Clearwater Analytics (CWAN) 7 Aug 222022 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Clearwater Analytics Second Quarter 2022 Financial Results Conference Call. [Operator Instructions] And now I would like to welcome Joon Park, Head of Investor Relations, to begin the conference.

Thank you, and welcome, everyone, to Clearwater Analytics Second Quarter 2022 Financial Results Conference Call.

Joining me on the call today are Sandeep Sahai, Chief Executive Officer; and Jim Cox, Chief Financial Officer. After their remarks, we will open the call to a question-and-answer session. Securities remind statements that the are provisions the to call, this Safe like of of forward-looking Act any made Private would all during participants conference Harbor XXXX. I Reform Litigation pursuant to statements. than Expressions to believe future performance of reflect and limitation, using expressions and for will, identify may, other without financial the including, which future terminology business historical items, can, expectations intended including expressions goals, forward-looking facts outlook, are similar expect something and

involve of Factors in those of conference law. that required events SEC. number statements The discussed no to in materially after our call, arise the company except may as including Forward-looking and uncertainties, statements. obligation differ revise a risks with any to may the section by Actual this statements or order reflect forward-looking undertakes forward-looking from update Risk results filings any

earnings in For cautionary statement more included refer the information, press release. to our please

A unless Sahai. discussed metrics we on all the noted. Sandeep Relations release to press the have our Lastly, be website. are posted that I'll to Executive our Chief this non-GAAP, found call that, turn earnings Investor Officer, in otherwise reconciliation With call over can

Thank welcome, everyone. you, Joon, and

balance company's wage history, significant highest a XX.X% had growth. we a in in the quarter provides and the sustained year-on-year solid X. $XX.X constitutes helped Gross the QX. seeing solid a in pressures Increased QX growth ever a $XX.X million We growth for efficiency, inflationary achievement. market. sequential are from the execute with was booking which us effectively robust and a the margin Booking foundation quarter, continue is to QX and Revenue to XX% in grew strong million which a was strong in

in which incur the public an associated generation I'm run free million XX% to very a increase achievement. not of million, in with in cash of which not This translates costs efficient did an a the The XXXX, also to were $XX.X we flow from cash quarter continue with is adjusted business solid to $XX.X one. a an QX quarter. a conversion EBITDA happy company and million margin. flow free delivered of XX% adjusted and We $XX.X is being of EBITDA

am As these reporting the they satisfied numbers with as of robust the are, our because I business. we inherent not don't are numbers strength reflect think I

For five mutually us. has the to our beneficial AUM-based revenue to years, our clients last model been and both

income classes. This seen of However, in across been in the asset QX fallen in and has have we now QX, The decrease have and our on of a price equities, in platform. value concert. structured assets fixed products all currencies securities,

event, model. pricing somewhat re-evaluate While this our it a is commercial us rare to construct led and

Clearwater and new for annual core the size clients, we the of commercial the fixed the For based terms the portfolio. fee clients' complexity on introduce have to modified platform

priority, Of models course, this also statements like a Prism, accomplishing is or construct new strategic enhanced functionality new as for and are fees assets grow, or commercial the Charging modules differentially as grown. and with clients change. that servicing, we add

the are we working our we significantly, change with to collaboratively and doing model As also what clients. with clients are importantly new to pricing current mirror

build we future. growth, our and NRR we the Client charged changes testimony bring to us in construct more expect our we These differentially and for volatility reduce takes clients to the can is this and solid the and have metric, predictable these built additive value we ARR the this a As our allow good effort, receptivity to been plan have to two functionality next and with additional we has components complete imagine, over revenue you changes quarters. commercial the significant to relationships our to advancements clients. will and to in have

best-in-class the with line Coming in us business. bring to of core strength pricing will leading the SaaS back of companies. practices it the together, Taken

for Our General Trustmark revenue best-in-class insurance, metric. of Limited, signing to Medical Management, clearly That Dara [ph] Knighthead quarter. million, and the grew ARR Whitman a acquisition Capital Center America, America straight XX% Modern Legal In a Secondary, University retention QX, Pittsburgh with year-over-year. is than XX% the to was by & XXth up name rate Clearwater like of strong $XXX.X was which few. was with organizations more gross new client

revenue tempered you net can down existing the led XXX% As our performance, portfolios AUM with coming value asset rate from of decrease our in to because of even decline was booking this in to the of clients. see, great retention growth the broad-based The XXX%.

changes We in to this expect coming implementing we're mitigate the volatility commercial the quarters.

