000186636812-312024Q3false31111P1Y355xbrli:sharesiso4217:USDiso4217:USDxbrli:sharescwan:officexbrli:purecwan:vote00018663682024-01-012024-09-300001866368us-gaap:CommonClassAMember2024-10-310001866368us-gaap:CommonClassCMember2024-10-310001866368cwan:CommonClassDMember2024-10-3100018663682024-09-3000018663682023-12-310001866368us-gaap:CommonClassAMember2024-09-300001866368us-gaap:CommonClassAMember2023-12-310001866368us-gaap:CommonClassBMember2024-09-300001866368us-gaap:CommonClassBMember2023-12-310001866368us-gaap:CommonClassCMember2024-09-300001866368us-gaap:CommonClassCMember2023-12-310001866368cwan:CommonClassDMember2024-09-300001866368cwan:CommonClassDMember2023-12-3100018663682024-07-012024-09-3000018663682023-07-012023-09-3000018663682023-01-012023-09-300001866368us-gaap:CostOfSalesMember2024-07-012024-09-300001866368us-gaap:CostOfSalesMember2023-07-012023-09-300001866368us-gaap:CostOfSalesMember2024-01-012024-09-300001866368us-gaap:CostOfSalesMember2023-01-012023-09-300001866368us-gaap:ResearchAndDevelopmentExpenseMember2024-07-012024-09-300001866368us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001866368us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-09-300001866368us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001866368us-gaap:SellingAndMarketingExpenseMember2024-07-012024-09-300001866368us-gaap:SellingAndMarketingExpenseMember2023-07-012023-09-300001866368us-gaap:SellingAndMarketingExpenseMember2024-01-012024-09-300001866368us-gaap:SellingAndMarketingExpenseMember2023-01-012023-09-300001866368us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-300001866368us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001866368us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-09-300001866368us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-12-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-12-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2023-12-310001866368us-gaap:CommonStockMembercwan:CommonClassDMember2023-12-310001866368us-gaap:AdditionalPaidInCapitalMember2023-12-310001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001866368us-gaap:RetainedEarningsMember2023-12-310001866368us-gaap:NoncontrollingInterestMember2023-12-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-01-012024-03-310001866368us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001866368us-gaap:NoncontrollingInterestMember2024-01-012024-03-3100018663682024-01-012024-03-310001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001866368us-gaap:RetainedEarningsMember2024-01-012024-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2024-01-012024-03-310001866368us-gaap:CommonStockMembercwan:CommonClassDMember2024-01-012024-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2024-03-310001866368us-gaap:CommonStockMembercwan:CommonClassDMember2024-03-310001866368us-gaap:AdditionalPaidInCapitalMember2024-03-310001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001866368us-gaap:RetainedEarningsMember2024-03-310001866368us-gaap:NoncontrollingInterestMember2024-03-3100018663682024-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-04-012024-06-300001866368us-gaap:CommonStockMember2024-04-012024-06-300001866368us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001866368us-gaap:NoncontrollingInterestMember2024-04-012024-06-3000018663682024-04-012024-06-300001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300001866368us-gaap:RetainedEarningsMember2024-04-012024-06-300001866368us-gaap:CommonStockMembercwan:CommonClassDMember2024-04-012024-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2024-06-300001866368us-gaap:CommonStockMembercwan:CommonClassDMember2024-06-300001866368us-gaap:AdditionalPaidInCapitalMember2024-06-300001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001866368us-gaap:RetainedEarningsMember2024-06-300001866368us-gaap:NoncontrollingInterestMember2024-06-3000018663682024-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-07-012024-09-300001866368us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001866368us-gaap:NoncontrollingInterestMember2024-07-012024-09-300001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001866368us-gaap:RetainedEarningsMember2024-07-012024-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-07-012024-09-300001866368us-gaap:CommonStockMembercwan:CommonClassDMember2024-07-012024-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2024-09-300001866368us-gaap:CommonStockMembercwan:CommonClassDMember2024-09-300001866368us-gaap:AdditionalPaidInCapitalMember2024-09-300001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001866368us-gaap:RetainedEarningsMember2024-09-300001866368us-gaap:NoncontrollingInterestMember2024-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-12-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-12-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2022-12-310001866368us-gaap:CommonStockMembercwan:CommonClassDMember2022-12-310001866368us-gaap:AdditionalPaidInCapitalMember2022-12-310001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001866368us-gaap:RetainedEarningsMember2022-12-310001866368us-gaap:NoncontrollingInterestMember2022-12-3100018663682022-12-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-03-310001866368us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001866368us-gaap:NoncontrollingInterestMember2023-01-012023-03-3100018663682023-01-012023-03-310001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001866368us-gaap:RetainedEarningsMember2023-01-012023-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-01-012023-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2023-01-012023-03-310001866368us-gaap:CommonStockMembercwan:CommonClassDMember2023-01-012023-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2023-03-310001866368us-gaap:CommonStockMembercwan:CommonClassDMember2023-03-310001866368us-gaap:AdditionalPaidInCapitalMember2023-03-310001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001866368us-gaap:RetainedEarningsMember2023-03-310001866368us-gaap:NoncontrollingInterestMember2023-03-3100018663682023-03-310001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-04-012023-06-300001866368us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001866368us-gaap:NoncontrollingInterestMember2023-04-012023-06-3000018663682023-04-012023-06-300001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001866368us-gaap:RetainedEarningsMember2023-04-012023-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-04-012023-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2023-04-012023-06-300001866368us-gaap:CommonStockMembercwan:CommonClassDMember2023-04-012023-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2023-06-300001866368us-gaap:CommonStockMembercwan:CommonClassDMember2023-06-300001866368us-gaap:AdditionalPaidInCapitalMember2023-06-300001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001866368us-gaap:RetainedEarningsMember2023-06-300001866368us-gaap:NoncontrollingInterestMember2023-06-3000018663682023-06-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-07-012023-09-300001866368us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001866368us-gaap:NoncontrollingInterestMember2023-07-012023-09-300001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001866368us-gaap:RetainedEarningsMember2023-07-012023-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-09-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2023-09-300001866368us-gaap:CommonStockMembercwan:CommonClassDMember2023-09-300001866368us-gaap:AdditionalPaidInCapitalMember2023-09-300001866368us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001866368us-gaap:RetainedEarningsMember2023-09-300001866368us-gaap:NoncontrollingInterestMember2023-09-3000018663682023-09-300001866368country:US2024-09-300001866368cwan:InternationallyMember2024-09-300001866368us-gaap:CommonClassAMembercwan:SecondaryOfferingsDatedMarch8AndJune152023Member2023-03-082023-03-080001866368us-gaap:CommonClassAMembercwan:SecondaryOfferingsDatedMarch8AndJune152023Member2023-06-152023-06-150001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2023-03-082023-06-150001866368us-gaap:CommonStockMembercwan:CommonClassDMember2023-03-082023-06-150001866368cwan:SecondaryOfferingsDatedMarch8AndJune152023Member2023-01-012023-12-310001866368us-gaap:CommonClassAMembercwan:SecondaryOfferingsDatedNovember6And302023Member2023-11-062023-11-060001866368us-gaap:CommonClassAMembercwan:SecondaryOfferingsDatedNovember6And302023Member2023-11-302023-11-300001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2023-11-062023-11-300001866368us-gaap:CommonStockMembercwan:CommonClassDMember2023-11-062023-11-300001866368cwan:SecondaryOfferingsDatedNovember6And302023Member2023-01-012023-12-310001866368us-gaap:CommonClassAMembercwan:SecondaryOfferingsDatedMarch62024Member2024-03-062024-03-060001866368us-gaap:CommonStockMemberus-gaap:CommonClassCMember2024-03-062024-03-060001866368us-gaap:CommonStockMembercwan:CommonClassDMember2024-03-062024-03-060001866368cwan:SecondaryOfferingsDatedMarch62024Member2024-01-012024-03-310001866368us-gaap:CommonClassAMembercwan:SecondaryOfferingsDatedJune102024Member2024-06-102024-06-100001866368us-gaap:CommonStockMembercwan:CommonClassDMember2024-06-102024-06-100001866368cwan:SecondaryOfferingsDatedMarch62024Member2024-04-012024-06-300001866368cwan:CwanHoldingsLlcMember2024-09-300001866368us-gaap:CommonClassAMember2024-01-012024-09-300001866368us-gaap:CommonClassBMember2024-01-012024-09-300001866368us-gaap:CommonClassCMember2024-01-012024-09-300001866368cwan:CommonClassDMember2024-01-012024-09-3000018663682024-10-012024-09-3000018663682025-01-012024-09-3000018663682026-01-012024-09-3000018663682027-01-012024-09-3000018663682028-01-012024-09-3000018663682029-01-012024-09-300001866368country:US2024-07-012024-09-300001866368country:US2023-07-012023-09-300001866368country:US2024-01-012024-09-300001866368country:US2023-01-012023-09-300001866368us-gaap:NonUsMember2024-07-012024-09-300001866368us-gaap:NonUsMember2023-07-012023-09-300001866368us-gaap:NonUsMember2024-01-012024-09-300001866368us-gaap:NonUsMember2023-01-012023-09-300001866368us-gaap:CashMemberus-gaap:FairValueInputsLevel1Member2024-09-300001866368us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2024-09-300001866368us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryBillSecuritiesMember2024-09-300001866368us-gaap:FairValueInputsLevel2Membercwan:USGovernmentBondMember2024-09-300001866368us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2024-09-300001866368us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2024-09-300001866368us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2024-09-300001866368us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2024-09-300001866368us-gaap:FairValueInputsLevel2Member2024-09-300001866368us-gaap:CashMemberus-gaap:FairValueInputsLevel1Member2023-12-310001866368us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2023-12-310001866368us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryBillSecuritiesMember2023-12-310001866368us-gaap:FairValueInputsLevel2Membercwan:USGovernmentBondMember2023-12-310001866368us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2023-12-310001866368us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2023-12-310001866368us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2023-12-310001866368us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2023-12-310001866368us-gaap:FairValueInputsLevel2Member2023-12-310001866368cwan:WilshireMember2024-04-222024-04-220001866368cwan:WilshireMember2024-04-012024-06-300001866368cwan:WilshireMember2024-04-220001866368cwan:WilshireMemberus-gaap:DevelopedTechnologyRightsMembercwan:AAAMember2024-04-222024-04-220001866368cwan:WilshireMemberus-gaap:DevelopedTechnologyRightsMembercwan:AAAMember2024-04-220001866368cwan:WilshireMemberus-gaap:DevelopedTechnologyRightsMembercwan:IQCompositeMember2024-04-222024-04-220001866368cwan:WilshireMemberus-gaap:DevelopedTechnologyRightsMembercwan:IQCompositeMember2024-04-220001866368cwan:WilshireMemberus-gaap:CustomerRelationshipsMember2024-04-222024-04-220001866368cwan:WilshireMemberus-gaap:CustomerRelationshipsMember2024-04-220001866368cwan:WilshireMemberus-gaap:TrademarksMember2024-04-222024-04-220001866368cwan:WilshireMemberus-gaap:TrademarksMember2024-04-220001866368us-gaap:DevelopedTechnologyRightsMember2024-09-300001866368us-gaap:DevelopedTechnologyRightsMember2024-01-012024-09-300001866368us-gaap:CustomerRelationshipsMember2024-09-300001866368us-gaap:CustomerRelationshipsMember2024-01-012024-09-300001866368us-gaap:TrademarksAndTradeNamesMember2024-09-300001866368us-gaap:TrademarksAndTradeNamesMember2024-01-012024-09-300001866368us-gaap:DevelopedTechnologyRightsMember2023-12-310001866368us-gaap:DevelopedTechnologyRightsMember2023-01-012023-12-310001866368us-gaap:CustomerRelationshipsMember2023-12-310001866368us-gaap:CustomerRelationshipsMember2023-01-012023-12-310001866368us-gaap:TrademarksAndTradeNamesMember2023-12-310001866368us-gaap:TrademarksAndTradeNamesMember2023-01-012023-12-310001866368us-gaap:PropertyPlantAndEquipmentMember2024-07-012024-09-300001866368us-gaap:PropertyPlantAndEquipmentMember2023-07-012023-09-300001866368us-gaap:PropertyPlantAndEquipmentMember2024-01-012024-09-300001866368us-gaap:PropertyPlantAndEquipmentMember2023-01-012023-09-300001866368srt:MinimumMember2024-09-300001866368srt:MaximumMember2024-09-300001866368cwan:CwanHoldingsLlcMember2023-12-310001866368us-gaap:CommonClassAMember2024-07-012024-09-300001866368cwan:CommonClassDMember2024-07-012024-09-300001866368us-gaap:CommonClassAMember2023-07-012023-09-300001866368cwan:CommonClassDMember2023-07-012023-09-300001866368us-gaap:CommonClassAMember2023-01-012023-09-300001866368cwan:CommonClassDMember2023-01-012023-09-300001866368us-gaap:CommonClassAMembercwan:ConversionOfPotentiallyDilutiveEquivalentsMember2024-07-012024-09-300001866368cwan:CommonClassDMembercwan:ConversionOfPotentiallyDilutiveEquivalentsMember2024-07-012024-09-300001866368us-gaap:CommonClassAMembercwan:ConversionOfPotentiallyDilutiveEquivalentsMember2024-01-012024-09-300001866368cwan:CommonClassDMembercwan:ConversionOfPotentiallyDilutiveEquivalentsMember2024-01-012024-09-300001866368us-gaap:CommonClassAMembercwan:ClassDCommonConversionIntoClassACommonMember2024-07-012024-09-300001866368cwan:CommonClassDMembercwan:ClassDCommonConversionIntoClassACommonMember2024-07-012024-09-300001866368us-gaap:CommonClassAMembercwan:ClassDCommonConversionIntoClassACommonMember2024-01-012024-09-300001866368cwan:CommonClassDMembercwan:ClassDCommonConversionIntoClassACommonMember2024-01-012024-09-300001866368us-gaap:EmployeeStockOptionMemberus-gaap:CommonClassAMember2024-07-012024-09-300001866368us-gaap:EmployeeStockOptionMembercwan:CommonClassDMember2024-07-012024-09-300001866368us-gaap:EmployeeStockOptionMemberus-gaap:CommonClassAMember2024-01-012024-09-300001866368us-gaap:EmployeeStockOptionMembercwan:CommonClassDMember2024-01-012024-09-300001866368us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2024-07-012024-09-300001866368us-gaap:RestrictedStockUnitsRSUMembercwan:CommonClassDMember2024-07-012024-09-300001866368us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2024-01-012024-09-300001866368us-gaap:RestrictedStockUnitsRSUMembercwan:CommonClassDMember2024-01-012024-09-300001866368us-gaap:EmployeeStockMemberus-gaap:CommonClassAMember2024-07-012024-09-300001866368us-gaap:EmployeeStockMembercwan:CommonClassDMember2024-07-012024-09-300001866368us-gaap:EmployeeStockMemberus-gaap:CommonClassAMember2024-01-012024-09-300001866368us-gaap:EmployeeStockMembercwan:CommonClassDMember2024-01-012024-09-300001866368cwan:ConversionOfClassBAndClassCCommonStockMember2024-07-012024-09-300001866368cwan:ConversionOfClassBAndClassCCommonStockMember2023-07-012023-09-300001866368cwan:ConversionOfClassBAndClassCCommonStockMember2024-01-012024-09-300001866368cwan:ConversionOfClassBAndClassCCommonStockMember2023-01-012023-09-300001866368us-gaap:EmployeeStockOptionMember2024-07-012024-09-300001866368us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001866368us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001866368us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001866368us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-300001866368us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001866368us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001866368us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001866368us-gaap:EmployeeStockMember2024-07-012024-09-300001866368us-gaap:EmployeeStockMember2023-07-012023-09-300001866368us-gaap:EmployeeStockMember2024-01-012024-09-300001866368us-gaap:EmployeeStockMember2023-01-012023-09-300001866368us-gaap:CommonStockMembercwan:TwoThousandTwentyOneOmnibusIncentivePlanMember2024-09-3000018663682023-01-012023-12-310001866368us-gaap:RestrictedStockUnitsRSUMember2023-12-310001866368us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001866368us-gaap:RestrictedStockUnitsRSUMember2024-09-300001866368cwan:TwoThousandTwentyOneEmployeeStockPurchasePlanMemberus-gaap:EmployeeStockMemberus-gaap:CommonClassAMember2024-01-010001866368us-gaap:EmployeeStockMembercwan:TwoThousandTwentyOneEmployeeStockPurchasePlanMember2024-01-012024-09-300001866368cwan:TwoThousandTwentyOneEmployeeStockPurchasePlanMember2024-09-300001866368cwan:TwoThousandTwentyOneEmployeeStockPurchasePlanMember2023-12-310001866368us-gaap:LatestTaxYearMember2024-07-012024-09-300001866368us-gaap:LatestTaxYearMember2023-07-012023-09-300001866368us-gaap:LatestTaxYearMember2024-01-012024-09-300001866368us-gaap:LatestTaxYearMember2023-01-012023-09-300001866368cwan:PriorTaxPeriodMember2024-07-012024-09-300001866368cwan:PriorTaxPeriodMember2023-07-012023-09-300001866368cwan:PriorTaxPeriodMember2024-01-012024-09-300001866368cwan:PriorTaxPeriodMember2023-01-012023-09-300001866368us-gaap:NoncontrollingInterestMember2024-01-012024-09-300001866368us-gaap:SubsequentEventMember2024-11-042024-11-040001866368us-gaap:SubsequentEventMember2024-11-040001866368us-gaap:SubsequentEventMembercwan:SandeepSahaiJimCoxScottEricksonSubiSethiMember2024-11-042024-11-040001866368us-gaap:SubsequentEventMembercwan:CwanHoldingsLlcMember2024-11-040001866368cwan:CwanHoldingsLlcMemberus-gaap:SubsequentEventMembercwan:TheCompanyMember2024-11-040001866368cwan:CwanHoldingsLlcMemberus-gaap:SubsequentEventMembercwan:CertainAffiliatesOfWelshCarsonMember2024-11-040001866368cwan:SandeepSahaiMember2024-01-012024-09-300001866368cwan:SandeepSahaiMember2024-07-012024-09-300001866368cwan:SandeepSahaiMember2024-09-30
目錄
美國
證券交易委員會
華盛頓特區20549
______________________________________
表格 10-Q
______________________________________
(標記一個)
x根據1934年證券交易法第13或15(d)條款的季度報告。
截至2024年6月30日季度結束 2024年9月30日
或
o根據1934年證券交易法第13或15(d)條款的過渡報告
從            到            的過渡期間
委員會檔案編號： 001-40838
______________________________________
1.jpg
Clearwater Analytics Holdings, Inc.
（根據其章程所指定的正式名稱）
______________________________________
特拉華州87-1043711
(依據所在地或其他管轄區)
的註冊地或組織地點)		(國稅局雇主識別號碼)
識別號碼)
777 W. Main Street
900室
波伊西, 愛達荷州
83702
(總部辦公地址)（郵政編碼）
註冊人的電話號碼，包括區號：(208) 433-1200
______________________________________
根據1973年證券交易法第12(b)條規定註冊的證券：
每種類別的名稱交易
標的		每個註冊交易所的名稱
普通股A級股份，每股面值為$0.001CWAN紐約證券交易所
請勾選表示註冊人（1）已於過去12個月內（或註冊人所需提報此類報告的縮短期間）依據1934年證券交易所法第13條或15(d)條的要求提報所有報告，且（2）在過去90天內已受到此類報告要求的約束。 是 x否 o
請以核對標記表示，申報人是否已在過去12個月內（或該公司必須提交此類文件的較短期限內）根據Regulation S-t的第405條規定提出了應提交的每個互動數據文件。是 x不 o
勾選表示登記人是大型加速申報人、加速申報人、非加速申報人、較小型申報公司或新興成長公司。詳細定義請參閱《交易所法》第1202條中“大型加速申報人”、“加速申報人”、“較小型申報公司”和“新興成長公司”的定義。
大型加速歸檔人x加速歸檔人o
非加速歸檔人o小型報告公司o
新興成長型企業o
如果一家新興成長型公司，請用勾選標記表示該申報人已選擇不使用根據證交所法案13(a)條款提供的任何新的或修訂過的財務會計準則的延長過渡期。 o
在核准的名冊是否屬於殼公司（如股市法規第1202條所定義之意義）方面，請用勾選符號表示。是 o 否 x
截至2024年10月31日，登記人普通股的流通股份數為：
172,050,286 股份的A類普通股。
27,424,288 C類普通股的股份。
47,549,757 D類普通股的股份。

