Clearwater Analytics (CWAN) 6 Nov 242024 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Clearwater Analytics Third Quarter 2024 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 Third Quarter 2024 Financial Results Conference Call.

Joining me on the call today, as usual, are Sandeep Sahai, Chief Executive Officer; and Jim Cox, Chief Financial Officer.

In addition, Subi Sethi, our Chief Client Officer, will also join the call introducing herself to investors. 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 facts, and Expressions other terminology relation business intended of expect may, are performance similar will, outlook, in limitation, than without believe product to items, and can, future including, forward-looking and expressions financial expressions identify including something statements. intentions and goals, historical which expectations, reflect future using to and the

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

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

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

you, I'm that Thank quarter company. pleased QX report XXXX to outstanding Joon. our was a for truly

rewarding these on increase. solid deliver $XXX.X progress on, initiatives very year-on-year a was we've it's growth the XX.X% make the to continue We results. to million, Revenue quarter working and financial for been

by XX.X% recurring year-on-year grew to Our annualized million. revenue, ARR, $XXX.X

we measure quarter. the acquisition are really is its these impact growth of so you'll Since asset this sure numbers. I'm agree, As separately the Wilshire can new, strong

gross The of retention. ARR the revenue is excluding backbone best-in-class our Wilshire year-over-year. ARR, So our growth the story of XX% grew impact

extraordinary. That XX XX% higher, XX we revenue for retention. recorded has the or a have For out gross XX% X and quarters, last of is the GRR been our the quarters, last

Next period ARR the XXXX. long provided upside and sustained a tailwind is After it to real in growth. growth, into expansion a AUM gentle where turned from AUM a headwind

may ensuring upside You our restructuring while shared a very to extensive worked client limit that in downside we quarter the on that did our this very recall rewarding we provide of hard clients. our tailwind and It effort the contracts. fruit the see growth. our with to to bear gentle is in We work

our continue Increasingly, owner to asset the engine serve. New important in both each logos though, have that international markets levers of markets I'm for growth. booking as to support we report very and growth, asset been in of Head Sales new we long Head encouraged Partnerships growth Jose and Choser growth, we continued as management to significant sustained and emerging of see see strategic pipeline. To Belgium markets be to as we Delivery the EMEA; Sales and expansion and continue talent a as we for for insurance Global our been Head [indiscernible] leadership of France, in Europe Adrian X to the have exceptional Alliances Ireland; and with and They as in include Asia, of add in hires. Amina Pavone U.K. Luxembourg; very Alesandro EMEA. ranks Sales American an North of runway driver and for the and Head see The fortunate and

office that the region. new commitment is our within in Kong, of lever Hong current next our to We also client growth. further Selling opened reinforcing base a big

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breakfast, and We creating closing in finance thoughts. our and a our winners award also community. And celebrated our launched space for in connection some excellence inaugural women empowerment networking now

financial As note steadfast. landscape, we on excellence continue Clearwater remains to navigate focus a changing please operational

are together. opportunities here to support and We growth confidently the tackle client challenges and ahead

financial Now I'll hand Thank the your call over to Jim to dive you deeper into time. results. our for

we call, terminate all providing sharing then receivable guidance we time the quickly to thank like my QX you I'd and provide Welcome agreement. to QX results, leadership the behalf discuss shareholders or our spend Subi. our perspective on majority in delivering be will results. the on proposal to these tremendous Thanks, shareholders our our and of tax the what TRA agreement of call of your to for

the continue outstanding were results first the and XXXX. quarter impressive to from third Our half momentum of build upon

board across record multiple generated million the with in QX, initiatives. The efficacy were guidance guidance revenue for of results We our the in increase This strong equivalent of million growth QX. performance QX. flow of and from metrics revenue guidance midpoint strong EBITDA year's underscore profitable in cash $X.X in highs. an our comfortably EBITDA key high part our the These the million QX Clearwater's and of exceptional XX.X% record $XX.X economics of over outperformed an adjusted and last a quarter. represents driving free EBITDA with over the beat $X.X Our beat