based business Looking in on be have five strategy the discussed and Clearwater's we pillars model past. to the continue core ahead,

same The fully consistent while first grow durable it Clearwater growth. has is headline And do over not reflect successfully growth steady underlying years. number clip. the consistent pillar achieved the core to business several at continues the

across every used and broad in is resilience turn, industries have us clients new quarter. a geographies, sustain now platform and of several bookings Our adding allowing across greater to range in

is business to model second high-quality financial a and pillar expand. The designed that is

high recurring predictability provides stability and Our and gross to retention model our revenue business.

across investments allows Our approximately balanced make by our while continue generating reflects of product us wage our reasonable efficiency EBITDA to and flow. margin in This at to the business. to which continues world non-GAAP is free cash the gross fact increased margins XX%, be inflation that being

with Clearwater competitive technology platform Third, a disruptive moats. has deep SaaS-based

effect learn. With for network our efficiency new multi-tenant Clearwater. each continues greater platform single-instance Our clients client, for and driving both and increased to

In more live to platform. new the clients Clearwater to move went continue our legacy clients XX that We on win net alone, choose competitors. this quarter new from

enhance investment allows continue in sustained our us R&D platform. Our to to

we is market. determined serve our to most accounting powerful platform customers what with investment believe are We the the on

capabilities assets. growth. The data of for of fourth capabilities significant partnership solution truly and alternatives As expanded limited continued our reconciliation an reporting strategy for funds. multiple future private example innovation, our aggregation, next-generation new around provides pillar drivers with continued its for Clearwater This and automated validation, is

focused asset the and market billion in on and that that are public in are in based and markets while to sector, address are opportunity Asia. we continuing corporations business the execute insurer can to multinational announce added management, we Europe we $XX growing of we MSIG, Asia, our our core a We happy insurance,

no as in an the we with are of of quarter. of engage clients Clearwater concerted our set person to industry engagement are and building have employee marketplace with culture. That as last clients our platform The continues consecutive more is face-to-face difference. adjacent $X.X Award a that in-person in growing we of effort our and on of FTF be delivering the the in Additionally, including public our for future pillar a which recognized include embedded insights makes Best Provider Client Idaho. customers opportunities across and year. like News for leader, the markets our over pensions, many and system is and trillion of momentum retirement the solution is organization, final a to of accolades, the Year reporting recent with assets processed clients REITs why, from award which data made focus, fifth is for and prospects, Longer-term an world current Solution including DNA the client of IASA second platform. meeting than doubt There adding

grown people. deeply the year, around This over XX% workforce have continue we we care performance to hire globe. Speaking our of development proud of our the about and to we are by our as team, global

proud make very to investments Clearwater our of continue work. are in helped an to accomplishments that and rewarding We programs, Overall, in QX. we place people-related make engaging, exciting many

our Connect, Clearwater to leaders learning excited user the will educate ahead, XX connection and designed place Looking of headquarters September and customers to between our attendance at Idaho. immersive an we're our inspire host annual hundreds conference. XX Boise, taking Clearwater and Connect growth partners. our opportunities and and for in deliver experience financial in on in-person be Clearwater,

returning closing guidance and like call I quarter on second well Cox, Officer, provide thoughts, more updated our financial over to to performance year Before full details as a to our for Financial few our quarter hand third Jim the would XXXX. as Chief with now

revenue Thanks, fixed deliver QX, we thank XX% securities to us the In all in prices the of the million. today. these with to guidance win clients market new of successfully for range Sandeep, income you downturn achieved in proud are at because end during in and growth We $XX.X significant our higher and continued them. ability revenue on-board equities and coming our joining light both at results of

new the example, For on clients our platform. second went in quarter, live XX

strong XX% solid We EBITDA are million our cash $XX.X of adjusted our in flow and QX. of operating proud margin also

about basis, to financial details second our on unless a our that will discussed noted. Moving note results results. Please quarter non-GAAP or adjusted be otherwise now

June increase was over XX.X% impacted AUM again, XX, to new our our on portfolio and in June. X% The markets in XXX% prices a both we fixed NRR a to March on to XX. XXXX, XX, ARR, revenue, continued as reached in million, headwind and addition net $XXX.X a retention retention the discussed That headwind million primarily June security negatively revenue XX. represent of in increase or XXX%, revenue within annualized from As was acquisition. by $XX.X decreases is clients' in client which decline lower Net QX XXXX, evidenced recurring headwinds equity year-over-year, is ARR growth drop the income QX. due strong by an created June

beneficial past five both years, remarks, AUM his and to has our in said mutually us Sandeep the this As clients. been for pricing

experience after contract However, approach. well we are evolving limit half of year, to forward. our two exposure underway first There prongs terms new the our to in our going the are AUM

current For incremental new fixed variable their component for clients, a are any AUM we with providing fees for AUM.