目錄
目錄
頁面
Financial InUBS已向美國證券交易委員會（“SEC”）提交了一份登記聲明（包括招股書、產品說明書和指數補充說明書）。關於UBS和相關證券的詳細資訊，您應閱讀這些文件以及UBS提交給SEC的其他文件。您可以免費從SEC網站www.sec.gov獲取這些文件。我們在SEC網站上的中央索引密鑰（CIk）是0001114446。
其他 資訊
i
目錄
詞彙表
根據本十週年報告書表格10-Q 所述，以下識別的詞語具有以下指定的含義，除非另有注明或上下文另有指示：
•「公司」、「我們」、「我們」、「我們的」、「Clearwater」及類似引述，是指（1）交易完成後，指Clearwater Analytics Holdings, Inc.，並且，除非另有聲明，包含CWAN Holdings的所有直接和間接附屬公司，以及（2）在交易完成前，指CWAN Holdings，並且，除非另有聲明，包含CWAN Holdings的所有直接和間接附屬公司。
•「AAA」指的是Wilshire AxiomSM、Wilshire AtlasSM、Wilshire Abacus和Wilshire iQComposite。
•「收購」指的是Clearwater Analytics, LLC收購Wilshire Axiom、Wilshire Atlas、Wilshire Abacus和Wilshire iQComposite以及相關的員工和客戶合約。SM，Wilshire AtlasSM，Wilshire Abacus和Wilshire iQComposite以及相關的員工和客戶合約。
•「收購日期」指的是2024年4月22日。
•“年度報告”是指我們於2023年12月31日（文件編號001-40838）提交給證券交易委員會的10-K表格上的年度報告，該報告於2024年2月29日提交。
•「借款人」指的是Clearwater Analytics, LLC作為信貸協議下的借款人。
•「持續股權擁有人」是指在交易完成後，直接或間接持有LLC股份和／或我們的B類普通股、C類普通股和／或D類普通股的人，包括主要股權擁有人以及我們的某些董事和高管和他們各自被允許轉讓的人，他們可以整體或部分地不時交換他們的LLC股份（以及相等數量的B類普通股或C類普通股，必要時（這些股票將立即被取消））為我們的A類普通股或我們的D類普通股的新發行股份，並且我們的D類普通股持有人還可以隨時將這些股份轉換為我們的A類普通股的新發行股份，比例為一對一（在這種情況下，他們的我們的D類普通股股份將在進行任何此類發行時比例為一對一地被取消）。
•“CWAN Holdings”指的是CWAN Holdings, LLC。
•「交易所法案」指修改後的1934年證券交易法。
•“IPO”是指我們於2021年9月結束的首次公開募股。
•“JUMP” 指的是 JUMP 科技 SAS 及其合併子公司 JUMP Consulting 盧森堡 S.a.r.l。
•“LLC協議” 指CWAN Holdings, LLC的第三次修訂及重訂有限責任公司協議。
•“LLC Interests” 指的是CWAN Holdings, LLC的普通單位，包括我們用首次公開募股的部分淨收益購買的那些單位。
•「新信貸協議」指的是Clearwater Analytics, LLC與摩根大通銀行進入的一項新信貸協議，該協議與首次公開募股的結束相關。
•“NPS”指的是我們的淨推薦得分，範圍可以從最低的負100到最高的正100，我們用來衡量客戶滿意度。NPS基準值在不同行業板塊間可能有顯著差異，但高於零的分數代表公司擁有比批評者更多的推薦者。我們計算NPS的方法反映了從我們這裡購買投資會計和報告、績效衡量、合規監控和風險分析解決方案的客戶的回應，並選擇回答調查問題。特別是，它反映了2023年第四季度中客戶給出的回應，樣本量為該時期的148個回應。NPS不考慮拒絕回答調查問題的客戶。
•「紐交所」指的是紐約證券交易所。
•「其他持續股權擁有者」指的是不是主要股權擁有者的持續股權擁有者。
•「Permira」指的是Permira Advisers LLC，通過其附屬公司成爲我們最大的股東之一。
ii
目錄
•「許可受讓人」是指，在有限責任公司協議的規定下，(a) 就任何主要股權所有者而言，其任何附屬機構；(b) 就任何其他持續股權所有者而言，其任何附屬機構，或在個人的情況下，其直系親屬。
•「主要股權擁有者」指的是威爾士卡爾遜、華平投資、籬笆以及他們各自的關聯方和許可轉讓方。
•任何給定年份的「QTD」意味着截至該年份6月30日的三個月。
•「Saas」是指軟體即服務（Software-as-a-Service）。
•「SEC」指的是證券交易委員會。
•「證券法」指的是修訂後的1933年證券法。
•「二次發行」是指Welsh Carson、Warburg Pincus和Permira的某些關聯方，依據適用情況，在2023年3月8日、2023年6月15日、2023年11月6日、2023年11月30日、2024年3月6日和2024年6月10日進行的承銷二次公開發行中，出售共計14,950,000、10,000,000、20,000,000、17,000,000、16,250,000和12,000,000股A類普通股。
•「稅收應收款協議」或「TRA」指的是截至2021年9月28日，由Clearwater Analytics Holdings, Inc.、CWAN Holdings及其中其他各方簽署的稅收應收款協議。
•「TRA獎金協議」是指2021年9月28日的稅收應收款協議獎金函，涉及Clearwater Analytics Holdings, Inc.和我們的部分高管。
•「交易」指的是在我們年度報告的註釋1 - 組織和業務描述中描述的組織交易。
•「Up-C」指的是公司的傘式合夥-C公司組織結構。請參閱本季度報告10-Q表格未審計的簡明合併基本報表中的註釋1「組織及業務描述」。
•「沃伯格皮庫斯」指的是沃伯格皮庫斯有限責任公司，這是我們通過其附屬公司持有的最大股東之一。
•「Welsh Carson」指的是Welsh, Carson, Anderson & Stowe，這是一家通過其附屬公司持有我們最大股東之一的投資公司。
•“Wilshire” refers to Wilshire Advisors LLC.
•“Wilshire Technology” refers collectively, to Wilshire AxiomSM, Wilshire AtlasSM, Wilshire Abacus and Wilshire iQComposite.
iii
Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
本季度報告表格10-Q包含根據1995年《私人證券訴訟改革法》安全港條款的「前瞻性」聲明。這些前瞻性聲明基於我們管理層的信念和假設以及當前可用的信息。這些前瞻性聲明主要包含在標題爲「管理層對財務狀況及經營結果的討論與分析」的部分中。
前瞻性聲明包括有關我們可能或假設的未來運營結果、業務策略、科技發展、融資與投資計劃、分紅政策、競爭地位、行業板塊和監管環境、潛在增長機會以及競爭影響的信息。前瞻性聲明包括那些不是歷史事實的說法，可以通過「預期」、「相信」、「可能」、「估計」、「期待」、「打算」、「或許」、「計劃」、「潛在」、「預測」、「項目」、「尋求」、「應該」、「將會」、「會」或類似的表達以及這些術語的否定形式來識別。前瞻性聲明涉及已知和未知的風險、不確定性以及可能導致我們的實際結果、表現或成就與任何未來結果、表現或成就在實質上存在重大差異的其他因素。
可能導致實際結果、表現或成就與我們預期有重大差異的重要因素包括但不限於以下幾點：
•我們在一個競爭激烈的行業中運營，許多公司基於多個因素與保險公司、資產管理公司、企業和政府實體競爭業務，包括提供的解決方案和服務的質量和廣度、創新能力、聲譽和服務價格，這種競爭可能會影響我們的財務表現和現金流；
•我們的營業收入大部分依賴於基於我們平台上資產價值的費用，若市場波動、經濟狀況惡化或其他因素導致我們平台上資產價值出現負面趨勢或波動，我們的基於費用的營業收入和收益可能會下降；
•由於我們的部分銷售努力是針對大型金融機構、企業和政府實體，因此我們面臨較長的銷售週期、相當大的前期銷售成本以及在完成部分銷售時的可預測性降低。如果我們的銷售週期延長，或者我們的前期銷售投資沒有帶來足夠的營業收入，我們的經營結果可能會受到影響；
•在過去幾年中，我們經歷了顯著的營業收入增長，但這種增長可能難以維持，我們依賴於吸引和留住頂尖人才以繼續發展和運營我們的業務。如果我們無法招聘、整合、培養、激勵和留住員工，我們可能無法維持或管理我們的增長，這可能對我們的業務、財務狀況、運營結果和現金流產生重大不利影響；
•如果我們的投資會計和報告解決方案、監管報告解決方案或風險管理或績效分析解決方案由於未被發現的錯誤或類似問題未能正常運作，我們的業務、財務狀況、聲譽或經營結果可能會受到嚴重不利影響；
•我們的業務在很大程度上依賴於計算機設備、基於雲的服務、電子交付系統、網絡和電信系統以及製造行業、Internet Plus-related和第三方的信息科技系統。上述任何方面的故障或中斷可能導致收入減少、成本增加和客戶流失，可能會對我們的業務、財務控制項、聲譽和運營結果造成損害;
•我們未能成功整合收購，包括威爾希爾科技的收購，可能會給我們的資源帶來壓力。此外，收購所帶來的增長存在重大風險，這可能會對我們的業務、財務控制項或運營結果產生實質性的負面影響；
•如果我們無法保護我們的商業機密的機密性，我們的業務和競爭地位將受到損害;
•如果我們的商標和商業名稱沒有得到充分保護，我們可能無法在感興趣的市場上建立品牌認知，我們的競爭地位可能會受到損害；
•我們可能需要對第三方關於我們侵犯、盜用或以其他方式違反他人知識產權的索賠進行辯護，這可能會分散管理層的注意力，導致我們產生重大費用，並阻止我們銷售或使用與這些權利相關的科技；
iv
目錄
•主要股權所有者繼續對我們具有重要影響，包括對需要股東批准的決策的控制，這可能限制您對提交給股東投票的事項結果的影響能力；
•我們被歸類爲「受控公司」，因此我們符合並依賴於從某些公司治理要求中獲得豁免。 與受此類要求監管的公司的股東相比，您將不會享有相同的保護。此外，主要股東的利益可能與我們的利益以及其他股東的利益存在衝突；
•我們公司章程和細則中的條款可能會延遲或阻止控制權的變更或管理層的變更;
•if we fail to remediate an identified material weakness or implement and maintain effective internal controls over financial reporting, we may be unable to accurately or timely report our financial condition or results of operations, which may adversely affect our business;
•TRA收購的完成（如下定義）須滿足某些條件，包括我們無關股東的批准，並且我們無法保證能夠滿足這些條件或實現所有預期的利益；
•在我們年度報告中以及定期向SEC提交的報告和向股東的報告中描述的其他風險。這些文件可在www.sec.gov和我們的網站上獲得。