reward sales helped QX in in outstanding addition in in and days continued days accomplishment net meaningful represents investments increased million us. net XXX in and surprised to frankly, last a is the the approximately also revenue flow, X we as XXX a XX was recorded or cash quarter quarter. in our to strategic assets capital resulting decreased puts additional $XXX.X net revenue ended investments, $XXX cash, last of the $XX.X retention from this and debt cash of contribution This shareholders. We make quarter. in points This EBITDA, We million. reflection cash XX of working monumental progress as with cash onboarding retention increase and changes position to prime total our QX the free XXX NRR our equivalents year. strong our to approximately million, is of our growing strong notable the This increase related holdings products thereby In clients generation from to cross-selling of new to clients. a existing It days positive rate us to with

we from June to in AUM rate approximately September Additionally, on believe the in incremental we observed cut the Fed over had X% gentle led in of increase rate an platform quarter. environment interest tailwind the the the

net investors level Finally, GAAP of income on in $X.X achieving driven to X was throughout was heard net first expense. We months year-over-year GAAP GAAP we part compensation it profitability the as important, a million a achieve of achieved and income of from million by that GAAP both of $X.X XXXX. basis income well solid equity-based as rewarding QX versus lower the non-GAAP equity GAAP in that XXXX. compensation is net in so basis The QX loss

improved full to year-over-year we our our in again revenue third in outperformance year the $XXX.X view million, have incorporating raised revenue both rate year guidance XXXX, the this QX. growth approximately on XX%, and the representing For guidance quarter of an full

a at assume This fourth growth market-based approximately expect not quarter AUM incremental fourth least representing the expansion we be rate XXXX, of in XX%. quarter. revenue any does to For guidance the $XXX.X year-over-year million,

to guidance in increase and full adjusted $X.X EBITDA a approximately EBITDA increase adjusted prior guidance. $XXX.X raised of also have we for XX% powerful XXXX, margin our from EBITDA year year year-over-year. provides XX% million the million, full of This the an For

proxy fourth of, expect For tax results, the are In aggregate paying XXXX, the receivable between million TRA management. an of agreement the proposal unaffiliated the be to adjusted we agreement announcing margin million, $XX.X shareholders. of we X-K and a on certain proxy these with third stellar statement an again, the EBITDA statement, tax to have approximately $XX.X to counterparties terminate to and quarter vote related quarter EBITDA asking we an filed the company pre-IPO receivable we members along by XX%. Today, our are to and our pre-IPO of stockholders representing related that

only group company's we'll that way, company's of encourage of if shareholders. believe you all unaffiliated we in parties why agreement underscore the and to and vote the all TRA approve best to unless terminate all the with the our the as the a officers TRA excludes will the holders the to named unaffiliated as Board terminate bonus executive the a majority We participants to affiliated TRA we TRA of stockholders like as all stockholders, TRA review majority and I'd who are but will termination the directors another of it, interest the is has refer statement vote not to of to TRA who those participants, well proxy a the details approve and additional termination. The management termination. Said

as with a some in start realizes tax the of any some that the benefits the participants In company to background. me public provides realize the amount TRA, result a of to for holding with entered by TRA the tax cases, certain of company is company our payment deemed our Let attributes. which XX% of into or IPO, connection

of approximately TRA participants any the we of units public subsidiary of owned holding In A year result tax is Class TRA settlement. recorded TRA any for the full $XX.X months $XX.X XXXX, our $XX.X expense million In less exchanges of absent increase of basis than of CWAN of in expect that we net and TRA shares from company. XXXX, make expense wholly million. million. common is stock our CWAN $XX have million which One Holdings, Through XXXX, of expense recorded expense assets the the first that TRA those holding to X recorded be we of in attributes

sheet to the not paid the them of in our have yet of TRA XXXX on September expense participants we to XX, liabilities and to the XXXX, liabilities incurred recorded TRA owed have the past. in balance for year-to-date or We related XXXX, TRA $XX.X as million

of to TRA the TRA dependent share XXXX. In company things, price, TRA is the of as While is the obligations exchanges The unpaid sum and of We $XXX exchanged income at contrast, we on as of have of believe September to the future inherently exchanges is of future if TRA of and majority potential for future million, settle termination our of related stockholders. liability payment the the of for future the million timing million the XX, amount exchanges, and if past million on amount number and TRA hypothetical a future other from as liabilities, $XX.X and by be upon to million. company. taxable is all XXXX, among benefits obligations future XX September company's of estimate will uncertain exchanges share historical and a timing the company's and $XXX XX, price estimated $XX.X September relates approved $XXX unaffiliated all will total books a transaction this which

the the we significant will life incur to TRA. expect it generate expenses we over will the First, savings of cumulative compared