existing a plus existing with their largest to fixed them clients, we our construct. modify incremental working fee For AUM to are contracts

discussions. our from early pleased results are We these with

came these revenue XX.X%. in net revenue be to presence we further consistent our quarter XX%. remained to Although profit $XX.X strong, establish margin the impacted even million, was and at retention gross changes, invest in international markets. retention Gross margin continues as by at Gross in gross was market

dollar new the investments. of continue dollar to marginally expanded have to Edinburgh in and lessened client we our growth, these we U.S. cost of the Noida, plan QX As strength invest. in the With

and year-over-year. XX.X% grew basis We over head we to QX of incremental remain Research As or our functionality team gross GAAP second international $X.X were the investments, third see a of of similar quarter offerings for members million in our and million increase $X.X successfully million to XX quarter. the enhancements revenue, to and an expenses from or by a with development at up XXX the managers. level in expenses Prism, and market Sales points count opportunity, reporting margin revenue, of quarter. speed we additional a the increase result, R&D were marketing will our people expect as in XX.X% these $XX alternative lot to asset quarter in

as QX our marketing of programs, in resulting roll incremental Connect in September. area impact this or conference were quarter XX in investment we out continue annualize and costs from as increased in-person September. basis Clearwater the up expect administrative We General IPO last $X.X including public company of XX.X% we points our year-over-year planned in expenses the revenue, to million

deductions receivable of of, have agreement because and by Code taxable income increased losses stock-based one, would would TRA compensation tax the expect I'll or quarter expenses we subject our expense similar TRA. the tax in you'll lieu are receivable expenses Up-C expense receivable $X.X and at Below we Absent be expectations level and expense to in operating deduction capitalization EBITDA remainder past ahead, on in administrative of R&D projecting be $X.X utilization year. the agreement XXXX tax my agreement, primarily when tax These EBITDA general overall see was later of structure million two, our Section deductions, of the revenue. expenses $XX.X Internal Revenue our GAAP in under the of the income million incurred to the expense. XXX Looking in the the QX. million less that tax quarter our and remain utilize touch we than expense stock-based for on would remarks. income Adjusted third incurred adjusted tax will statement, Absent a and compensation XX% we X. have in and in expenses or

So the these non-operating TRA is expenses by effectively $XXX,XXX. reducing

cash, Now included cash and Free for million. flow million of sheet cash XX%. short-term in $X.X let's investments, million, free resulting and million cash holdings turn $XX.X the quarter cash in to with also of the total We equivalents cash expenditures. $XX.X conversion debt, ended reflecting flow. in the and balance $XXX of net Free quarter approximately capital to flow EBITDA was flow second of million cash $XXX.X

Focusing on the of guidance quarter XXXX. for third

reflects the to asset million of be June. this quarter. This of decreases $XX.X to growth We expect assumes levels revenue AUM headwind to the and $XX range in guidance million as price from

be EBITDA million third roughly XXXX. the quarter range million, second in the to adjusted to with flat expect margin of quarter $XX.X of expected be EBITDA adjusted to the $XX to We

are now million, the which at representing expected lowering year in to the $XXX range For the to guidance, is full year XXXX, full XX% million midpoint. be we growth of year-over-year our revenue $XXX

We $XX unchanged. pricing for adjusted year million. dramatic the provided quarter. to for be in all impervious to asset range other the summarize, To our million throughout EBITDA measures we to our of decreases our quarter, second previously $XX expect the not and the remains price The guidance the AUM business model was in

four, successful to continue are them are closing working our AUM new is some the and further next-generation turn dramatic forward and to will continue extend strong resilience accounting; that, actively an displacement calls. Sandeep you With over the of on it pace; a thoughts. to to to business, and provide we mitigate the our However, updating business our invest One, clients resulting the solution true. for we at I'll position; make progress investment three, future we to we market-leading and we two, ever-increasing to from look caliber win decreases, remains to variability following on

Jim. you, Thank

heard solid our of incredibly the are we a had QX. we As you And proud grit just determination teams show. and to continue from Jim,

cash all and platform using operator we the the that, with over thank me deliver. clear interest your high-quality excited and room disruptive expand. to on-going confidence and let growth technology it our this in you We to are model Clearwater. to lead will we profitability commercial generation, With for changes believe with We turn for a steady about to driving Consistent, to what want questions.

question Peter Davidson. The Thank you. D.A. Heckmann from [Operator comes with instructions] first

open. is line Your

larger Jim, how in there tailwind? just and just alter clients, thanks How kind anticipate afternoon, a way existing term, wanted a on because Good changes fee? thinking both questions. was if you revenue recurring taking the then I the fixed expect do short you especially see that for periods, you subscription onto to more a of as maybe are in of we or about it that, should drags intermediate a most growth net was gentle the in bit the term clients a