鑑於這些風險和不確定性，您不應過分依賴前瞻性聲明。此外，前瞻性聲明僅代表我們管理層在本季度10-Q表格報告日期的信念和假設，不應被視爲清水公司在聲明後任何日期的期望或信念。清水公司不承諾，也明確拒絕任何更新不時由清水公司或其代表作出的前瞻性聲明的義務。
您應當將本季度報告(Form 10-Q)與截至2023年12月31日的經審計的合併基本報表及相關附註一起閱讀，這些內容包含在我們的年度報告中。
v
目錄
第一部分——財務信息
項目 1. 簡縮合並基本報表（未經審計）。
1
目錄
清水分析控股公司
簡明合併資產負債表
(以千爲單位，除每股金額外，未經審計)
9月30日12月31日
20242023
資產
流動資產：
現金及現金等價物$228,694 $221,765 
短期投資77,134 74,457 
應收賬款，淨額100,377 92,091 
預付款項及其他流動資產24,635 27,683 
總流動資產430,840 415,996 
物業及設備（淨額）15,279 15,349 
經營租賃使用權資產，淨額25,752 22,554 
遞延合同成本，非流動性6,172 6,439 
無形資產，淨值34,014 26,132 
商譽74,160 45,338 
長期投資30,889 21,495 
其他非流動資產6,347 5,440 
總資產$623,453 $558,743 
負債和股東權益
流動負債：
應付賬款$4,238 $3,062 
應計費用和其他流動負債60,680 49,535 
應付票據，流動部分2,750 2,750 
營業租賃負債，當前部分7,806 6,551 
應收稅款協議負債16,928 18,894 
總流動負債92,402 80,792 
應付票據，減去當前到期部分及未攤銷的債務發行成本43,830 45,828 
經營租賃負債，減去當前部分19,121 16,948 
應收稅款協議，減去當前部分11,900 — 
其他長期負債2,581 5,518 
總負債169,834 149,086 
股東權益
A類普通股，面值$0.001 每股; 1,500,000,000 授權股份， 172,013,431 截至2024年9月30日已發行並流通的股份， 127,604,185 截至2023年12月31日已發行並流通的股份
172 128 
B類普通股，面值$0.001 每股; 500,000,000 授權股份， 0 截至2024年9月30日已發行並流通的股份， 111,191 截至2023年12月31日發行和流通的股份
— — 
C類普通股，面值$0.001 每股; 500,000,000 授權股份， 27,424,288 截至2024年9月30日發行和流通的股份， 32,684,156 截至2023年12月31日發行和流通的股份
27 33 
D類普通股，面值$0.001 每股; 500,000,000 授權股份， 47,549,757 截至2024年9月30日已發行及流通的股份， 82,955,977 截至2023年12月31日已發行及流通的股份
48 83 
新增已實收資本564,331 532,507 
累計其他綜合收益4,626 2,909 
累計虧損(165,957)(181,331)
歸屬於Clearwater Analytics Holdings, Inc.的股東權益總額。403,247 354,329 
非控股權益50,372 55,328 
股東權益總額453,619 409,657 
總負債和股東權益$623,453 $558,743 

附帶說明是這些合併基本報表不可或缺的一部分。
2
目錄
清水分析控股公司
濃縮合並經營報表
(以千爲單位，除每股金額外，未經審計)
截至三個月
九月三十日		截至九個月
九月三十日
2024202320242023
營業收入$115,828 $94,664 $325,338 $269,149 
營收成本(1)
31,357 27,013 89,426 78,792 
毛利潤84,471 67,651 235,912 190,357 
營業費用：
研究和開發(1)
36,618 32,250 109,654 90,198 
銷售和市場營銷(1)
17,889 15,020 49,369 44,049 
一般管理費用(1)
22,626 26,268 65,873 75,445 
總營業費用77,133 73,538 224,896 209,692 
來自業務的收入（損失）7,338 (5,887)11,016 (19,335)
淨利息收入(2,290)(1,733)(6,191)(4,422)
應收稅款協議（受益）費用5,344 (566)11,545 6,112 
其他（收益）費用，淨額1 (971)(1,113)(1,205)
稅前收入（虧損）4,283 (2,617)6,775 (19,820)
從所得稅中受益(486)(274)(505)(184)
凈利潤（虧損）4,769 (2,343)7,280 (19,636)
減：歸屬於非控股權益的凈利潤（虧損）1,140 (454)2,184 (2,442)
歸屬於Clearwater Analytics Holdings, Inc.的凈利潤（虧損）$3,629 $(1,889)$5,096 $(17,194)
歸屬於A類和D類普通股股東的每股凈利潤（虧損）：
基本$0.02 $(0.01)$0.02 $(0.09)
稀釋$0.02 $(0.01)$0.02 $(0.09)
已發行的A類和D類普通股的加權平均股份數：
基本219,009,124201,582,951216,880,515197,903,361
稀釋231,467,214201,582,951227,768,434197,903,361

