Clearwater Analytics Holdings, Inc. Q2 FY2025 earnings call

• Core business performed very well, with total revenue growing 70% YOY to $181.9M and core business organic growth at 22%.
• ARR reached a record $783.5M, up 83.4% YOY. Core NRR was 114% and consolidated NRR was 110%.
• Adjusted EBITDA was $58.3M, 32.1% of revenue, up 74.3% YOY. Gross margin was 77.4% achieved, with core accounting and analytics business over 80%.
• Achieved $20M in synergies within the first few days of integrating acquired businesses.
• Formed a partnership with Bloomberg for bidirectional integration and secured a major client, VKB, as a lighthouse example of their integrated front-to-back solution.

Total revenue grew 70% year-on-year to $181.9 million. The core business contributed $130.6 million, representing a 22% year-over-year organic growth. ARR was $783.5 million, up 83.4% year-on-year. Adjusted EBITDA was $58.3 million, which was 32.1% of revenue and up 74.3% year-on-year. Gross margin was 77.4%, with the core accounting and analytics business exceeding 80% for the quarter.

• Q3 2025 total revenue expected to be $203 million to $204 million, representing a year-over-year growth rate of 75% to 76%.
• Full year 2025 total revenue expected to be between $726 million and $732 million, a year-over-year growth rate of approximately 61% to 62%.
• Q3 EBITDA expected to be $65 million, with full year EBITDA expected to be $232 million to $237 million.

• Forward-looking statements involve risks and uncertainties as per SEC filings.
• Risks related to the integration and execution of acquisitions.
• Market and competitive risks that could impact growth.

Q: Michael Infante on organic ARR and growth acceleration A: Jim Cox stated they expect acceleration in the second half of the year, noting sequential revenue growth in Q3 and Q4 will be faster than in Q1, with ARR influenced by booking and onboarding timing Q: Peter Heckmann on ARR disaggregation A: Jim Cox said the disaggregation of ARR was directionally correct, with Clearwater at ~$513M, Enfusion ~$220M-$225M, and Beacon ~$45M Q: Yun Kim on cross-selling A: Sandeep Sahai mentioned immediate cross-sell opportunity in risk, with front-to-back capability being a lighthouse example from the VKB deal Q: Alexei Gogolev on guidance and margin expansion A: Sandeep Sahai said margin expansion opportunity remains, and Jim Cox discussed guidance methodology considering Clearwater's ~20% growth, Enfusion's ~13% growth, and Beacon's lumpy but ~20% growth Q: Michael Turrin on guidance and pricing model A: Jim Cox talked about overperformance in acquired businesses due to conservative forecasting, and Sandeep Sahai discussed commercial model alignment and deliberate approach to pricing changes Q: Dylan Becker on VKB and pipeline A: Sandeep Sahai highlighted VKB as a significant lighthouse example in the German insurance market, emphasizing the importance of the integrated front-to-back solution Q: Patrick Moley on tokenization A: Sandeep Sahai stated tokenization trends align with their single instance platform advantage, giving them a ringside view on private credit, debt, and tokenization Q: Camden Levy on AI for revenue A: Sandeep Sahai discussed generative AI for efficiency improvement, with expectation of revenue growth from AI in the coming years Q: Maura Hager on alternatives and Beacon A: Sandeep Sahai spoke about Beacon's risk capabilities and the significant investment in alternatives, with Beacon's risk exposure cutting across client segments