cash not the future positively ongoing operating cash obligations. valuation TRA company will flows. flow potentially to impact company extent have the is terminated, valued to the once Second, This based utilize fund the on to and cash company's the company's will

need eliminating tax the will were provide greater TRA our continuing deferred and The in Holdings transactions ownership payments the the company's liability, in large the not participants strategic asset if we valuation certainty we about future interest company complete record a company. CWAN terminating Finally, hold allowance balances. By those performance. to TRA are or TRA or release any company the shareholders to maintain liability public to the made participants currently upon financial eliminate to ability has the record the potential to the win, believe to on greater conditioned

certain terminate participants cash position right that and receivable of shareholders future, is with the are now believe to the the hence, we tax the which TRA interest other strong significant time the and current remain company's change fact aligned agreement. shareholders, may of in the Given the

C For common the shares participants. TRA D stock, were XXXX, XXX shares were reduced Class the And D of example, which of million to and the Class number Class shares there million That outstanding Class of XX outstanding. and held outstanding at million today, and by over C less Class approximately at beginning end XXX than XXXX. C are Class company's D exclusively there

For these reasons, we the believe and not we this we agree, closing it provide is thoughts. to a good this all to to and happy shareholder-friendly hope or it some use I'll termination putting TRA are shareholders. With you decision are of over that, We Sandeep our very you, resources to proceed at execute whether that ultimate turn to time.

Jim. Thank you,

business pleased QX are the with and inspire carry momentum forward. very our results We to

As multiple we metrics across exceptional were our have noted, key record the board with highs.

the [Audio in excited are to remain and steadfast leading the our platform continued across investment world's the about investment we strides mission the deliver Gap] for business making are We management

me, as everyone, speakers. Excuse we return our

ready Are questions? Yes. for we

[Operator Instructions] first Oppenheimer. from Brian of line with Schwartz question the comes Our

these pretty your dive outsized just an any was impact? deals? strength bookings here this Or to any Sandeep, markets Did the across did trying broad-based Congratulations you're have that on outsized end strength booking mega markets? you showing core quarter. results. into the Or have

Yes. you, Brian. Thank

and what geography did So deals new did this or faster the very looked U.S. we grow business get I call, faster, admit we broad-based. And domestic international must for tried for think in of found current looked to getting did products. frankly, it a We or products from very, was was for grow of lot ready we that.

across deal was X at or geographies. was there all it situation where It wasn't was there So across a X deals. industries,

Our continue products momentum to bring to booking. new

I quarter was almost and think in now. is that I X/X that these number X, new if innovations, exactly even our had product said from correctly, booking we that remember of

logos, it I was back-to-base was So out, point sales. again, to. Nothing it would which stands really new

close is you're Jim. question NRR that pretty result here And the for for have follow-up to The I goal your reporting XXXX.

to potentially could even we XXX% us. How ceiling? how that than previously is about thinking is the perform that goal hard should that be gave think soft you there back So Or motion were base And that that could ceiling that we better what with ceiling? a potential ceiling? the

Brian. Thanks,

think very that, believe I that that's So I achievable -- NRR XXXX XXX a in we think to goal. continue is

particular, of lot wallet results. think of products products That mature, kind the They're mature. was X% increased than that from percent remember, mature. buoyed these are was that not I maturing. share obviously we're fact higher quarter. clients X% and not a from on by new In new of last platform. these our fully But They're

And so our quarter. to after about consistently quarter perform think ability after to to quarter with those respect

more we straight think there's that know I line. consistency see we'd a like to before

we laugh. that think I all

to achieving the step. think we and do we need durable, growth As soon move consistently, start metrics next that we really achieving as September, last I focused that next. delivering is durably. reliably, focused And to That's reliable get close any on these to on, on we'll we're of that XXX% out stay we laid what thinking, focused

Schmidt comes the question from Citi. Andrew line next of Our with

to Obviously, a NRR. this want that like result back go assets. additional It surprise was a And quarter. nice of you mentioned relative to I expectations. Subi, Jim, onboarding to great sounds Sandeep,

just you a to If share, lot obviously what wallet what could can continue. gain talk to those And wallet opportunity to that -- share that about extent of extent drove momentum what wins? still

Yes.