(1)Amounts include equity-based compensation as follows:
Cost of revenue$3,460 $3,346 $9,879 $8,837 
Operating expenses:
Research and development8,674 6,768 26,767 17,393 
Sales and marketing3,905 4,010 10,418 11,221 
General and administrative9,937 16,233 27,995 44,675 
Total equity-based compensation expense$25,976 $30,357 $75,059 $82,126 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Table of Contents
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands, unaudited)
截至9月30日的三個月截至九個月
九月三十日
2024202320242023
凈利潤（虧損）$4,769 $(2,343)$7,280 $(19,636)
其他綜合收益(損失)，稅後淨額:
外幣折算調整3,892 (2,358)1,645 (997)
可供出售投資的未實現收益（損失）378 (10)252 (289)
綜合收益（損失）$9,039 $(4,711)$9,177 $(20,922)
減：歸屬於非控股權益的綜合收益（損失）1,616 (853)2,364 (2,620)
歸屬於Clearwater Analytics Holdings, Inc.的綜合收益（損失）$7,423 $(3,858)$6,813 $(18,302)
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Table of Contents
Condensed Consolidated Statements of Changes in Equity
(In thousands, except share amounts, unaudited)
A類
股份 		A類
金額		B類
股份 		B類
金額 		C類
股份		C類
金額		D類
股份		D類
金額		額外
已支付
資本 		累計
其他
綜合收益 		累計
赤字 		非-
控股
利息 		總計
股東的
股票
截至2023年12月31日的餘額127,604,185$128 111,191$— 32,684,156$33 82,955,977$83 $532,507 $2,909 $(181,331)$55,328 $409,657 
行使購買普通股的期權626,608— —— —— —— 91 — — 13 104 
限制性股票單位釋放3,344,0583 — — — — — — — — 3 
因淨分享結算和其他原因而扣留的股份(1,635,604)(1)— — — — — — (25,083)— — (3,691)(28,775)
基於股權的薪酬—— —— —— —— 21,197 — — 3,119 24,316 
外幣折算調整—— —— —— —— — (1,537)— (227)(1,764)
可供出售投資的未實現損失— — — — — — — — — (58)— (8)(66)
凈利潤—— —— —— —— — — 1,898 338 2,236 
應付給持續股權所有者的應計稅收分配—— —— —— —— — — — 505 505 
所有權變動的影響16,250,00016 — — (5,259,868)(5)(10,990,132)(11)— — 9,830 (9,830)— 
截至2024年3月31日的餘額146,189,247$146 111,191$— 27,424,288$27 71,965,845$72 $528,712 $1,314 $(169,603)$45,547 $406,215 
行使購買普通股的期權836,9701 —— —— —— 5 — — — 6 
限制性股票單位釋放199,874— —— —— —— — — — — — 
爲淨股份結算和其他而扣留的股份
(638,679)(1)—— —— —— (3,824)— — (482)(4,307)
員工股票購買計劃（ESPP）發行的股份173,268— —— —— —— 2,482 — — 313 2,795 
基於股權的薪酬—— —— —— —— 22,205 — — 2,800 25,005 
外幣折算調整—— —— —— —— — (429)— (54)(483)
可供出售投資的未實現損失—— —— —— —— — (53)— (7)(60)
凈利潤（虧損）—— —— —— —— — — (430)706 276 
應付給持續股權所有者的應計稅款分配—— —— —— —— — — — (776)(776)
所有權變更的影響13,661,11914 — — — — (13,661,119)(14)— — (17)17 — 
截至2024年6月30日的餘額160,421,799$160 111,191$— 27,424,288$27 58,304,726$58 $549,580 $832 $(170,050)$48,064 $428,671 
行使購買普通股的期權867,954 1 — — — — — — 89 — — 11 100 
解除的限制性股票單位537,259 1 — — — — — — — — — — 1 
爲淨股份結算和其他而保留的股份(679,741)(1)— — — — — — (8,513)— — (1,068)(9,581)
基於股權的薪酬— — — — — — — — 23,175 — — 2,910 26,085 
外幣折算調整— — — — — — — — — 3,458 — 434 3,892 
可供出售投資的未實現收益— — — — — — — — — 336 42 378 
5
目錄
凈利潤— — — — — — — — — — 3,629 1,140 4,769 
應付給持續股權所有者的累積稅款分配— — — — — — — — — — — (697)(697)
所有權變更的影響10,866,160 11 (111,191)— — — (10,754,969)(11)— — 464 (464)— 
截至2024年9月30日的餘額172,013,431$172 0$— 27,424,288$27 47,549,757$48 $564,331 $4,626 $(165,957)$50,372 453,619 
6
目錄
A類
股份		A類
金額		B類
股份		B類
金額		C類
股份		C類
金額		D類
股份		D類
金額		額外
已支付
資本		累計
其他
綜合收入		累計
赤字		非-
控股
利息		總計
股東的
股權
截至2022年12月31日的餘額61,148,890$61 1,439,251$1 47,377,587$47 130,083,755$130 $455,320 $609 $(186,647)$68,865 $338,386 
行使購買普通股的期權790,8731 —— —— —— 2,158 — — 534 2,693 
限制股票單位釋放1,150,785— —— —— —— — — — — — 
因淨股份結算和其他原因扣留的股份(661,451)— —— —— —— (5,832)— — (1,443)(7,275)
基於股權的薪酬—— —— —— —— 18,680 — — 4,621 23,301 
外幣折算調整—— —— —— —— — 1,101 — 273 1,374 
可供出售投資的未實現收益———— —— —— — 33 — 8 41 
淨損失———— ——————(4,384)(1,033)(5,417)
應付給持續股權所有者的應計稅款分配———— ——————— 362 362 
LLC單位交換的影響14,975,00015 (25,000)—(4,823,901)(5)(10,126,099)(10)— — 7,743 (7,743)— 
截至2023年3月31日的餘額77,404,097$77 1,414,251$1 42,553,686$43 119,957,656$120 $470,326 $1,742 $(183,288)$64,444 $353,465 
行使購買普通股的期權334,226— —— —— —— 398 — — 88 486 
限制性股票單位釋放114,392— —— —— —— — — — — — 
爲了淨股份結算和其他原因而扣留的股份(175,295)— —— —— —— (961)— — (211)(1,172)
員工持股計劃發行的股份189,390— —— —— —— 2,128 — — 467 2,595 
基於股權的薪酬—— —— —— —— 23,552 — — 5,170 28,722 
外幣折算調整—— —— —— —— — (11)— (2)(13)
可供出售投資的未實現損失—— —— —— —— — (262)— (58)(320)
淨損失—— —— —— —— — — (10,921)(955)(11,876)
應付給持續股權所有者的應計稅款分配—— —— —— —— — — — (1,161)(1,161)
有限責任公司單位交換的影響10,012,06610 (12,066)— (3,215,940)(3)(6,784,060)(7)— — 5,085 (5,085)— 
截至2023年6月30日的餘額87,878,876$88 1,402,185$1 39,337,746$39 113,173,596$113 $495,444 $1,469 $(189,124)$62,696 $370,726 
行使購買普通股的期權1,211,5831 —— —— —— 1,069 — — 216 1,286 
釋放的限制性股票單位468,830 — —— —— —— — — — — — 
因淨股票結算和其他原因被扣除的股票(710,651)— —— —— —— (5,357)— — (1,083)(6,440)
基於股權的薪酬—— —— —— —— 25,329 — — 5,125 30,454 
外幣折算調整—— —— —— —— — (1,961)— (397)(2,358)
可供出售投資的未實現損失—— —— —— —— — (8)(2)(10)
淨損失—— —— —— —— — — (1,889)(454)(2,343)
應付給持續股權所有者的應計稅款分配—— —— —— —— — — — 120 120 
7
Table of Contents
Effect of LLC ownership changes— — — — — — — — — — 414 (414)— 
Balance at September 30, 202388,848,638$89 1,402,185$1 39,337,746$39 113,173,596$113 $516,485 $(500)$(190,599)$65,807 391,435 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
目錄
清水分析控股公司
簡明合併現金流量表
(以千爲單位，未經審計)
截至9月30日的九個月
20242023
營業活動
凈利潤（虧損）$7,280 $(19,636)
調整凈利潤（虧損）與經營活動提供的淨現金的對賬：
折舊和攤銷8,730 7,336 
非現金運營租賃成本6,900 5,667 
基於股權的薪酬75,059 82,126 
遞延合同獲取成本的攤銷3,573 3,563 
債務發行成本的攤銷，包含在利息費用中209 210 
遞延稅惠(3,076)(524)
投資折扣的增加(1,732)(901)
投資的實現（收益）損失24 (89)
經營資產和負債的變動：
應收賬款，淨額(7,875)(18,864)
預付費用和其他資產2,561 4,219 
遞延合同獲取成本(3,416)(2,662)
應付賬款1,586 109 
應計費用和其他負債3,763 (6,171)
應收稅款協議負債9,934 6,122 
經營活動提供的淨現金103,520 60,505 
投資活動
購買房產和設備(4,437)(4,062)
購入持有至到期的投資(3,009)— 
購入可供出售的投資(93,968)(111,018)
出售可供出售投資的收益— 5,950 
來自投資到期的收益86,867 13,517 
業務收購，扣除獲取的現金(40,121)— 
支付經營租賃的初始直接成本(104)— 
投資活動中使用的淨現金(54,772)(95,613)
融資活動
行使期權所得210 4,465 
與股權獎勵淨股份結算相關的稅款(42,663)(14,887)
借款償還(2,062)(2,062)
支付業務收購留存負債(780)— 
員工股票購買計劃的收益2,795 2,595 
支付稅務分配(25)(35)
融資活動所使用的淨現金(42,525)(9,924)
匯率變化對現金及現金等價物的影響706 (27)
期間現金及現金等價物變動6,929 (45,059)
期初現金及現金等價物221,765 250,724 
期末現金及現金等價物$228,694 $205,665 
現金流信息補充披露
支付的利息$2,627 $2,530 
支付的所得稅現金$1,179 $1,484 
非現金投資和融資活動
應付賬款和應計費用中包含的物業和設備的購買$25 $2 
應計費用中包含的稅款分配應付給持續股權所有者$3,889 $3,838 
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
Table of Contents
Clearwater Analytics Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1. Organization and Description of Business
Clearwater Analytics Holdings, Inc. (the “Company” or “Clearwater”) was incorporated as a Delaware corporation on May 18, 2021, as a holding company for the purpose of facilitating the IPO and other related transactions in order to carry on the business of the Company. Prior to the IPO, all business operations were conducted through Carbon Analytics Holdings, LLC, which changed its name to CWAN Holdings, LLC (“CWAN Holdings”) in connection with the IPO. Clearwater provides a SaaS solution for automated investment data aggregation, reconciliation, accounting and reporting services to insurers, investment managers, corporations, institutional investors and government entities. Following the IPO, Clearwater’s principal asset consists of ownership of common units in CWAN Holdings. As the sole managing member of CWAN Holdings, Clearwater operates and controls all the business operations of the Company. Our corporate structure following the IPO, as described above, is commonly referred to as an “Up-C” structure and is described in Note 1 - Organization and Description of Business in our Annual Report.
The Company headquarters is located in Boise, ID, and we operate in five offices throughout the U.S. and seven offices internationally.
Secondary Offerings
As required by the Registration Rights Agreement dated September 28, 2021, the Company participated in multiple underwritten offerings of shares held by our Principal Equity Owners during the year ended December 31, 2023 and in the nine months ended September 30, 2024. No underwritten offerings were completed in the three months ended September 30, 2024.
Pursuant to underwriting agreements executed on March 8 and June 15, 2023, certain affiliates of Welsh Carson (the “WCAS Selling Stockholders”) sold 14,950,000 and 10,000,000 shares, respectively, of Class A common stock in underwritten secondary public offerings. As part of these secondary offerings, the WCAS Selling Stockholders exchanged a total of 8,039,841 shares of Class C common stock, together with corresponding LLC Interests of CWAN Holdings, and 16,910,159 shares of Class D common stock for an equivalent number of shares of Class A common stock that were purchased by the underwriters. The Company did not sell any securities in these secondary offerings and did not receive any proceeds from the sale of the shares sold by the WCAS Selling Stockholders. For the year ended December 31, 2023, the Company incurred $1.6 million in expenses associated with these secondary offerings which were recorded as general and administrative expenses.
Pursuant to underwriting agreements executed on November 6 and November 30, 2023, certain affiliates of Welsh Carson, Warburg Pincus and Permira (the “Selling Stockholders”) sold 20,000,000 and 17,000,000 shares, respectively, of Class A common stock in underwritten secondary public offerings. As part of these secondary offerings, the Selling Stockholders exchanged a total of 6,653,590 shares of Class C common stock, together with corresponding LLC Interests of CWAN Holdings, and 30,212,119 shares of Class D common stock for an equivalent number of shares of Class A common stock that were purchased by the underwriter. The Company did not sell any securities in these secondary offerings and did not receive any proceeds from the sale of the shares sold by the Selling Stockholders. The Company incurred $0.5 million in expenses associated with these secondary offerings in the year ended December 31, 2023 which were recorded as general and administrative expenses.
Pursuant to an underwriting agreement executed on March 6, 2024, WCAS Selling Stockholders sold 16,250,000 shares of Class A common stock in an underwritten secondary public offering. As part of the secondary public offering the WCAS Selling Stockholders exchanged a total of 5,259,868 shares of Class C common stock and 10,990,132 shares of Class D common stock, and corresponding units in CWAN Holdings, for an equivalent number of shares of Class A common stock that were purchased by the underwriter. The Company did not sell any securities in the secondary offering and did not receive any proceeds from the sale of the shares sold by the WCAS Selling Stockholders. The Company incurred $0.2 million in expenses associated with the secondary offering in the three months ended March 31, 2024, which were recorded as general and administrative expenses.
Pursuant to an underwriting agreement executed on June 10, 2024, certain affiliates of Warburg Pincus and Permira (the “Warburg Pincus and Permira Selling Stockholders”) sold 12,000,000 shares of Class A common stock in an underwritten secondary offering. As part of this secondary offering, the Warburg Pincus and Permira Selling Stockholders exchanged a total of 11,917,765 shares of Class D common stock for an equivalent number of shares of Class A common stock that were purchased by the underwriter. The Company did not sell any securities in this secondary offering and did not receive any proceeds from the sale of the shares sold by the Warburg Pincus and Permira Selling Stockholders. The
10
Table of Contents
Company incurred $0.2 million in expenses associated with this secondary offering in the three months ended June 30, 2024, which were recorded as general and administrative expenses.
As of September 30, 2024, the Company owns 88.9% of the interests in CWAN Holdings. Continuing Equity Owners which hold Class B and Class C common stock own the remaining 11.1% of the interests in CWAN Holdings. The attributes of the Company's classes of common stock are summarized in the following table:
Class of Common StockVotes per ShareEconomic Rights
Class A common stock1Yes
Class B common stock1No
Class C common stock10No
Class D common stock10Yes
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the SEC and, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of results for the unaudited interim periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The results of operations for the interim period are not necessarily indicative of the results to be obtained for the full fiscal year.
Principles of consolidation
The condensed consolidated financial statements include the accounts of the Company and its directly and indirectly wholly-owned or controlled subsidiaries. All intercompany balances and transactions have been eliminated through consolidation. Clearwater Analytics Holdings, Inc. consolidated the financial results of CWAN Holdings as a Variable Interest Entity (“VIE”). Clearwater Analytics Holdings, Inc. owns the majority economic interest and has the power to control all the business and affairs of CWAN Holdings.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Actual results could differ materially from those estimates.
Items subject to estimates and assumptions include the useful lives and recoverability of long-lived assets, the average period of benefit associated with deferred contract costs, sales reserves, the incremental borrowing rate applied in lease accounting, accruals for sales tax liabilities, the fair value and probability of achieving performance conditions of equity awards, business combinations, tax valuation allowance and probability of making payments under the TRA, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities, and measurement of revenues and expenses. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, the Company’s condensed consolidated financial statements will be affected.
Significant Accounting Policies
The Company's significant accounting policies are discussed in Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the Annual Report. There have been no significant changes to these policies that have had a material impact on the Company's unaudited condensed consolidated financial statements and related notes during the three and nine months ended September 30, 2024.
11
Table of Contents
Note 3. Revenue Recognition
For SaaS offerings, the Company is applying the optional exemption to not disclose transaction price allocated to the remaining performance obligations given the Company’s monthly recurring revenue contracts.
For Licenses, the Company's remaining performance obligations represent the transaction price allocated to maintenance and support performance obligations that have yet to be satisfied. The following table includes estimated revenue expected to be recognized in the future related to maintenance and support performance obligations that are partially satisfied (in thousands):