This you. Sandeep. is Yes, Peter, thank

absolutely right. So

to the about in tailwind think been years, when I X% five general range. it think has you past a the X%

of complex it, impact we've Now in we over clients done and with two wave is, you being three waves, more And term three out why of the and and broke one the on and both wave longer between them felt six what and after saw for of the the is spoke the a first up many, we client going more better some three, just months, this with many many, larger and that give if being one completed. to new this construct what was we wave one, relationship their Obviously, our explained call the went all more of our negotiation, three been you sense will, of sections XX% and frankly, wave clients, are has into completed. are wave relationships. And you complicated progress, three wave and a somewhat, longer we XX% the smaller us. wave if the

finish to this expect quarters. exercise two next over the We

quarters, contracts two will clients. -- we over in in partnership frankly, with next So expectation is that our the realign these

helpful. very That's

it do or and in second to see like and it you the decision bookings number, didn't Just the with any see cycles slowdown some you all macroeconomic follow a of there. economic [Indiscernible]? record news Did uncertainties new quarter but procurements about global out sound uncertainty up with maybe of growth --

is work don't frankly, has geographies I numbers. think see are, changed had everything And business booking about what us our Peter, I -- Yes. earlier, hit our across to for many industries. and to many we now

the management in this businesses for in thought example, But then So asset the slower, half, quarter, first Europe the U.S. was definitely in right? we here better. was

balances to you good continue QX we what think if last in really was it a of think And see we QX, I and good compared pipeline. about saw year. So to it

We year. continue beginning I of are see have slower conversion. to the are we than the there some expected which think, pockets, would But in

Okay. you and just cut Sandeep, the if for my you need entire but the check On line, you see Otherwise, in answer, almost maybe out with repeat that. back operator can get to the queue. I'll

Operator, hear could you us?

Yes, I could loud all hear and clear. you

that we have of were had even quickly. In to -- need we we of our -- we slower in point beginning half was them has strong. works outstanding So years booking definitely could year, repeat Peter, What expected that industries going really I thought really, is in many just an of what right? And quarter changed that, so geographies, be first saying we on But of platform the last the many the with from and over booking Europe continues that that don't I view, really frankly, goals. mean, our our think the all to different what's was business do QX year. the different two I meet was pipeline a we our than in to is

are We conversion. become and continue But yes, up sort a little little Europe the see hasten a expect faster. to great We overall, so bit in do booking good numbers QX. of to

the demand environment to And continues be strong.

Thank you.

Please Michael from comes with proceed Wells question next Fargo. Turrin Our

here. on based those the I Hi, of about to question. a renewal all? model? line of back the How and AUM. I some call you model. just on think pieces or change pricing monthly, cycle is contracting of question guys revising for renewal the it have the Will I we'll the know contract at guess, can have duration This time going the Berg I Michael Michael Turrin thanks for quick pricing the

Yes.

Sandeep. question. you is clients, all. thank our this say for sometimes has when to go not the we to approach changed do I at So want larger Michael, Michael, But that that want will and a do it. meaningfully a of are sometimes And longer longer-term we getting will cases, in they contract. multiyear contract, term, Obviously, right? mission-critical are they they desirous those

what We're I don't think, talk think model, have And So I be and every more we we new around philosophically, approach I it. practice. that. is seen We are of do to just our a as best think different. clients trying have gone have this But we obviously to about to has fixed we continuing responsive price changed. again, changed do just But anything to more that. year. think I fee normal increases want And wanting after do and not down

to we Got sense. One and the piece are the about variable it. guys it first like be model? majority, Is least going pricing think all will we of done forward can sounds variable like mix AUM That makes as customers be versus in the follow-up. this of go to meaningful will fixed fixed. converting become it grows, -- by vast the quick you But the at new time plenty the ever? How time your

Yes.