in we comes large X asset management them. grow, they our really as X ways, with with share wallet traditionally. grow clients is So Number to

about our you when X of their props that's can business, That's how think business? to one value grow we fact, In large your selling area. and expand

including we see be a products sorts tailwind cross-selling a color of market and more the In isolate saw as we little actually M&A those variety new able said, to had do were gentle a we other transactions. can confident of that that. those That X% And folks. QX, give difficult very those through growth AUM, we feel selling be can area that we the saw of period. were as clients. small we we those just to but tailwind, MLX June Another in But we we necessarily to see thing, what LPX, well activity the impact in and be hey, for, work helpful products. One that that that would have, from kind September, some to aren't in to a relative and in of increase which

think folks. I XXX%, also just helped be the with on to So NRR transparent that

product Yes. Andrew, are of innovation money all add innovation, new amount real XX% new into and obviously, we that spending I would that product clients. on a just and current of goes

sales but reliable cost. a and And can't be obviously we absolutely quarter And which always XXX% X, why aren't Jim growth that reliably. we've back they said, the course. helps -- happen try expect in like when levers, to that want is these achieve so we XXXX motion, to is aren't you so is that that due to mature, And NRR and said

Got AI modules it. quick you're little helpful. opportunity the XXXX think you XXXX. those. the how just big of more Clearwater on And there? Connect. opportunity functionality any a we details about cross-sells Can seems to monetize focus monetize versus GenAI, there's be planning like about were be It want It the when And a then would to I how big could a talk on like additional sounds that know clarity you

question, is, points, and efficient? of that, about lots talking that One And and have our was Thank operations in remarks our X we it this. deflection. lots parts you, think on platform On I Andrew. much proof Subi are more there look, and her make to does

tool wants question question their ask and client a of So GenAI platform, a they ask a and tool. to they the on the have

the with time And but to question answer people's to to that us. answer therefore, they invest Sometimes out that they're happy comes and go not, they're to if are have never we respond don't with and happy the sometimes question.

side, is reconcile? there correct, about efficiency a happens it time. of the drive thing to and data team on cases, give So that job and And done in many are I and if it, can GenAI reconciliation, that us lot The Subi margin. the and a is to saves we then how ideas gross use have think that her of tool accept same great using

this we that use the is bit, one So we right? growth, big in we product. areas we because our the is the frankly, are level one was most revenue interest. of have Jim, and is of on one sessions trying about insights where At which side, Clearwater that, other talked talked think and we the of insights, I time, this -- about Connect, of a product when this? On it did launched attended And to our the little launch

September X. September.

September, clients we So little XX more we are it in paying launched a bit customers. have who and than

that Now we the insurance that out clients corporate of point Andrew, to the only this take a for time. is and market, at to later expect

it, but not asked we if giving all. you X% So is about are growth? at there of No, it's excited me, hey, it you

is gross me, it meaningfully ask you hey, contributing to is. Yes, If margin? already it

GenAI is "Oh, end not levers both the are those Now I this of like, do. what can

it's terms drive even think very, I margins. early frankly, in or being revenue very of improve to able

are big it. we So fans of

every see quarter. of We benefit continue in that to but literally of make investment a it, we amount real

Luke Our next Capital from question Kim Yun with comes Markets. Suk

or Congrats so sustainable just NRR I at going you're out forward, the more give asset guess level, on volume? trend and We're driven How uptick expecting that to trying a us to in on can versus simply the whatnot. you you here. uptick to theme the strong from X% at asset if types new and what high and near we're much new quarter. new -- Jim, solid figure this least, was around saw products is the contribution term. how NRR by the of a products X% Obviously, asset going another types continue

Yes.

the the was think I question trend, strong. NR sequentially very strong XXX% trend obviously, of a and So what's

of I rate tailwind from comfortable or couple we're in September live think in I or quarter X take change. the we a I give from that if AUM this this to that I points points. X, range, that But the were in there think think for mentioned X range next

the that. only into impact ever I that of We've always point built looked never or add talked rate think about is been models. at the I or we've would it our the it it or historically discussed -- never interest either

if think and will us quarters, we the make continue that good. to X, trend. over But more satisfied feel the feel I I more, this stay more around if that would range do the [indiscernible] So about think products next X

XXX%. the happy about be we Yes, should

Happy XXX%, say. with the I would

that insurance towards is, the if definitely. companies. your other? asset and Is and the about that you Yes, the mix between Sandeep, go-to-market it can changing if skewing adoption products? the or just mix managers And around X talk go-to-market is overall your around newer

Yes.

