Adjustments:
Equity-based compensation		17,457				17,900				36,695				24,602
Depreciation and amortization		1,289				668				3,493				2,271
Management fees and reimbursed expenses		665				680				2,367				1,597
Up-C structure expenses		—				—				1,660				—
Loss on extinguishment of debt		—				—				10,303				—
Recapitalization compensation expenses		—				48,998				—				48,998
Tax impacts of adjustments to net income (loss)(1)		(5,654)				—				(13,604)				—
Net income (loss), non-GAAP	$	13,891			$	(1,118)			$	32,820			$	33,238
As a percentage of revenue, non-GAAP		20	%			(2)	%			13	%			16	%
Net income (loss) per basic share(2) - basic, non-GAAP	$	0.08			NMF				$	0.18			NMF
Net income (loss) per basic share(2) - diluted, non-GAAP	$	0.06			NMF				$	0.13			NMF
Weighted-average common shares outstanding - basic		177,695,551			NMF					177,680,507			NMF
Weighted-average common shares outstanding - diluted		252,300,560			NMF					252,298,649			NMF
NMF - not meaningful

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

 

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SOURCE Clearwater Analytics

FAQ

What were Clearwater Analytics' Q4 2021 financial results?

In Q4 2021, Clearwater Analytics reported revenue of $69.8 million, an increase of 27.4% year-over-year.

What is Clearwater Analytics' Annualized Recurring Revenue (ARR) as of 2021?

As of December 31, 2021, Clearwater Analytics had an ARR of $277.8 million.

What was Clearwater Analytics' net income for the full year 2021?

Clearwater Analytics reported a net loss of $8.1 million for the full year 2021.

What is the guidance provided by Clearwater Analytics for full year 2022?

Clearwater Analytics expects full year 2022 revenue to be between $302 million and $304 million.

How many clients did Clearwater Analytics acquire in 2021?

Clearwater Analytics added over 100 new clients in 2021, with nearly 45% coming from legacy competitors.