So or for number a with you, growth sentiment. every modules the yes, We of our become vast fixed new revenue have because servicing. changes exactly but new this majority We will is or year don't Sandeep. AUM of a think

based to it that? expect add anything to things AUM much So less quarterly yes, of that ilk. on want Jim, and to we you do be movements volatile

Yes.

about new obviously, kind a tailwind about sort all To think to is to increase normal flow go And was our going thinking think clients. an about discussions, way shared think I through. longer of clients metrics -- to because and on And Obviously, going kind be we setting Sandeep the it then takes at expansion. price existing revenue. and forward. we the would we about look it's that there some from XXX% I of talk AUM into forward that's is think that that annual these structure Pete's question of have as it headwind

on historical that it's AUM. think on we a So mutual

much. Thank very it. it, Got you got

Thank you.

next The comes you. with Thank Brian Schwartz question Oppenheimer. from

is open. line Your

between to this questions more XQ the on asset management provide my saw follow-up color insurance, taking the afternoon. on it possible One the have the the Is for you thanks I corporate, hi that bookings. two. in Yes, performance segment quarter? the record

Sure.

first a But the second distinguished. asset And was the of in management in seeing kind so as we're main well. insurance nice mix think I was quarter, particularly -- segments. particularly those the across quarter, the distinguished two segment

add I if Brian, And here. could

spoke see So we large we as little spoke earlier, did you bit significant name. which some a about,

wins, isn't it smaller we're win. So No, which like certain clients or like significant something a that. just winning we've was had

did so We win wins. have really high-quality -- we

We we to cycle a out a which won this us there. early in MSIG our are bit winning surprise little in also that continues Asia,

So strong, obviously, I think it had. was insurance we was like

you invoice Jim, I how And the then invoicing annual question the share change pricing model. revised revised to Thank you're you're one had on now contracts? you. the go to model. follow-up the that going does in planning Can to

the of clients So we where that same I think general, annual invoicing had. sticking for small think in with in we're we've you monthly, should very except pivot But it advance. as to would model the

you. Thank

comes question next Rishi Jaluria The with Please RBC. proceed. you. Thank from

think me. RBC. questions. Thanks is hi, I you. Rishi that’s for for Jaluria my Two from taking Oh This

customers you've that, we maybe that what initial First, I about think looked changes like to that go in had your AUM sure alongside discussing. XX% talked number up want conversations customers, you've in I'm the XXXX. early growth has model as as generally like? existing with well maybe historical been to new was feedback that it you're what one, pricing as back guess, with I the rate, to nearly when And

from new it's if in obviously then return versus net the just side, got coming last assets? the year-over-year down the on think we has how Now follow-up. growth assets a that And in XX% number, typically, about AUM it's on XX% about But the much year. relative been of I've to other

clients, clients majority to the on. right? the the talked that historically management AUM flows That's expansion The and that vast asset about net the growth new majority. into adding new X%. new X% being of that We've of our those is assets are vast tailwind And Yes. XX% clients assets as bringing fund as well

Got it.

That's feedback And Okay. just helpful. terms in question. of

Yes.

to So is we I that you and walk really, clients, we've these that get institutions to a very new tomorrow. largest want isn't go Obviously, want that let's more resistance clients, imagine. you contract work that. to for had this clients the to little as back don't redo out, when the that you current say have rolled can that, And It you as -- into the just large new that's longer you doesn't and conversation. it and a say, like have contract can

So we -- think been have want next out a it. the this this is over quarters. and I laid why done two sense, I we'll that's very But makes clients get how it's would It plan also where right? do think cooperative.

we to to And at don't get in want time. the everything make does I take so take I faced it that two. you next all, haven't But month No, done would say. time. going does is it think resistance or

philosophically, at shade little If out follow-up. And options how a right, look it Edinburgh at quick especially you're Thank revenue -- how given the stock as in of lot does should as feel expansion a to are don't little your SBC, thinking and recent a seem high who Okay. be and comp and then Area. Noida us Bay talking it understand like of maybe and stock have for in hard does you're we you they hungry have thinking normalize a dilution helpful. over are about overseas Great. Maybe in just about comp the can you about but you. RSUs quite high given a you IPO, I Boise time? over dilution That's employees people help and XX% or where

Thanks. Sure, sure.

impacted modifications just think remind work public. the going did was somewhat with in you, and comp the I conjunction we to stock by So

through working kind of we're bit So of that little a bump.

in we percentage to future, our middle with that But down that, peers. at what look little compensation as number consistent of I our we over in plus XX% we And that the said when is bit think our taper we've said over at. your our Having very compensation the and we you're in peers, as going peers, I group higher, spend we right, on goal business depending dilution a so a scales peer time, see our time. down. think of past and revenue this stock-based with time consultant consistent look are SBC obviously at with that as the data And looking naturally perhaps would that, the

that's think that we out anything to aren't do to I point tend important do strange.

and And -- continue as that said, that, IPO things you we approach. revenue natural Jim We all have of down peer But which compensation these and to profitability set which and like number, it grows. up and size, the whole come a at with similar expect from try similar our be that past somewhat is that is we get we looks medium trend a group, -- and onetime should the to group, as committee think fair.

helpful Really guys. right. All

Thank you.