looking distribution. is were X% within earlier and data, the just there we So really at of that

real change. So no

high-quality see made just deals ARR not or come geography, try on really the broad-based. Was side there about there X was contributed And this earlier which did which think to X asked to growth, geography difference. the and on it been the it, question even true. unnaturally something very for? we industry which Frankly, I is it's

of movement within of managers asset that it percent a insurance year and owners, within a yes, literally was asset and back. So what

from Our of Markets. line the Capital Jaluria with next question comes Rishi RBC

pretty coming AUA the kind to want understanding, Jim, some the better Nice from start, I to of board out rate here. solid the to across interest see maybe AUM, called impact cut. numbers first you

and over be quick As historically, we interest of a sensitivity? new an future cuts, should Plus we the a cut, know potential Subscription thinking bps on the growth. that overall XX And us help tailwind to think contract. about have follow-up. the I've duration about do have conceptually, for ARR number, would obviously how kind of bps to but a of to understand XXX been I Maybe or sort the maybe sensitivity, tailwind right, pricing it's then cut ARR that model, exact Under you got what the AUM rate growth, don't model, the

extent, us so and as But I'd went of can't base the upside. when model, summarize we we what modifying, XXX% those our plus the also public, who went AUM, were haven't we call I we pivoted and downside I limiting for to the up exact After you to down. and we -- some XXXX, think the with story first familiar give just been forever, specifics.

I've are duration as summer, of of also the to new little into it rate very much result said at a least the it's a duration. what depends see changing. And that tool, So throughout the always side, the clients' clients on past we're bit model depends on impact in interest for change also duration us. -- is And then on our a corporate in much our able how the insights portfolios shorter moved from longer our

the rates when of And change basis points were headwind XXX that curve. up roughly where by XXXX model, that have end the saying about of to under of so you that became amount, the at old by long XXX contrast there went points. interest I'll back yield in look a basis

rate we than where significant think move a it's that. was less directionally, the So curve far very entire pivoted. But that

structures, reliable a somewhat of XX-plus a think look, And is us. for we saw is of the of interest look, doing think focus tailwind. in that new a a tailwind. that positive tailwind. back it it, clients, with we meaningful. and winning percent contract We cuts for underlying hasn't It happy impact it's on Obviously, our rate about durable, we're and But less what under more growth algorithm clients So we're than that, I XXXX. been new it's growth the drives that happy bit a our driving because and drivers

that up let's anything giving Does What basis does rate -- the that the for What it doesn't into derivatives? loans? it I that for with say you except you does points. therefore, for because bank distribution wish we we're down do That and asset question, the What to what bonds? does take by platform, effectively XX does or our had a look translate capture go was we interest and so do the of what numbers does impact most answer do asset class straight by price up. But percent? security not of price x to goes on it then your -- it. part AUM would is of what classes all the much at it and have other see the of the how

think you lay on by right? up sort when of a if point class So of went the of But just most exactly we capture the out. it, it these all cut pricing, impact XX say, let's basis about to contract that's would how X%, hard is much of structure, asset

understood. kind both you No, to of right. and the over framework has really week. Wilshire partnerships, talked past bit Obviously, few little That's about. Jump the Seems M&A flexibility others. I your about past Really and excited All see preserve both pretty partnerships in then been prepared Snowflake a especially think successful, for about remarks, to And M&A. helpful years wanting want in to of though. exciting. that and to couple with a ask partnership

clients? you analytical similar you and as partnerships to work Snowflake kind vendors you think especially leverage your ability with and value your more going just and Just add do have what GenAI how other of how more for forward, ultimately capabilities, about with to

But So can once to the then I'll maybe big can and to many can which Subi very AWS platform, Snowflake wanting look, is and open up people you talk have that, one on platform. we answer you it specifically. one our of -- access, part were use of was about more reasons go the

drive very with an open As do market, architecture. where closed the about management think systems. technologies we we powerful are to to is applies that feel architectures not architecture from the open to other We industry before, think committed in system, portfolio auto you management an work way we the might know and risk systems, can it. And management

our lot energy really help a have that, don't would that but ecosystem. on want so want establishing And into option. they would that to part a in grow, XXXX can necessarily relationships of of end-to-end be us Clearwater, everything if wanted but who to we go deep client be We

and obviously, risk provide our be we and Jump, will technologies be provide platform. would So own able able to our accounting we Wilshire to

could that Subi, and for clients? Snowflake about you a just little what So bit talk does