Remainder of 20242025202620272028Thereafter
Revenue expected to be recognized in the future as of September 30, 2024$451 $986 $560 $289 $167 $— 
Of the total revenue recognized for the three and nine months ended September 30, 2024, $0.4 million and $2.3 million, respectively, was included in the deferred revenue balance as of December 31, 2023. Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were not material. Contract asset balances classified as current are $2.1 million and $2.8 million as of September 30, 2024 and December 31, 2023, respectively. Contract asset balances classified as non-current are $0.7 million and $1.9 million as of September 30, 2024 and December 31, 2023, respectively.
The following table presents the Company’s revenue disaggregated by geography, based on billing address of the customer (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
United States$94,517 $76,704 $265,912 $220,967 
Rest of World21,311 17,960 59,426 48,182 
Total revenue$115,828 $94,664 $325,338 $269,149 
Note 4. Cash, Cash Equivalents and Investments
The following tables show the Company’s cash, cash equivalents and investments by significant investment category as of September 30, 2024 and December 31, 2023 in accordance with the fair value hierarchy (in thousands):
September 30, 2024
Adjusted CostUnrealized GainsUnrealized LossesFair ValueCash and Cash EquivalentsShort-Term InvestmentsLong-Term Investments
Cash$16,365 $— $— $16,365 $16,365 $— $— 
Level 1 (1):
Money market funds$211,334 $— $— $211,334 $211,334 $— $— 
Level 2 (2):
Treasury bills$1,446 $4 $— $1,450 $— $1,450 $— 
U.S. government bonds$34,453 $111 $(6)$34,558 $— $24,670 $9,888 
U.S. agency securities$3,905 $— $(1)$3,904 $— $1,500 $2,404 
Commercial paper$13,346 $5 $— $13,351 $995 $12,356 $— 
Corporate debt securities$52,566 $190 $(10)$52,746 $— $34,149 $18,597 
Certificates of deposit$3,009 $— $— $3,009 $— $3,009 $— 
Subtotal$108,725 $310 $(17)$109,018 $995 $77,134 $30,889 
Total$336,424 $310 $(17)$336,717 $228,694 $77,134 $30,889 
12
Table of Contents
December 31, 2023
Adjusted CostUnrealized GainsUnrealized LossesFair ValueCash and Cash EquivalentsShort-Term InvestmentsLong-Term Investments
Cash$24,247 $— $— $24,247 $24,247 $— $— 
Level 1 (1):
Money market funds$190,610 $— $— $190,610 $190,610 $— $— 
Level 2 (2):
Treasury bills$1,485 $— $(2)$1,483 $— $1,483 $— 
U.S. government bonds$9,553 $20 $(11)$9,562 $— $4,387 $5,175 
U.S. agency securities$23,843 $2 $(22)$23,823 $— $23,823 $— 
Commercial paper$16,983 $9 $(1)$16,991 $6,908 $10,083 $— 
Corporate debt securities$47,951 $91 $(45)$47,997 $— $31,677 $16,320 
Certificates of deposit$3,004 $— $— $3,004 $— $3,004 $— 
Subtotal$102,819 $122 $(80)$102,860 $6,908 $74,457 $21,495 
Total$317,676 $122 $(80)$317,717 $221,765 $74,457 $21,495 
(1) Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities.
(2) Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
During the nine months ended September 30, 2024 and year ended December 31, 2023, there were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 of the fair value hierarchy.
Note 5. Business Combinations
On April 22, 2024, we completed our acquisition of Wilshire AxiomSM, Wilshire AtlasSM, Wilshire Abacus (“AAA”), and Wilshire iQComposite, which together (the “Wilshire Technology”) comprise the risk and performance analytics solutions businesses of Wilshire Advisors LLC, (“Wilshire”) a leading global financial services firm. Included in the transaction, we acquired the employee base and all customer contracts associated with the Wilshire Technology.Following the acquisition, the Wilshire Technology is co-branded as Clearwater Wilshire Analytics and enables clients to calculate performance and risk attribution, assist with security-level portfolio construction, access high-quality portfolio models, and identify investment opportunities that maximize returns and mitigate risk. The total purchase consideration for the acquisition of the Wilshire Technology was $40.1 million in cash, paid upon completion of the acquisition. In connection with the acquisition, the Company and Wilshire entered into a Transition Services Agreement pursuant to which Wilshire agreed to perform certain services for a period of time with respect to the Company’s use and operation of the Wilshire Technology, and a Master SaaS Agreement for Wilshire to license back the underlying technology for use in their retained business. We expensed acquisition-related costs in the amount of $1.3 million in general and administrative expenses in the three months ended June 30, 2024.
We have accounted for this transaction as a business combination and allocated the fair value of the consideration to the assets acquired as well as liabilities assumed, based on their estimated fair values. The excess of the purchase price over
13
Table of Contents
the fair values of these identifiable assets and liabilities was recorded as goodwill. The preliminary allocated fair value is summarized as follows (in thousands):
Fair Value
Accounts receivable$412 
Prepaid expenses325 
Intangible assets11,700 
Goodwill28,237 
Deferred revenue(552)
Cash paid for acquisition of business$40,121 
Goodwill generated from this business combination is primarily attributable to the assembled workforce, expected post-acquisition synergies from integrating the Wilshire Technology into our platform and the expansion of product offerings to our existing global customer base. The goodwill is deductible for income tax purposes.
The following table presents details of the preliminary fair values of identified intangible assets acquired (in thousands, except years):
Fair ValueEstimated Useful Life
Developed technology - AAA$9,100 5 years
Developed technology - iQComposite900 6 years
Customer relationships1,350 11 years
Trademarks350 3 years
Total$11,700 
The identified intangible assets are measured at fair value as Level III in accordance with the fair value hierarchy.

Note 6. Goodwill and Intangible Assets
Goodwill
The following table presents details of our goodwill during the nine months ended September 30, 2024 (in thousands):
Amount
Balance as of December 31, 2023$45,338 
Goodwill acquired28,237 
Foreign currency translation adjustments585 
Balance as of September 30, 2024$74,160 
14
Table of Contents
Purchased Intangible Assets
The following table presents details of our purchased intangible assets as of September 30, 2024 and December 31, 2023 (in thousands):
September 30, 2024
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Remaining Useful Life (In Years)
Intangible assets with finite lives:
Developed technology$36,183 $(7,732)$28,451 5.1
Customer relationships5,938 (701)5,237 11.0
Trade name / Trademarks686 (360)326 2.4
Total intangible assets$42,807 $(8,793)$34,014 
December 31, 2023
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Remaining Useful Life (In Years)
Intangible assets with finite lives:
Developed technology$25,829 $(3,997)$21,832 5.9
Customer relationships4,526 (377)4,149 11.9
Trade name / Trademarks331 (179)152 0.9
Total intangible assets$30,686 $(4,553)$26,132 
We recognized amortization expense of $1.6 million and $1.1 million for the three months ended September 30, 2024 and 2023, respectively, and of $4.1 million and $3.2 million for the nine months ended September 30, 2024 and 2023, respectively.
Note 7. Supplemental Consolidated Balance Sheet Information
Accounts Receivable, net
Accounts receivable, net consisted of the following (in thousands):
September 30,December 31,
20242023
Billed accounts receivable$51,151 $46,595 
Unbilled accounts receivable49,489 45,805 
Allowance for credit losses(263)(309)
Accounts receivable, net$100,377 $92,091 
The majority of invoices included within the unbilled accounts receivable balance are issued within the first week of the month directly following the period of service.
15
Table of Contents
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
September 30,December 31,
20242023
Prepaid expenses$10,834 $13,234 
Deferred contract costs, current portion4,755 4,644 
Contract assets2,109 2,772 
Other receivable5,677 6,074 
Other current assets1,260 959 
Prepaid expenses and other current assets$24,635 $27,683 
Property and equipment, net
Depreciation and amortization expense for the three months ended September 30, 2024 and 2023 was $1.7 million and $1.4 million, respectively, and for the nine months ended September 30, 2024 and 2023 was $4.6 million and $4.1 million, respectively. Accumulated depreciation and amortization as of September 30, 2024 and December 31, 2023 was $22.7 million and $18.3 million, respectively.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
September 30,December 31,
20242023
Accrued benefits and retirement$10,625 $10,329 
Accrued vendor liabilities8,906 6,883 
Acquisition holdback liability4,149 4,679 
Accrued bonus10,819 11,808 
Deferred revenue12,018 2,766 
Tax distributions payable to Continuing Equity Owners3,889 2,945 
Accrued commissions2,288 3,415 
Income tax payable1,295 456 
Other current liabilities6,691 6,254 
Accrued expenses and other liabilities$60,680 $49,535 
Other Long-term Liabilities
Other long-term liabilities consisted of the following (in thousands):
September 30,December 31,
20242023
Deferred tax liabilities$2,410 $5,356 
Asset retirement obligation171 161 
Other long-term liabilities$2,581 $5,518 
Note 8. Leases
The Company leases facilities under non-cancelable operating lease agreements with varying terms that range from one to 10 years. In addition, some of these leases have renewal options for up to five years. The Company determines if an arrangement contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, and operating lease liabilities on the Company's condensed consolidated balance sheets. The Company does not have any finance leases.
16
Table of Contents
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes initial direct costs incurred and excludes lease incentives. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not account for lease components (e.g., fixed payments including rent) separately from the non-lease components (e.g., common-area maintenance costs).
Operating lease costs were $2.3 million and $6.9 million for the three and nine months ended September 30, 2024, respectively. Variable lease cost and short-term lease costs were immaterial during the three and nine months ended September 30, 2024. Future minimum lease payments at September 30, 2024 under the Company’s non-cancelable leases were as follows (in thousands):
2024 (remaining three months)$2,132 
20259,463 
20268,936 
20274,738 
20281,717 
Thereafter3,164 
Total future minimum lease payments30,150 
Less: Imputed interest(3,223)
Present value of future minimum lease payments26,927 
Less: Current portion of operating lease liability(7,806)
Operating lease liabilities - noncurrent$19,121 
The following table presents supplemental information for the Company's non-cancelable operating leases for the nine months ended September 30, 2024 and 2023 (in thousands, except for weighted average and percentage data):
Nine Months Ended September 30,
20242023
Weighted average remaining lease term3.673.58
Weighted average discount rate5.80 %4.72 %
Cash paid for amounts included in the measurement of lease liabilities$6,676 $1,897 
Leased assets obtained in exchange for new lease liabilities$8,356 $3,637 

Note 9. Non-controlling Interest
The Company is the sole managing member of CWAN Holdings, and has the sole voting interest in, and control of the management of CWAN Holdings. As a result, the Company consolidates the financial results of CWAN Holdings. The non-controlling interest on our condensed consolidated balance sheet relates to the interests of CWAN Holdings held by the Continuing Equity Owners. The ownership of the LLC interests is summarized as follows:
September 30, 2024December 31, 2023
SharesOwnership % SharesOwnership %
Clearwater Analytics Holdings, Inc. interest in CWAN Holdings219,563,18888.9 %210,560,16286.5 %
Continuing Equity Owners' interest in CWAN Holdings27,424,28811.1 %32,795,34713.5 %
246,987,476100.0 %243,355,509100.0 %
17
Table of Contents
Note 10. Earnings (Loss) Per Share
The following tables set forth the computation of basic and diluted net earnings (loss) per share of Class A and Class D common stock (in thousands, except share amounts and per share amounts):
Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
Class AClass DClass AClass D
Basic net earnings attributable to Class A and Class D common stockholders
Numerator:
Allocation of net income attributable to Clearwater Analytics Holdings, Inc.$2,755 $874 $3,514 $1,582 
Denominator:
Weighted average number of shares of Class A and Class D common stock outstanding - basic166,244,27852,764,846149,557,64467,322,871
Basic net earnings per share attributable to Class A and Class D common stockholders$0.02 $0.02 $0.02 $0.02 
Three Months Ended September 30, 2023Nine Months Ended September 30, 2023
Class AClass DClass AClass D
Basic and diluted net loss attributable to Class A and Class D common stockholders
Numerator:
Allocation of net loss attributable to Clearwater Analytics, Inc.$(828)$(1,061)$(6,768)$(10,426)
Denominator:
Weighted average number of shares of Class A and Class D common stock outstanding - basic and diluted 88,409,355113,173,59677,898,011120,005,350
Basic and diluted net loss per share attributable to Class A and Class D common stockholders$(0.01)$(0.01)$(0.09)$(0.09)
18
Table of Contents
Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
Class AClass DClass AClass D
Diluted net earnings attributable to Class A and Class D common stockholders
Numerator:
Undistributed earnings for basic computation$2,755 $874 $3,514 $1,582 
Reallocation of earnings as a result of conversion of potentially dilutive equivalents55 (55)119 (119)
Reallocation of earnings as a result of conversion of Class D common stock to Class A common stock819 — 1,463 — 
Allocation of undistributed earnings$3,629 $819 $5,096 $1,463 
Denominator:
Weighted average number of shares of Class A and Class D common stock outstanding - basic166,244,27852,764,846149,557,64467,322,871
Add: weighted-average effect of dilutive securities exchangeable for Class A common stock:
Stock options of Clearwater Analytics Holdings, Inc.9,752,024—8,911,002—
RSUs of Clearwater Analytics Holdings, Inc.2,672,525—1,961,982—
ESPP of Clearwater Analytics Holdings, Inc.33,541—14,934—
Conversion of Class D common stock to Class A common stock outstanding52,764,846—67,322,871—
Weighted average number of shares of Class A and Class D common stock outstanding - diluted231,467,21452,764,846227,768,43367,322,871
Diluted net earnings per share attributable to Class A and Class D common stockholders$0.02 $0.02 $0.02 $0.02 
The computation of diluted net earnings per share for the three and nine months ended September 30, 2023 is not separately presented as the Company was in a net loss position in such periods.
Shares of the Company's Class B and Class C common stock do not participate in the earnings or losses of Clearwater Analytics Holdings, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B and Class C common stock under the two-class method has not been presented.
The following weighted-average potentially dilutive securities were evaluated under the treasury stock method for potentially dilutive effects and have been excluded from diluted net earnings per share due to their anti-dilutive effect:
Three Months Ended September 30,Nine Months Ended
September 30,
2024202320242023
Conversion of Class B and Class C common stock27,498,012 40,739,931 27,522,899 43,964,990 
Stock options of Clearwater Analytics Holdings, Inc.5,25010,225,81396,6289,690,549
RSUs of Clearwater Analytics Holdings, Inc.—2,923,756377,7705,425,091
Employee stock purchase plans—21,583—14,509
Total27,503,26253,911,08327,997,29759,095,139
19
Table of Contents
Note 11. Equity-Based Compensation
In September 2021, the Board of Directors of the Company (the “Board”) adopted the Clearwater Analytics Holdings, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”), pursuant to which employees, consultants and directors of our Company and our affiliates performing services for us, including our executive officers, are eligible to receive awards. The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards intended to align the interests of participants with those of our shareholders. A total of 69,200,278 shares of common stock are authorized for issuance under the 2021 Plan. In connection with the approval of the 2021 Plan, the 2017 Equity Incentive Plan was terminated and all outstanding stock options and RSUs were transferred to the 2021 Plan.
Options
The following table summarizes the stock option activity for the nine months ended September 30, 2024 (in thousands, except per share data):
Stock Options Weighted Average Exercise PriceWeighted Average Remaining
Contractual Life (Years)		Aggregate Intrinsic Value
Balance - December 31, 202313,245,354$8.31 6.65$155,438 
Granted— — 
Exercised(2,331,531)7.53 30,149 
Forfeited(589,428)12.58 
Balance - September 30, 202410,324,395$8.24 5.31$175,654 
Options vested - September 30, 20249,225,702$8.00 $159,125 
The aggregate intrinsic value as of September 30, 2024 disclosed in the above table is based on the difference between the exercise price of the stock option and the estimated fair value of the Company’s common stock as of September 30, 2024. As of September 30, 2024, the total unrecognized compensation expense related to unvested options was $3.7 million, which is expected to be recognized over a weighted average period of 0.5 years.
RSUs
The summary of RSU activity for the nine months ended September 30, 2024 is as follows (in thousands, except per share data):
Units Activity Weighted Average Grant Date Fair ValueAggregate Intrinsic Value
Unvested units as of December 31, 202313,720,137$18.61 $278,519 
Granted3,699,05619.44 
Released(4,081,191)18.58 
Cancelled(1,135,783)18.20 
Unvested units as of September 30, 202412,202,219$18.91 $308,106 
The aggregate intrinsic value disclosed in the above table is based on the closing stock price on the NYSE on September 30, 2024. As of September 30, 2024, there was $152.0 million of unrecognized equity-based compensation expense related to RSUs, which is expected to be recognized over a weighted average period of 2.2 years.
Employee Stock Purchase Plan
In September 2021, the Board adopted the Clearwater Analytics Holdings, Inc. 2021 Employee Stock Purchase Plan (“ESPP”). As of January 1, 2024, a total of 7,552,185 shares of Class A common stock were available for issuance under the ESPP. The offering periods are scheduled to start on June 1 and December 1 of each year. Eligible employees may purchase the Company's common stock through payroll deductions at a price equal to 85% of the lower of the fair market
20
Table of Contents
values of the stock as of the beginning or the end of six-month offering periods. An employee's payroll deductions under the ESPP are limited to 10% of the employee's compensation and an employee may not purchase more than $25,000 of stock during any calendar year in which the employee’s option to purchase stock under the ESPP is outstanding at any time.
As of September 30, 2024, total unrecognized equity-based compensation costs related to ESPP were $0.2 million, which is expected to be recognized over the remaining current offering period ending November 30, 2024.
ESPP payroll contributions accrued at September 30, 2024 and December 31, 2023 totaled $1.8 million and $0.4 million, respectively, and are included within accrued expenses in the consolidated balance sheets. Employee payroll contributions used to purchase shares under the ESPP will be reclassified to stockholders' equity at the end of the offering period.
Note 12. Income Taxes