Mielczarek from The Blair. you. comes with Thank question next Kamil William

is Your line open.

for my you thank questions. taking Hey

and your model, we should So ASPs retention another potential maybe to especially provide are the see existing we've inflation customers effective you're three seen, one that on do the average more transition prior relatively paying have change? the Or leverage. pricing. to you as recent this growth high maybe raise flat customer model? incentivizing given you some spend to relative And new the to make you detail on may Can how wave more the the

ability it's good doesn't Yes. for Thank not is. in exactly we the rate we conversation blunt, us. and R&D. our invest the at things from it's It's perhaps be clients point just down It's It helpful our not you, with clients. could that's inflation the go while there good a in ability job if it I if better anyone view. this. know done Kamil. explaining And do the very is in to have have of to to good any our good Look, do just operating helpful for should I continues fees an

up. So trend continues them It's not business. it costs can't happen say, January, And that, the our fees look, go is was whatever and what to down we in go for that was. good to and

we we clients I So have I have it leverage, more think think of don't three wave equal think leverage. as --

to provide trying high are We service. quality do clients for and thing the a our high-quality business, right

got And to in tell you that I've clients so very it. and have been partnership-oriented

to I mean, starting in think down. a there of that my I are fees way. decline one no also technology budgeted said, budgeted for obviously, I the year can going and were if it go

So there's I to say make also this would work. that room

work that's a conversation provide. And And We a to we how approach with exactly of it. trying view about, it. sense, the Kamil? that we so the nature and as it hey, want do -- not we make we It increase, price number, up and come we it's that's which view to of how have. isn't indicative is Does

expansion Yes. flow. appreciate you term? the follow we could all I uptick color catalysts That's primarily scale? the very How in should if And I on we are think for free Is coming that in about the on other the driven here. watch free that quarter. longer just there to It's cash the up years? out put margin flow the Or should helpful. pace nice of cash see just by

targeting QX. XX% that way than cash of cash went that. was about Obviously, free there were transactions and flow. I of with year is, the through our back when that public we about of it various lot much to free look flow our we think historically, kind we numbers noise EBITDA in converting we're think in year is went higher a the you throughout The on

seasonal of But to continue as we'll ebbs think the the monitor quarters and so you And flows certain about year. four throughout that.

I think, targeting that.

think growth? free growth, do then that. about the you cash our about, how our margin think okay, revenue And what's EBITDA of we flow conversion so as And what's

Thank Okay, guys. helpful. it’s you

Faucette Thank question comes you. from James The Morgan Stanley. with next

open. Your is line

very natural have growth seems change you should was long-term algorithm we to you get ability that's of the this much. etcetera, that from thank if it the for Hey that historically the receptivity, I your But focus to think I to the the the and to want And about AUM like pricing. accretion go understandable. on impacting kind thanks compromised X% tailwind been a X% lot gotten. don't, you questions. back how of to has customer And know adjustments

we James. Jim, you like But that for -- thank Yes, don't that, think question.

So what is saying if the for it, there's fee logic fixed walk through current a you are of portfolio. just the we

exactly As not in proportion, grow grows, but ability that. with will up, some go your portfolio right, somewhat, the to fees in

Second we're thinking separately to about fees the modules is charge not thing for.

We will for that. charge to be able

So on clients that if module, you it. differentially for resistance pay is the again, no leg that. us you you to this should And there's want say use second of

we see So that.

or X%, used okay, down thing a with it by be there rates of going past, you inflation reasonably fixed you is. look, I a think X% and number AUM, when bit came that inflation increase up fee, you the which that consistent like be to recall and fixed there's I'll have say, or your The was third defensive when price every right? we I a should X% And and X%, is will to because we're X% to little whatever don't easy of that is, increase said, see in But going year, it's fee, that. if to have some resistance. number with about a and you

what I quarter. or our get of any of better but up So I investors much will quarter, this will what frankly, you question any hey, secondly, get going you to getting will down this is is I tailwind, similar stop question. asked Every X go this the -- predictability, very meet is, think And one. this you X time

last I And the of X% a some that. by exercise. the a past X% We feel this portion that to quarter, talked and cover which -- was point significant about hope this the that. get Jim that in decline January, from is decline quarter literally before we make downdraft So I'll

think the as about a Understood. real changes A I'm Prism couple to that wondering, and And a guess we have you how guess then these to on as where price XXX% historical metric? of the question I And NRRs. like especially floor business. measure XXX%, the is fit uplift? between how lot last contribution dynamics customer But metric I on way into forecast come of down to obviously, over we relative those us the kind that? the of quickly rely think of pricing can do And and levels the how price given engagement And is to should the quarters. return

Yes.