Sure, Sandeep.

that access our the they entire is the far as common through a is of risk partnership it our if is pane data case is portfolio of like. a And to Snowflake means lake, kind can how in open a their looking which that. like, a Clearwater enables looking in looking of to pane single through point As glass, about solution data for is us partnership what and of concerned, was like, the our their reporting clients on to the which Rishi, enables client Snowflake run create single performance one Sandeep kind alluding how view the architecture looking

our us, so that, biggest clients will that which believe, and That's pain different and honestly ask us ways. update So solve works for. glass solutions client that speaking, clients of for an our say, our their a every also to is for Snowflake reporting pane we for clients, has us great -- give both partnership day Needless point. different

I'm happy that. say So to very

of from the Infante comes Our line next Michael question with Stanley. Morgan

Apologies imagine the why, relative beating to basis to XX just the rate like was it corporate cohort aren't I interest the benefit able a make dynamic. so for on I Fed conceptually, funds. to would end sure and as clients the the of front of strong? Like of the Kind aggressively asset management point understand their the X-point clients pivot want curve, your I towards dead insurance here horse books are. whereas

the AUM so was impact So any maybe high-level why just on views pronounced.

to change And assets. And got rates. the to don't of pricing of to does of bonds? What bank did a price got about too the moves the think municipal the with the Yes, interest XX loans? on basis that the do that price does of I think much the sub that do because index corporate you Index think so bonds. to expectation of is rate, asset thing interest on do but what What points. sometimes about you've also to the

change all obviously, the the much our is shared. on of price say, by asset capture because the that in based if you limit asset. And to X%, we up -- is that upside the combines to a of let's downside, ARR So give goes in them but would billing price growth as we of the

percent, a they up did by that. certain would go we if So capture

reflects AUM, if and mathematical that that try a there of but What to clarification. reflects isn't sort of the obviously other. the there's -- Michael, no know, increases provide the more ARR. or way is clear we're the assets, to the does and in calculate one happy that's don't So not, in I and it or price

And a quick follow-up. No, that's maybe helpful. just

little terms year fourth of the sort high what the XQ, you just slower revenue than XQ overall in bit and takes here. the is to gear On strength comp rate demand the looks any in product really to outlook, in why a starting growth in like guide new quarter? It and of prior environment is implied and obviously, the faced puts kick slightly easier the to

any commentary high-level helpful. would just be So there

Yes, Michael, I think that -- Jim. is this

think we at deliver look our you guide, history that's important very what for it's our do, been we and we we think what of that I If us to And history. way. on feel

there. In fact, for I said QX number the guide the at revenue least for

I we XXXX So after sit confident, we'll and I we such in feel think great where we QX, but think comfortable with think after looking we feel results QX, in, at report about talk I QX.

any I or just guide. we point, good want any we to We a add as at feel, see it's this that think just don't softness. interpret weakness see could I

the from question line of Peter comes D.A. Our Heckmann next with Davidson.

was of that spend. could target comment a to in bit the but the looking questions or road acquire basis wondering increasingly management you're as and if you about have little investment either functionality you map I that points Most X been longer-term my technology answered, build

Peter. you, Thank Yes.

offering you do to compliance that, the and amount we are Jump work will. will. provide continue see obviously us We we to to management to Yes, build and continue a high-quality we Do to Yes, space? bought on more out going expect will. system? of risk we're out you continue is I to alternatives? Are I Are planning see building have because just real sitting to to going firstly continue we to in going [indiscernible] to is of directionally for the see this you that So changing. make are. here Yes, XXXX. system Yes, a we and auto that? think us much very portfolio sort don't say Wilshire us a for build management investments

open clients an So it succeeds open an closed architecture. thinking provide think our systems I of about But able being solution really tried build it's What companies have lot for over be system. as is should want to it. which they what I about important really think to time ourselves a end-to-end Historically, work. is us do to don't

auto while data So allow security having systems, partnerships systems, platform reporting motor again, one is management systems, multiple all opening building. we one plane and with multiple master to up are risk what our regulatory

bit more more here. nascent we international the So Yes. are than building we Yes, a we Are are. little owners? for asset more building for is That markets?