As a part of the Up-C structure, Clearwater Analytics Holdings, Inc. owns a portion of CWAN Holdings, which contains all operations of the business and is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, CWAN Holdings is generally not subject to U.S. federal, state, and local income taxes. Any taxable income or loss generated by CWAN Holdings is passed through to and included in the taxable income or loss of its members in accordance with the terms of the operating agreement of CWAN Holdings.

Clearwater Analytics Holdings, Inc. is taxed as a corporation and pays corporate federal, state, and local taxes on income allocated to it from CWAN Holdings based on Clearwater Analytics Holdings, Inc.’s economic interest held in CWAN Holdings. While the Company consolidates CWAN Holdings for financial reporting purposes, the Company will not be taxed on the earnings attributed to the non-controlling interests. As a result, the income tax burden on the earnings attributed to the non-controlling interest is not reported by the Company in its condensed consolidated financial statements.

Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in the applicable quarter. In each quarter, we update the estimated annual effective tax rate and make a year-to-date adjustment to the provision. The estimated annual effective tax rate may be subject to significant volatility due to several factors, including our ability to accurately predict the proportion of our pretax income in multiple jurisdictions, certain book-tax differences, and exchanges from non-controlling interests.
The following table provides details of the provision for (benefit from) income taxes:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Income (loss) before income taxes$4,283 $(2,617)$6,775 $(19,820)
Benefit from income taxes(486)(274)(505)(184)
Effective tax rate(11.3 %)10.5 %(7.5 %)0.9 %
For the three and nine months ended September 30, 2024 and September 30, 2023, the Company’s effective tax rate was different than the statutory rate primarily because of foreign taxes, equity-based compensation, the generation of tax credits and incentives, and the valuation allowance on U.S. deferred tax assets. In addition, the Company is not liable for income taxes on the portion of CWAN Holdings’ earnings that are attributable to the non-controlling interest.

The Company regularly monitors its uncertain tax positions, and as of September 30, 2024, there were no material unrecognized tax benefits that, if realized, would affect the estimated annual effective tax rate, nor do we expect any significant changes within the next 12 months.
We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence as of September 30, 2024, we believe that it is more likely than not that the tax benefits of the U.S. deferred tax assets may not be realized. Accordingly, we have recorded a full valuation allowance against the U.S. net deferred tax assets. In our valuation allowance evaluation, we give more weight to evidence that can be objectively verified than to evidence that cannot be objectively verified. Our consideration of the evidence requires management to make a number of significant judgements, estimates, and assumptions about highly complex and inherently uncertain matters.
21
Table of Contents
Note 13. Tax Receivable Agreement Liability
Pursuant to our election under Section 754 of the Internal Revenue Code of 1986, as amended (the “Code”), we expect to obtain an increase in our share of the tax basis in the net assets of CWAN Holdings when its units are redeemed or exchanged. We intend to treat any redemptions and exchanges of CWAN Holdings units as direct purchases of the units for U.S. federal income tax purposes. These increases in our tax basis may reduce the amounts that we would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
In connection with the IPO and related transactions, we entered into a TRA that provides for the payment by us of 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of (i) increases in our share of the tax basis in the net assets of CWAN Holdings resulting from any redemptions or exchanges of CWAN Holdings units, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest and bonus payments pursuant to the TRA Bonus Agreements (the “TRA Payments”). We expect to benefit from the remaining 15% of any tax benefits that we may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in CWAN Holdings or the Company. The rights of each member of CWAN Holdings, that is a party to the TRA, are assignable to transferees of their respective CWAN Holdings units.
The estimation of a liability under the TRA is, by its nature, imprecise and subject to significant assumptions regarding a number of factors, including (but not limited to) the amount and timing of taxable income generated by the Company each year as well as the tax rate then applicable. The future tax benefits related to ownership exchanges completed as of September 30, 2024 are estimated to be $490 million, of which $417 million is estimated to be the associated TRA liability.
As noted above, the Company evaluated the realizability of its U.S. deferred tax assets and has recorded a full valuation allowance against the future realization of those benefits. As such, no TRA liability related to future years has been recorded as of September 30, 2024.

Before considering the tax benefits subject to our TRA, we estimate that we will report taxable income in 2024 primarily due to capitalization of research and development expenses under Section 174 and equity-based compensation expense that has either not yet met the rules for deductibility or has had the deduction limited under Section 162(m). As there are many assumptions and considerations that impact our taxable income position in the current year, the estimate of our taxable income position (and thus, the TRA liability recognized) for the current year could change significantly. A reconciliation of the beginning and ending balance of the TRA liability is as follows (in thousands):

Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Beginning$23,249 $19,200 $18,894 $12,200 
TRA expense related to current year5,152 1,145 11,353 7,823 
TRA bonus expense related to the current year248 55 547 377 
TRA expense adjustments to the filed tax return192 (1,710)192 (1,710)
TRA bonus adjustments to the filed tax return9 (82)9 (82)
Payments(22)(52)(2,167)(52)
Ending$28,828 $18,556 $28,828 $18,556 
Tax receivable agreement expense5,344 (566)11,545 6,112 
TRA bonus expense in operating expenses257 (26)556 296 
Total expense$5,601 $(592)$12,101 $6,408 

As of September 30, 2024, the non-controlling interest holders held 27,424,288 units in CWAN Holdings that could, at their discretion, be exchanged for Class A shares. As units are exchanged, we may record future tax benefits and an associated TRA liability as a result of the increases in our tax basis in CWAN Holdings from the exchanges. The amount of the increase in the tax basis, the related estimated tax benefits, and the related TRA liability to be recorded will depend (among other things) on the price of the Company’s Class A stock at the time of the relevant redemption or exchange. If the non-controlling interest holders exchanged all of their units at the Company’s Class A stock price as of September 30, 2024, we estimate the future tax benefits related to these hypothetical exchanges to be $232 million, of which $197 million is estimated to be the associated TRA liability.
22
Table of Contents
Note 14. Subsequent Events
On November 4, 2024, the Company entered into Amendment No. 1 to the Tax Receivable Agreement (the “Amendment”) by and among (i) the Company, (ii) CWAN Holdings and (iii) certain affiliates of the Principal Equity Owners, which amends the TRA.
The effectiveness of the Amendment is subject to the approval of the Amendment (the “Amendment Proposal”) by a majority of the “Unaffiliated Stockholders” (which condition shall not be waivable) and an absence of regulatory orders or laws prohibiting the effectiveness of the Amendment. The term “Unaffiliated Stockholders” refers to the stockholders of the Company, other than (i) the parties to the TRA (the “TRA Parties”); (ii) any members of the Board who are employees of a TRA Party or its affiliates; (iii) any “officer” of the Company (as defined in Rule 16a-1 of the Exchange Act) and, without duplication, any TRA Bonus Recipient (as defined herein); and (iv) any member of any of the foregoing’s “immediate family” (as defined in Rule 16a-1 of the Exchange Act), or any “affiliate” or “associate” (each, as defined in Rule 12b-2 of the Exchange Act) of any of the foregoing. The Company intends to hold a special meeting of stockholders to obtain approval of the Amendment Proposal and will file with the SEC a preliminary proxy statement with respect thereto on November 6, 2024.
Pursuant to the Amendment, the TRA will be amended to provide for the payment of one-time settlement payments (each, a “Settlement Payment” and collectively, the “Settlement Payments”) in a gross amount of approximately $72.5 million, inclusive of approximately $69.2 million to be paid to the TRA Parties (net of the TRA Bonus Payments) and approximately $3.3 million in cash bonus payments (the “TRA Bonus Payments”) to be paid to certain executive officers of the Company pursuant to TRA Bonus Agreements (the “TRA Bonus Recipients”) which TRA Bonus Payments are triggered under the TRA Bonus Agreements by the payment of the Settlement Payments to the TRA Parties, as consideration for the complete and full termination of the Company’s payment obligations (past, current and future) under the TRA and the relinquishing of all payment rights (past, current and future) of the TRA Parties under the TRA (the payment of the Settlement Payments and the consummation of the other transactions contemplated by the Amendment, including the payment of TRA Bonus Payments, the “TRA Buyout”). The aggregate amount of Settlement Payments is inclusive of $28.8 million in TRA liabilities reported on the Company’s balance sheet as of September 30, 2024.
$2.7 million of the $3.3 million in TRA Bonus Payments to be made in connection with the TRA Buyout is payable to our named executive officers, Sandeep Sahai, Jim Cox, Scott Erickson and Subi Sethi, and the remaining is payable to certain other officers of the Company, each in their capacities as TRA Bonus Recipients. Each of the TRA Bonus Recipients are excluded from the Unaffiliated Stockholders entitled to vote at the special meeting.
The Settlement Payments to be made by the Company will be funded by a cash distribution by CWAN Holdings to owners of its LLC Units in an aggregate amount equal to approximately $81.6 million, of which $72.5 million will be distributed to the Company and approximately $9.0 million will be distributed to certain affiliates of Welsh Carson, each in their capacities as owners of CWAN Holdings’ LLC Units.