James. question, great So

obviously not XXX%, happy things about we were be think within that are there happy with But I So number. to that number.

That same-store entirety there. XXX%. make AUM from at QX from that the the really change XXX% that it's all, look really was was changes -- is up right? That X% to just change headwind existing of of up means the QX First growing, clients AUM sales with down X%, of those this And components you year-over-year. to when

-- all churn, obviously, line. metric. All -- about a is of Where of all our of go? think kind was this sales right, you of our think it very annualizing, could our much upsells, that in net when I it all of same-store our upsells,

September were you of of June up when the September September XXXX, So year. XXXX XX, of annualize from look to XX markets in to kind last

changes. up we the So in from markets will these next you the commercial a headwind at obviously we're that look think this positive math, natural construct just that be quarter. see that that hopeful But to half there's if I impact and

But James, add, just can is Sandeep. if this I

on expect you business what example, is should and competitively. we our we and are this of correctly, lot think I exactly with I'm discussing, for But finished that of -- be -- once which what want And the exercise, and are don't a spend winning we -- not core NRR. correctly, we this discussed be time strength you say, about we'll that said, then markets, down. to need not I be a year, that will feel will much able number. this get by And it right? can somewhat the impacted we end for was directionally because to quarter they Jim as done and the example, And stabler by churn talk the then of be we

So churn was better.

We faster. on clients boarding are

business decline decline, And has so really correctly, well. is the the we about true. done are hey, when And talking itself, business X% and which you X% but think about, the

of are ability what it. the with for energies of all with is doing exercise business. our the not I'm hoping to faulting we this But will So focus changing on work right provide how our the us things clients commercially we

gentlemen. you Thank color. great That's

Thank you.

The with proceed. from next Goldman comes Please Borges Gabriela you. question Thank Sachs.

question. thanks on in Where about ask to wanted concept ROI this implementing Clearwater from is I to significant get a for my of value. Clearwater. taking we guys, time the there being Hi feedback

love you How to for you, shorten I'd do to so sales your value in cycles Sandeep. the cycles incremental you ask your Are are trend? time to And implementation How any seeing there are customers? you can control things trend? seeing

it. but months. that's do things long Obviously, it to in take we biggest business, short of investment appreciate how that think X I Gabriela. you, on and think Thank we as four Clearwater. I the the does it is sell depends is sometimes recover it

feel we if lot is cycle. ROI that often. does cycles. you we a a RFP the haven't us instigating that are is imagine. the not very change investment, is But as X-month we return the it's you in So think I It of make really seen an like isn't It sales on do -- can that driven, RFPs

half definitely U.S. first outperformed I very on a in what sales a did bit. We at we seen of the that. we year. outperformed point States I of in least haven't elongated Asia change in the we think, the did because would, saw still well in Europe, cycles looking the sort United did we little out, So thought

at think level, a we don't see that. I broad So

in improved that One a of when number of you accounting definitely And obviously environment. compete competitive of the market the intricacies and at point found doing I would the We doing think for about point out this the accounting, difficulty I softening think level, of has competitively, we little with have the vendors. a us. is

we're about something frankly, of and that's sort looking happy push. So to

of bit Jim. little of is And helpful. That's pockets the A follow-up for color slowdown. on the

a your to as in second the harder love some little little hear, analyst, of transition? in a feels relates to transition and particularly the Would an half, derisking business, of these a cadence at of the of any is change there work pricing guidance predict term. as bit through going the pipeline You're near least orders maybe approach pricing in around it factors the to

thanks, -- So what think I Gabriela. I

would on-board made we've none on. good be we that change second period. levels as we We we pipelines -- of We that of our look I good. June as think team's say and we we be had obviously have to about that would X throughout bullish half the that. the very AUM down took I to about as evaluated baseline, a the That had as feel feel those which continue that -- a aspects changed. ability guidance, come

improved. add I that just Gabriela, definitely the taken of amount on boarding would Yes. time time, has the

bill So really metric, we doing well. not is track and book BNB which that's something metric, called a

only So I and think think I through offices as people into isn't have everything that definitely back has come improved. Zoom,

the except isn't continues that's again, doing. you do you So business, can are much to think, core contracts. well. do decline I know, really And the as about so to And change we AUM what

spend where it market this. and stop. taking even that's it We it energy let's the about We not have we down and we but matters. something, nothing it up out doing doing by of And go it. is had contracts. though being to X%, affected and enough And is The X% watching waiting taking and that said;

our do well make to Let's go and changes, that. and talk to our the we way clients on are

the Thank you for color.