so We'll continue will -- on think change. to But more And I some money R&D a but resources continue what in on tweaks, growth? based those grow. we dollars the all new market. innovation? satisfied in just XXXX. all obviously expect of I Are think where we to will. R&D. never invest GTM, mature to we happy are Jim, about more get much XX% invest invest XXXX as we more we innovations more little the Do We'll we and with position Yes, to actually we to are of happy, but and quite would through durable a expect us are, these with that? to are all beginning you the We of by anything we the think, add

That's perfect.

of the comes Gogolev Alexei next from with JPMorgan. Our question line

that Subi, that margin guide on a you're Sandeep, follow-up you're in guide. suggesting Jim, you. Thank be sounds like looking strong It Jim, had conservative, versus and congrats it EBITDA also for question imply XQ. results. margin on lower XQ your may I does the EBITDA XQ with very

XXX are you anticipate is that, addition maybe elevated quarter, there that EBITDA if fourth committed And the expense. still of wondering in to was in expansion year? I next to deliver anything bps margin So you some

Alexei. to expansion start year are XXX%, end here we on least in XXXX. points we me at that wherever of committed basis delivering with next thing, margin Let XXX last

we some second go-to-market Subi that XXXX Now going on bit remarks, and make driven and the fortify X in efficiency exceeding our that investments incremental his and growth in in and improvement team XXXX just XXXX, point in the have mentioned not expansion her future. Sandeep while using to the a of to names delivering side. now international that make XXX the are let's rate, in that that prepared talked in basis talk investing XXXX, year about already this fortify on to QX. investments Last the about only of year, the to growth but half

in QX, expertise. are for more We including multiple our looking the we're go-to-market continue Chief added people would that in we and to side, folks in Marketing we Officer, that side product go-to-market that but on say adding Fleur, adding the see I also

very that's some out enabling the built I that to with the us and happy of talked Sandeep we've think about. we're partnership do how program, things

QX to looking XX%. straight normalize -- revenue to say EBITDA there the And also guide beat through flowed at would in QX we're was that. I opportunity build in the when as an you'll for and the so to that, see beat QX, those, that you

so think I -- fourth have term, we've it's approached And the that's privilege quarter. the to investing to long think for and feel about optionality a how we

And more on integration from you Sandeep maybe that you either or then perhaps bit question, integration, you potential you announced, on second financial Great. Snowflake could to elaborate any to R&D Subi. think recently a Do this This could OpEx impact? lower expense? leverage see

Eventually, Sandeep. Yes. absolutely. This is

saying why am do this? I -- were you want if files deliver to this first? we you take Subi, now, right think I just

sure little do I or directionally in, X new would think how -- -- places to would that when platforms X probably for you new -- see effort, or we the be being required was which come us sources of the this? how integrate where have was or are impact. new data a there of Number a technologies make data So this Subi. is flows. positive able bit we where kind to a setup There

a a see over we time, period having that, down So and going impact. of positive

cycle the on onboarding. of being times second The

books kind onboard of thereby itself and onboard sources, own As as new we data recognition. the time I cycle a onboard of that we we its new think impact assets has as revenue and new and

the goes to as nice and there, I revenue see and continue partnership recognition. you will strengthen So the this thereby times anticipate a and uptick in we implementations volume cycle onboarding

think did Alexei, and that, foremost we I happy be want delight. just to it think say client for I about really I would We clients look, it. first

us save money? it will Yes. Secondarily,

Jim what both counts. true said on think is I

improvement but XX to point we're I on committed said that basis gross EBITDA, we think doing to and committed that, XXX too. also he improving to points, committed margin basis are we next year doing are

but during new So meaningfully reason helps for I doing when assets up clients our be happier gross it in they the margin, are set really feel going it onboarding. to was and

Our next with the Borges from line Goldman comes Gabriela Sachs. question of

targets progress but your little Sandeep last specifically, and Day out Jim, More highlighted all a the just you XXXX quarter, to over half and prepared put there I about remarks, process. wanted the I'm thinking to planning Investor this bit ask that back not now you've the you quarters. are in the

just more top given the last same, wondering answer that of what here easy in I to on is year. if have there's X are but I'm the made over the priorities priorities maybe the think incrementally your surfaced progress X the XXXX all or you've that