23
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Management’s Discussion and Analysis of Financial Condition and Results of Operations and financial statements included in the Annual Report on Form 10-K. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and in the section titled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and those discussed in the section titled “Risk Factors” in the Annual Report on Form 10-K.
Overview
Clearwater brings transparency to the opaque world of investment accounting and analytics with what we believe is the industry’s most trusted and innovative single instance, multi-tenant technology platform. Our cloud-native software allows clients to radically simplify their investment accounting operations, enabling them to focus on higher-value business functions such as asset allocation strategy and investment selection. Our platform provides comprehensive accounting, data and advanced analytics as well as highly-configurable reporting for global investment assets daily or on-demand, instead of weekly or monthly. We instill in our clients, confidence that they are making the most informed decisions about investment performance, regulatory compliance and risk.
We provide investment accounting and reporting, performance measurement, compliance monitoring and risk analytics solutions for asset managers, insurance companies, government entities, and corporations. Every day, Clearwater’s powerful platform aggregates and normalizes data on over $7.3 trillion of global invested assets for over 1,300 clients. We bring modern software to an industry that has long been dominated by difficult-to-use, high cost legacy technologies and processes, which often lack data integrity and traceability, and often require significant manual intervention. The strength of our platform is demonstrated by our approximately 80% win rate for new clients over the prior six years in deals that reached the proposal stage, as well as a NPS of 60+ and at least 98% gross retention in 22 of the last 23 quarters.
We allow our clients to replace legacy systems with modern cloud-native software. Our platform helps clients reduce cost, time, errors and risk and allows them to reallocate resources to other value-creating activities. Our software aggregates, reconciles and validates data from more than 4,100 daily data feeds and more than four million securities that have been modeled across multiple currencies, asset classes and countries. This cleansed and validated data runs through our proprietary accounting, performance, compliance and risk solutions to provide clients with powerful analytics and daily or on-demand configurable reporting. We offer multi-asset class, multi-basis, multi-currency accounting and analytics that provide clients with a comprehensive view of their holdings and related performance. This allows our clients to make better, more timely decisions about their investment portfolios.
Clearwater benefits from powerful network effects. With our single instance, multi-tenant architecture, every client, whether new or existing, enriches our global data set by making it more complete and accurate. Our software continually sources, ingests, models, reconciles and validates the terms, conditions and features of every investment security held by all of our clients. This continuous process helps to create a single repository of comprehensive, accurate investment data (often referred to within the industry as a “Golden Copy” of data) that benefits all our clients to the extent they otherwise have rights to the data. Through this continuous process, we are able to identify and adjudicate data discrepancies that otherwise could introduce error and risk into our clients’ investment portfolios. We believe that a meaningful competitive advantage of this network effect is that we are increasingly seen as the best and most accurate source of investment accounting data and analytics in the industry.
We have a 100% recurring revenue model, excluding revenue from professional services and license-related revenue from the JUMP acquisition. We charge our clients a fee that is based on the amount and complexity of the assets they manage on our platform as well as the breadth of the solution utilized by the client. In 2022, we transitioned our contracting structure to a framework we describe as Base+ for all new clients. A Base+ contract framework includes a base fee for a prospective or existing client’s book of business plus an incremental fee for increases in assets on the platform. This structure is designed to limit the downside volatility in our asset-based fees. We also began to amend contracts with our existing clients to either modify the structure of such contracts from a pure asset-based fee to this Base+ model or to increase the basis point price. Prior to 2022, we charged a basis point fee based on the client’s assets on the platform subject to contracted minimums. For those clients contracted prior to 2022 and whose contract has not been amended, our revenues may more significantly fluctuate with the changes in those clients’ assets. A majority of the assets on our platform
24
Table of Contents
are high-grade fixed income assets, which have traditionally had lower levels of volatility, enabling our highly predictable revenue streams. The Base+ model includes annual increases in the base fee and enables us to charge additional fees for supplemental services provided for certain alternative asset classes (e.g., LPx, MLx) or additional products (e.g. Prism, OMS/PMS) should the client choose to utilize those services.
Key Factors Affecting Our Performance
The growth and future success of our business depends on many factors, including those described below.
•Adding New Clients in Established End Markets: Our future growth is dependent upon our ability to continue to add new clients. We are focused on continuing to increase our client base in our established client end-markets of corporations, government entities, insurance companies and asset managers, and doing so with increasingly large and sophisticated clients. As we add clients, it takes time to fully onboard their assets to the platform. Our revenue generally increases as assets are added to the platform, while the effort to serve the client is relatively consistent over time. Therefore, we expect revenues and gross margins to increase for a client as the client transitions from the onboarding process to a steady state once assets have been onboarded. In any period, our gross margins may fluctuate based on the relative size and number of clients that we are onboarding at that time.
•Expanding and Retaining Relationships with Existing Clients: Our future growth is dependent upon retaining our existing clients and expanding our relationships with these clients through increases in the amount of their assets on our platform, or providing additional solutions and services. We have enjoyed consistent gross revenue retention rates of at least 98% in 22 of the past 23 quarters. The consistency in revenue retention creates predictability in our business and enables us to better plan our future investments. Our relationships with our clients expand as these clients add more assets to our platform, or as we provide additional solutions and services, with our quarterly net revenue retention rates (as defined below under “—Key Operating Measures”) between 108% and 114% over the past year. Clients may add assets as a result of acquiring new clients themselves or by acquiring new businesses or simply through organic growth, which produces additional assets that they manage using our platform. We believe that our client service model and technology platform are strong contributing factors in our attractive retention rates. As such, we expect to continue to invest in both our operations and research and development functions to maintain and increase our high levels of client satisfaction, which we believe will lead to strong client retention and expansion.
•International Expansion: We believe that the value provided by our platform is equally applicable to asset owners and asset managers outside of North America, and there is a significant opportunity to expand our client base and usage of our platform internationally. Our future growth is dependent upon our ability to successfully enter new international markets and to expand our client base in our current international markets. Our cost to acquire clients in international markets is currently greater than in North America because there is less awareness of the Clearwater brand and our product capabilities, and we have to date invested less in sales and marketing internationally. For these reasons, we expect to invest more in sales and marketing in international markets relative to North America in order to achieve growth in these international markets.
•Adding New Clients in Adjacent or Nascent End-Markets: Our strategy is to also add new clients in our more nascent end-markets, which include state and local governments, pension funds and sovereign wealth funds, as well as a variety of alternative asset managers. Traditionally, our existing clients have been among our best resources for referring new clients to us, and we will continue to invest in sales and marketing to build awareness of our brand, engage prospective clients and drive adoption of our platform, particularly as it relates to expanding into new end-markets. As we establish our presence in new end-markets, we expect sales and marketing expenditures will be less efficient than in our established verticals and we will become increasingly more efficient at acquiring clients in new end-markets over time.
•Expanding Solutions and Broadening Innovation: Our future growth is dependent upon our continued expansion of our solutions in order to better retain our current clients and to develop new use cases that appeal to new clients. While we believe we will be able to reduce our research and development expenses as a percentage of revenues as we achieve greater scale, our priority is to maintain and grow our technological advantage over our competitors. As we identify opportunities to increase our technological and competitive advantages, we may increase our investments in research and development at rates that are faster than our growth in revenues in order to enhance our long-term growth and profitability.
25
Table of Contents
•Fluctuations in the Market Value of Assets on the Platform: Although we generally have a base fee and adopted our Base+ model in 2022, we also bill our clients monthly in arrears based on a basis point rate applied to our clients’ assets on our platform, which can be influenced by general economic conditions. While 77% of the assets on our platform were high-grade fixed income securities and structured products as of December 31, 2023 and traditionally subject to lower levels of volatility, the value of our clients’ assets on our platform varies on a daily basis due to changes in securities prices, cash flow needs, incremental buying and selling of assets and other strategic priorities of our clients. For these reasons, our revenue is subject to fluctuations based on economic conditions, including market conditions and the changing interest rate environment.
Key Components of Results of Operations
The following discussion describes certain line items in our condensed consolidated statements of operations.
Revenue
We generate revenue from fees derived from providing clients with access to the solutions and services on our SaaS platform. Sales of our offering include a right to use our software in a hosted environment without taking possession of the software. Our contracts are generally cancellable with 30 days’ notice without penalty. We invoice clients monthly in arrears based on a percentage of the average daily value of assets within a client’s accounts on our platform during that month, or based on a fixed monthly base fee. Payment terms may vary by contract but generally include a requirement of payment within 30 days following the month in which services are provided. Fees invoiced in advance of the delivery of the Company’s performance obligations are deemed set-up activities and are deferred as a material right and recognized over time, typically 12 months. Through our JUMP subsidiary which we acquired on November 30, 2022, we also earn license revenue.
Cost of Revenue
Cost of revenue consists of expenses related to delivery of revenue-generating services, including expenses associated with client services, onboarding, reconciliation and agreements related to the purchase of data used in the provision of our services. Salary and benefits for certain personnel associated with supporting these functions, in addition to allocated overhead, amortization of acquisition-related developed technology intangible asset, and depreciation for facilities, are also included in cost of revenue.
Operating Expenses
Research and development expense consists primarily of salary and benefits for our development staff as well as contractors’ fees and other costs associated with the enhancement of our offering, ensuring operational stability and performance and development of new offerings.
Sales and marketing expense consists of the costs of personnel involved in the sales and marketing process, sales commissions, advertising and promotional materials, sales facilities expenses, and the cost of trade shows and seminars.
General and administrative expense consists primarily of personnel costs for information technology, finance, administration, human resources and general management, as well as expenses from legal, corporate technology and accounting service providers.
Interest Income, Net
Interest income relates to interest received on our cash and cash equivalents based on interest rates in the course of the applicable period, and interest received from other investments.
Interest expense reflects interest accrued on our outstanding term loan during the course of the applicable period. The accrual of interest varies depending on the timing and amount of borrowings and repayments during the period as well as fluctuations in interest rates.
Tax Receivable Agreement (Benefit) Expense
In connection with the IPO and related transactions, we entered into a TRA that provides for the payment by us of 85% of certain tax benefits that we realize as a result of increases in our tax basis of CWAN Holdings resulting from redemptions or exchanges of CWAN Holdings units. Tax receivable agreement expense relates to amounts that are probable of being incurred under the TRA.
Other (Income) Expense, Net
Other (income) expense, net consists of gains and losses of foreign currency and investments.
26
Table of Contents
Benefit from Income Taxes
Benefit from income taxes consists of income taxes related to federal, state, and foreign jurisdictions where we conduct our business. Our effective tax rate may increase in the future as our ownership in CWAN Holdings increases via exchanges from historical partners. In addition, our discrete items may not be consistent from period to period and could cause volatility in our effective tax rate.
Key Operating Measures
We consider certain operating measures, such as annualized recurring revenue, gross retention rates and net retention rates, in measuring the performance of our business. The following table summarizes these operating measures as of the dates presented:
First QuarterSecond QuarterThird QuarterFourth Quarter
2024
Annualized recurring revenue (in thousands)$402,326 $427,189 $456,941 
Gross revenue retention rate99 %99 %99 %
Net revenue retention rate110 %110 %114 %
2023
Annualized recurring revenue (in thousands)$337,366 $349,536 $362,442 $379,096 
Gross revenue retention rate97 %98 %98 %98 %
Net revenue retention rate106 %109 %108 %107 %
Annualized Recurring Revenue
Annualized recurring revenue is calculated at the end of a period by dividing the recurring revenue in the last month of such period by the number of days in the month and multiplying by 365.
Because a substantial majority of the assets on our platform typically have low levels of volatility with respect to their market value, the growth in annualized recurring revenue is generally not attributable to the fluctuating market value of the assets on our platform. Rather, the growth in annualized recurring revenue is due to an increase in the number of clients using our offering as well as from onboarding more assets of our existing clients onto our platform.
Annualized recurring revenue increased by 26.1% from September 30, 2023 to September 30, 2024 on account of growth in our client base as we brought new clients onto our platform, added additional assets onto our platform from existing clients, increased services for existing clients and acquired the customer base related to the Wilshire Technology acquisition.
Gross Revenue Retention Rate
Gross revenue retention rate represents annual contract value (“ACV”) at the beginning of the 12-month period ended on the reporting date less client attrition over the prior 12-month period, divided by ACV at the beginning of the 12-month period, expressed as a percentage. ACV is comprised of annualized recurring revenue plus contracted-not-billed revenue, which represents the estimated annual contracted revenue for new and existing client opportunities prior to revenue recognition. In order to arrive at total ACV, we include contracted-not-billed revenue, as it is contracted revenue that has not been recognized but that we expect to produce recognized revenue in the future. Client attrition occurs when a client provides a contract termination notice. The amount of client attrition is calculated as the reduction in annualized revenue of the client at the time of the notice and is recorded in the month the final billing occurs. In the case of client attrition where contracted-not-billed revenue is still present for a client, both annualized recurring revenue and contracted-not-billed revenue associated with such client are deducted from ACV.
As of September 30, 2024, the gross revenue retention rate was 99% compared to 98% as of September 30, 2023. The Company has reported a gross revenue retention rate of at least 98% for 22 out of the 23 prior quarters. We believe the consistent and high gross revenue retention rate is a testament to the value proposition that our leading solution offers.
Net Revenue Retention Rate
Net revenue retention rate is the percentage of recurring revenue retained from clients on the platform for 12 months and includes changes from the addition, removal or value of assets on our platform, contractual changes that have an impact to annualized recurring revenues and lost revenue from client attrition. We calculate net revenue retention rate as of a period end by starting with the annualized recurring revenue from clients as of the 12 months prior to such period end.
27
Table of Contents
We then calculate the annualized recurring revenue from these clients as of the current period end. We then divide the total current period end annualized recurring revenue by the 12-month prior period end annualized recurring revenue to arrive at the net revenue retention rate.
Non-GAAP Financial Measures
We also consider certain non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), such as Adjusted EBITDA and Adjusted EBITDA Margin, in measuring the performance of our business. The non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. However, we believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance, when reviewed in conjunction with our GAAP financial statements. These measures should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP, and because these amounts are not determined in accordance with GAAP, they should not be used exclusively in evaluating our business and operations. In addition, undue reliance should not be placed upon non-GAAP or operating information because this information is neither standardized across companies nor subjected to the same control activities and audit procedures that produce our GAAP financial results.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are supplemental performance measures that our management uses to assess our operating performance. We define Adjusted EBITDA as net income (loss) plus (i) interest income, net, (ii) depreciation and amortization, (iii) equity-based compensation expense and related payroll taxes, (iv) tax receivable agreement expense, (v) transaction expenses, and (vi) other (benefit) expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.
The following tables reconcile net income (loss) to Adjusted EBITDA and include amounts expressed as a percentage of revenue for the periods indicated.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in thousands, except percentages)(in thousands, except percentages)
Net income (loss)$4,769 4 %$(2,343)(2 %)$7,280 2 %$(19,636)(7 %)
Adjustments:
Interest income, net(2,290)(2 %)(1,733)(2 %)(6,191)(2 %)(4,422)(2 %)
Depreciation and amortization3,239 3 %2,476 3 %8,730 3 %7,336 3 %
Equity-based compensation expense and related payroll taxes26,907 23 %31,225 33 %80,540 25 %84,417 31 %
Tax receivable agreement (benefit) expense5,344 5 %(566)(1)%11,545 4 %6,112 2 %
Transaction expenses248 0 %61 0 %1,926 1 %1,612 1 %
Other (benefit) expenses(1)
123 0 %(564)(1 %)162 0 %504 0 %
Adjusted EBITDA38,340 33 %28,556 30 %103,992 32 %75,923 28 %
Revenue$115,828 100 %$94,664 100 %$325,338 100 %$269,149 100 %
(1)Other (benefit) expenses include gains on investments, management fees to our investors, income taxes, and foreign exchange gains and losses.
28
Table of Contents
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in thousands)
Amortization of prepaid management fees and reimbursable expenses608 681 1,780 1,894 
Benefit from income tax expense(486)(274)(505)(184)
Other (income) expense, net1 (971)(1,113)(1,205)
Total other (benefit) expenses$123 $(564)$162 $504 
Results of Operations
The following tables set forth our results of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in thousands)
Revenue$115,828 $94,664 $325,338 $269,149 
Cost of revenue(1)
31,357 27,013 89,426 78,792 
Gross profit84,471 67,651 235,912 190,357 
Operating expenses:
Research and development(1)
36,618 32,250 109,654 90,198 
Sales and marketing(1)
17,889 15,020 49,369 44,049 
General and administrative(1)
22,626 26,268 65,873 75,445 
Total operating expenses77,133 73,538 224,896 209,692 
Income (loss) from operations7,338 (5,887)11,016 (19,335)
Interest income, net(2,290)(1,733)(6,191)(4,422)
Tax receivable agreement (benefit) expense5,344 (566)11,545 6,112 
Other (income) expense, net1 (971)(1,113)(1,205)
Income (loss) before income taxes4,283 (2,617)6,775 (19,820)
Benefit from income taxes(486)(274)(505)(184)
Net income (loss)4,769 (2,343)7,280 (19,636)
Less: Net income (loss) attributable to non-controlling interests1,140 (454)2,184 (2,442)
Net income (loss) attributable to Clearwater Analytics Holdings, Inc.$3,629 $(1,889)$5,096 $(17,194)
(1)Amounts include equity-based compensation as follows:
Cost of revenue$3,460 $3,346 $9,879 $8,837 
Operating expenses:
Research and development8,674 6,768 26,767 17,393 
Sales and marketing3,905 4,010 10,418 11,221 
General and administrative9,937 16,233 27,995 44,675 
Total equity-based compensation expense$25,976 $30,357 $75,059 $82,126 
29
Table of Contents
The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenue100 %100 %100 %100 %
Cost of revenue27 %29 %27 %29 %
Gross profit73 %71 %73 %71 %
Operating expenses:
Research and development32 %34 %34 %34 %
Sales and marketing15 %16 %15 %16 %
General and administrative20 %28 %20 %28 %
Total operating expenses67 %78 %69 %78 %
Income (loss) from operations6 %(6 %)3 %(7 %)
Interest income, net(2 %)(2 %)(2 %)(2 %)
Tax receivable agreement (benefit) expense5 %(1 %)4 %2 %
Other (income) expense, net0 %(1 %)0 %0 %
Income (loss) before income taxes4 %(3 %)2 %(7 %)
Benefit from income taxes0 %0 %0 %0 %
Net income (loss)4 %(2)%2 %(7)%
Comparison of the three and nine months ended September 30, 2024 and 2023 (unaudited)
Revenue
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except percentages)20242023$ Change% Change20242023$ Change% Change
Revenue$115,828 $94,664 $21,164 22 %$325,338 $269,149 $56,189 21 %
Revenue increased $21.2 million and $56.2 million for the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in 2023. The increase was primarily on account of $10.8 million and $21.6 million of growth in our client base for the three and nine months ended September 30, 2024, respectively. Further, our growth was due to the acquired customer base related to the Wilshire Technology acquisition, new clients brought onto our platform, as well as changes to our existing clients’ assets on our platform and increasing revenue which is not related to assets on our platform. Average assets on our platform that were billed to new and existing clients increased by 17.5% and 14.8% for the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in 2023. Average basis point rate billed to clients increased by 5.7% and 5.3% for the three and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023.
30
Table of Contents
Cost of Revenue
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except percentages)20242023$ Change% Change20242023$ Change% Change
Equity-based compensation$3,460 $3,346 $114 3 %$9,879 $8,837 $1,042 12 %
All other cost of revenue27,897 23,667 4,230 18 %79,547 69,955 9,592 14 %
Total cost of revenue$31,357 $27,013 $4,344 16 %$89,426 $78,792 $10,634 13 %
Percent of revenue27 %29 %27 %29 %
Cost of revenue changed as follows:
Change From 2023 to 2024 QTDChange From 2023 to 2024 YTD
(in thousands)
Increased payroll and related costs$1,954 $5,198 
Increased data costs1,182 1,870 
Increased depreciation and amortization709 1,401 
Increased facilities and infrastructure expenses344 1,026 
Increased equity-based compensation114 1,042 
Other items41 97 
Total change$4,344 $10,634 
The increase in cost of revenue for the three and nine months ended September 30, 2024 was primarily due to increased payroll and related costs due to headcount growth, increases in merit-based compensation, and changes in our employee base leading to higher compensation and increased equity-related payroll taxes for vested equity awards. In addition, cost of revenue increased due to higher data costs for acquiring vendor data contracts related to the Wilshire Technology acquisition, increased depreciation and amortization related to the amortization of acquired Wilshire Technology intangible assets, increased allocation of facilities cost due to additional office space, and increased equity-based compensation due to grants of additional awards to employees.
Operating Expenses
Research and Development
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except percentages)20242023$ Change% Change20242023$ Change% Change
Equity-based compensation$8,674 $6,768 $1,906 28 %$26,767 $17,393 $9,374 54 %
All other research and development27,944 25,482 2,462 10 %82,887 72,805 10,082 14 %
Total research and development$36,618 $32,250 $4,368 14 %$109,654 $90,198 $19,456 22 %
Percent of revenue32 %34 %34 %34 %
31
Table of Contents
Research and development expenses changed as follows:
Change From 2023 to 2024 QTDChange From 2023 to 2024 YTD
(in thousands)
Increased equity-based compensation$1,906 $9,374 
Increased technology1,220 3,770 
Increased payroll and related costs1,590 6,173 
Increased facilities and infrastructure expenses190 251 
Decreased outside services and contractors(484)(372)
Other items(54)260 
Total change$4,368 $19,456 
The increase in research and development expense for the three and nine months ended September 30, 2024 was primarily due to increased equity-based compensation due to grants of additional awards to employees, increased technology costs from higher utilization of third-party cloud computing services and other third-party IT services. In addition, research and development expense increased due to increased payroll and related costs due to headcount growth, increases in merit-based compensation, and changes in our employee base leading to higher compensation and increased equity-related payroll taxes for vested equity awards, and increased allocation of facilities related to additional office space. This was offset by a decreased use of outside services and contractors due to lower utilization of third-party consultants on development activities due to a focus on internal hiring of developers.
Sales and Marketing
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except percentages)20242023$ Change% Change20242023$ Change% Change
Equity-based compensation$3,905 $4,010 $(105)(3)%$10,418 $11,221 $(803)(7)%
All other sales and marketing13,984 11,010 2,974 27 %38,951 32,828 6,123 19 %
Total sales and marketing$17,889 $15,020 $2,869 19 %$49,369 $44,049 $5,320 12 %
Percent of revenue15 %16 %15 %16 %
Sales and marketing expense changed as follows:
Change From 2023 to 2024 QTDChange From 2023 to 2024 YTD
(in thousands)
Increased payroll and related costs$2,354 $4,047 
Increased outside services and contractors84 720 
Increased travel and entertainment57 547 
Increased marketing234 766 
Decreased equity-based compensation(105)(803)
Other items245 43 
Total change$2,869 $5,320 
The increase in sales and marketing expense for the three and nine months ended September 30, 2024 was primarily due to increased payroll and related costs as a result of headcount growth and increases in merit-based compensation, increased equity-related payroll taxes and additional employees to expand sales coverage. In addition, sales and marketing expense increased due to higher utilization of outside services, contractors and third-party consultants supporting marketing
32
Table of Contents
initiatives, increased travel and entertainment expense as employees traveled more between our office locations and clients to support sales and marketing initiatives, and increased marketing costs due to additional marketing events and IT subscriptions supporting marketing initiatives. This was partially offset by a decrease in equity-based compensation due to fewer performance-based awards being granted.
General and Administrative
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except percentages)20242023$ Change% Change20242023$ Change% Change
Equity-based compensation$9,937 $16,233 $(6,296)(39)%$27,995 $44,675 $(16,680)(37)%
All other general and administrative12,689 10,035 2,654 26 %37,878 30,770 7,108 23 %
Total general and administrative$22,626 $26,268 $(3,642)(14)%$65,873 $75,445 $(9,572)(13)%
Percent of revenue20 %28 %20 %28 %
General and administrative expenses changed as follows:
Change From 2023 to 2024 QTDChange From 2023 to 2024 YTD
(in thousands)
Decreased equity-based compensation$(6,296)$(16,680)
Increased outside services and contractors606 2,902 
Increased payroll and related costs1,358 2,696 
Increased facilities and infrastructure expenses163 867 
Increased travel and entertainment142 410 
Other items385 233 
Total change$(3,642)$(9,572)
The decrease in general and administrative expense for the three and nine months ended September 30, 2024 was primarily due to decreased equity-based compensation expense related to JUMP acquisition awards which contained a performance criteria related to achievement of a fixed revenue threshold for JUMP revenue during the year ended December 31, 2023. This decrease was partially offset by higher utilization of professional services supporting accounting, legal and human resources related to secondary transactions and acquisition related activities, increased payroll and related costs as a result headcount growth and increases in merit-based compensation, and equity-related payroll taxes on vested equity awards, increased allocation of facilities cost due to additional office space, and increased travel and entertainment as employees traveled more between office locations.