Noah comes from question Herman JPMorgan. next The you. Thank with

is Your line open.

thanks environment Appreciate and near should maybe the the and of also a for pricing both elaborate Thanks. think on it. how bookings, question. or Can taking revenue [indiscernible] what long the we term, so bit Hi, the seasonality given you term little model? in about

Sure.

I broke everyone think for little repeat to the else. bit for just not just up maybe question; you a us,

timing Booking bookings and want that. environment, tendency the the take the that better about really you a with that? Obviously, to kind with high And continue think would see such revenue, That's and the business start through. then revenue, me cadence incrementally the we seasonality quick. expect about we relative accelerate year. of continue throughout I natural think asking revenue let recurring of I do feel competitive to of around flowing just has end to seasonality. of see the kind bookings has of we to to a

define goes with would and to feel you the data helps what right, want often, you of like. trying the I Well, that. you're to speed technologies the they the see up, price get owning portfolios sometimes more legacy because because volatility sometimes get clients us, can't But

I feel excited have those them platform, away and if legacy on mean general, look and high to respond. really our do technologies look to secondary from at at I ability a So if legal you welcome you to move

And does think do don't I us. the compared exception QX vastly so seen or you years. of with QX it Europe, pointed I which But different out. I in help past anything think to whether think we've

demand We over the XXX had about talk of a Europe, in to environment. clients attending. kind had right, interestingly, we But client event where

Europe things more complicated of interest, relative and there's competitive product So differentiated But tailwind little are a is in the our there. now. right abilities. Obviously, demand there

right. is think I Jim

is pipeline, I for think the really especially Europe right really, HX. now for good

bit So a yes, it I just of timing a think is that thing. just --

Great. Thank so you much.

Thank you Noah.

Thank you.

Capital. question with next Loop comes Kim from Our Yun

us introduce the revenue Thank the remains $X get could perspective? more range your you. the you but that flow from uncertainty for theoretically, really Does fairly additional pricing a line, on change questions top regarding Just business top near-term pricing there is bit predictable top model guidance about suggests line because a only imply your a you change insights into if that obviously, can million trying Jim, didn't little year. expand guidance, could how specifically pricing and your line obviously, otherwise. It Thanks. to the give of change your the variability were of lot understand to lot guidance be to the to able range. model you if

Yes.

focus are our is and we continue a think predictable, I it. the revenue in confidence on durable to strong core business, guidance I model variability obviously, we and obviously, pricing drivers. think minimize -- our that introducing And within really to feel this change those very underlying reflects our this

a we I and If X% second and in want for think how don't Look, completely don't But I new. I except they we it saying, here. change that just work see can like add the movement, are doing is today. going the question what trying not we're is, expectation, there. done? Sandeep We're X% for that that to clients contract to still something to think we're better right? contracts so quickly and can current that talk half. revenue and is is, It's about let's our it. get going the The And "Hey, here but the it's change

uncertainty. think an introduces I don't So it

think we're trying I a don't they and do it for right? think in on changes what basis what changes how our is basis. reduce to day-to-day platform But use we do them that, I volatility. a on day-to-day Nothing

topic the a And helps just from changing change. lot. away That pricing Okay. quickly then the model

in If customer you there. acquisitions making Sandeep can to on about in Europe talk you're new regard progress the

lengthen making talk You about of region? the did business same cycle investment that year. kind any sales the time, the into Can in things said the first were levels you of that good, the just to but half the change And at in you're overall Europe?

you Thank Yes. again.

infrastructure. as So know, you have we a full up set Europe, in

just sell just -- isn't So in this let's Europe.

a have and out We Edinburgh. strong really in team Scotland

in out London. team a have We

France, Germany. We Frankfurt, Paris, and in have in team out in

also have there, marketing full effort We product there. effort management a

XXX with. things right which And think became become third, did I think do spoke did fifth -- clients the everyone we into sales just I up cycles understand effort things of we year, of of there, showed want of sort first last elongated. well Europe Europe. I it. fourth, happened year. a this do the speak I do a do sort So was think now, But two in for that to But is month this as Jim really half concerted client event literally

And really really, the So I now as pipeline and right think have But the interest is Europe was strong. so, the yes, was -- we that, really really of a result in high. it was. engagement high,

that how little it. think about that But don't slowed I time. that's changed in think so a we down proposition. anything think And at I it just the do bit

Okay, great. Thank you so much.

remarks. closing back you. the will I pass now it any team management Thank to for

say you Clearwater. Yes, continued for confidence I your to just in all wanted thank

us. Thank are I much. appreciate attention something and building we think to very we you your special

Thanks.

Conference Earnings Quarter you Second Analytics participation. Call. your Clearwater the concludes Thank This for

your You may disconnect now line.