We well, ahead ahead, basis this being our good the Thank differently me Investor just is you, Gabriela. from a basis Look, basis gross ahead. think is really and observation. points points the I EBITDA basis with XXX had this It talked feel XX it's points do XXX I very and operations. that's year versus ahead. we seeing Day XXX it very not for margin about thought points about works

more ability gives to lot continue I of more bit And could think, the who be So I about scale. that, feel to ambitious license a about to confident be. a Clearwater a us

of and you a us look, also optionality. little that said, I bit million what that $XXX Jim so referenced we and cash, have that gives think And --

what market? beyond we Why to our has we to in is our and I are you XXXX how a in more So do take do position, changed aggressive pivot want clients think that, will, happy. that? One would in thinking is if really the

and like to we have pain, of them can NPS have you what sort about do gets Clearwater an real when think else do. So they it

aggressive So to and on I performance of frankly, like opportunities will of opportunities to you M&A, partnership, more opportunities our on technology think improve us do GenAI see margin, faster. even and using continue the be

somewhat but with we or So on after. day might more tomorrow focus what on aggression be growth,

line Our with William from Blair. the question comes next Becker Dylan of

with the for the of Sandeep, ask appreciate question Subi, time. here. you I'll to you. just Jim, upmarket could Sandeep, for insurers. maybe seeing momentum you're the sake if X Wondering But talk

progress you obviously drive win here. think in nuances out substantial But called spend to that they to opportunity and in large the and growing the you're a maybe thinking have quarter. propensity about the adoption segment the another There's making of market expand. a as maybe here I

Yes.

we X-year X-, frame, bring a in look, year So can XX, and in a time about who get I thinks large the think or a client, we when XX, excited insurer XX take X-, we live them onboarding large months.

that's and quickly. that bring And and a we it insurer because exciting, why announced on can so them board significant really that's you take

And I so invest we alternative are more that's and well. The scales more obviously and you'll and platform continue just that There opportunity platform you why building pointed basic It there as us they all that's more is real There know. in assets, out. Look, to is more market. as in well. there. think from to why be alternative basic about continues we But works. assets see more pain pain, talk the it works, does

is this think is money alternative think is to R&D? Well, we this service ability I spending I to area a are the and why large us. really, all insurers on And big continues target do of the think, margin, on that important. grow So them I reason, well our for assets

We win hope years. with X, X over continue to to there. we next And continue the X,

comes Our next Michael Turrin Fargo. the from question line Wells of with

time great. just as to one the constraints. given keep I'll well, Okay, it

model, just questions of uptick. just job more wanted business characteristics base in You've tougher specifically spend previously. on environment seemed at number the the a I plus a some on gotten in remarkable executing to the of on time which a retention

back model I understand various spend time AUM-based throughout. prior some base? I still just in trend the scenarios and there, some enables. as scenarios help that us now it lines that encapsulate scenario maybe model still we're want on was commentary think to base seeing can given of go the revisiting for the to upside the if you robust of just improve, maybe stable set So price Is as level more it is now the to change top just

Yes. Thanks, Michael.

been is -- we so going we that during the when assets it stabilized worried AUM, time. a down, about in We have as implemented it We far that think were has and business obviously as the I successful. So capture it upside period the time for. of plus still is what

As grow, that assets basis. we have

the into to is we that has time to other far us that that program. of has did sale turned enter defined the multiproduct what I really out this thing client. think more the be also strategic we that And at we enabled sold to upsell

it years, a you If rolled back XX go and onto we just or just built forward. added platform everything X and

a to AUM. the we're this. us, for clients able you're products was it these of things the really ROI we're what example products. And helps just clients. an tailwind new NAIC, because from And with invest the execute for that us, and of of use for in significant tailwind into to for everyone solve you more when change, for commercializing was our They're change the small our [indiscernible] We've so from what? enable turn because, for on And been and these us for this doing guess a to this course And problem also one understand this I'll all a we've and able of discretely, burden, think collectively for there -- comfortable very described upside, it burden cross-sell that through But there's significant some is to service to I also our see of Subi of kind to little of them. And opportunity their able behalf been all, both them. both clients where very paying Clearwater. to seeing change.

of So a nice real of small win-win. that's kind a example

rest today's your your for of you and call. Thank you day. That enjoy question, Thank concludes the your for participation,

Go You ahead. last want some words? say to

ratification Board work vote. I Subi. a are which I does to the or on committee, to These not Clearwater thank which the generated for to they take want to bringing by team. were our myself proposal just did thank extraordinary the that. wanted Jim team special the results It a TRA extraordinary, but moment or is termination just also shareholders in

all, for you interest your So Clearwater. thank thank and in you