33
Table of Contents
Non-Operating Expenses
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except percentages)20242023$ Change% Change20242023$ Change% Change
Interest income, net$(2,290)$(1,733)$(557)32 %$(6,191)$(4,422)$(1,769)40 %
Tax receivable agreement expense5,344 (566)5,910 (1044)%11,545 6,112 5,433 89 %
Other (income) expense, net$1 $(971)$972 (100)%$(1,113)$(1,205)$92 (8)%
Interest income, net increased in the three and nine months ended September 30, 2024 due to increased interest income on our cash, cash equivalents and investments from higher interest rates, and expansion of investments.
The tax receivable agreement expense is incurred in the period in which we determine that it is probable that payments will be made under the terms of the TRA. Before considering the tax benefits subject to our TRA, we estimate that we will report taxable income in 2024 primarily due to the capitalization of research and development expenses under Section 174 and equity-based compensation expense that has either not yet met the rules for deductibility or has had the deduction limited under Section 162(m) of the Code. Therefore, we expect to utilize tax benefits subject to our TRA and have recorded the associated tax receivable agreement expense. The tax receivable agreement expense increased in the three and nine months ended September 30, 2024 due to an increased amount of taxable income and the absence of a favorable return to provision adjustment compared to the previous year.
Other (income) expense, net relates to foreign exchange gains and losses driven by fluctuations in exchange rates, and gains and losses related to our investments.
Benefit from Income Taxes
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except percentages)20242023$ Change% Change20242023$ Change% Change
Benefit from income taxes$(486)$(274)$(212)77 %$(505)$(184)$(321)174 %
The movement in benefit from income taxes for the three and nine months ended September 30, 2024 relates to a decrease in estimated tax expense for the year, offset by return to provision adjustments for filed tax returns. The decrease in estimated tax expense is primarily related to estimated taxable losses in France.
We currently have a full valuation allowance recorded on our U.S. net deferred tax assets. Given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that in the foreseeable future, sufficient positive evidence may become available that results in a conclusion that all or a portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets, the recognition of the TRA liability, a decrease to income tax expense, and an increase pretax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.
Liquidity and Capital Resources
To date, we have primarily financed our operations through cash flows from operations and financing activities.
As of September 30, 2024, we had total cash, cash equivalents and investments of $336.7 million, including cash and cash equivalents of $228.7 million, short-term investments of $77.1 million and long-term investments of $30.9 million. Cash, cash equivalents and short-term investments primarily consist of highly-liquid investments in money market
34
Table of Contents
funds, commercial paper, U.S. agency securities, U.S. government bonds, corporate debt securities and certificates of deposit. Long-term investments primarily consist of U.S. agency securities and corporate debt securities. In April 2024, we used $40.1 million of cash to acquire the risk and performance analytics solutions businesses of Wilshire Advisors LLC.
As more fully disclosed in Note 14 of the financial statements, on November 4, 2024, the Company entered into Amendment No. 1 to the Tax Receivable Agreement (the “Amendment”) by and among (i) the Company, (ii) CWAN Holdings and (iii) certain affiliates of the Principal Equity Owners, which amends the TRA. Pursuant to the Amendment, the TRA will be amended to provide for the payment of one-time settlement payments (each, a “Settlement Payment” and collectively, the “Settlement Payments”) in a gross amount of approximately $72.5 million. The effectiveness of the Amendment is subject to the approval of the Amendment by a majority of the “Unaffiliated Stockholders” and an absence of regulatory orders or laws prohibiting the effectiveness of the Amendment. The Settlement Payments to be made by the Company will be funded by a cash distribution by CWAN Holdings to owners of its LLC Units in an aggregate amount equal to approximately $81.6 million, of which $72.5 million will be distributed to the Company and approximately $9.0 million will be distributed to certain affiliates of Welsh Carson, each in their capacities as owners of CWAN Holdings’ LLC Units. If the “Unaffiliated Stockholders” approve, the Company expects to pay the $81.6 million in Settlement Payments in the fourth quarter of 2024.
We believe our existing cash and cash equivalents will be sufficient to meet our operating working capital and capital expenditure requirements over the next 12 months, including any payments made to terminate the TRA. Our future financing requirements will depend on many factors, including our growth rate, revenue retention rates, the timing and extent of spending to support development of our platform and any future investments or acquisitions we may make. Additional funds may not be available on terms favorable to us or at all, including as a result of disruptions in the credit markets. See “Risk Factors” in the Annual Report.
The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods:
Nine Months Ended September 30,
20242023
(in thousands)
Net cash provided by operating activities$103,520 $60,505 
Net cash used in investing activities(54,772)(95,613)
Net cash used in financing activities(42,525)(9,924)
Effect of exchange rate changes on cash and cash equivalents706 (27)
Change in cash and cash equivalents during the period$6,929 $(45,059)
Cash Flows from Operating Activities
Net cash provided by operating activities of $103.5 million during the nine months ended September 30, 2024 was primarily the result of our net income adjusted for non-cash charges, including equity-based compensation, operating lease expense and depreciation and amortization and positive changes in operating assets and liabilities. Cash flows resulting from changes in operating assets and liabilities include an increase in tax receivable agreement liability of $9.9 million due to the accrual of current year’s liability and the timing of tax payments for the year ended December 31, 2023, increase in accrued expenses and other liabilities of $3.8 million primarily due to increased deferred revenue for professional services invoiced in advance of services being performed partially offset by payment in the first quarter of 2024 of bonuses to employees earned in 2023 and payments related to our operating leases, reduction of prepaid expenses and other assets $1.1 million primarily due to amortization of prepaid software subscriptions, partially offset by an increase in accounts receivable of $7.9 million comprised of $16.8 million increase from growth in revenues offset by a $8.9 million decrease due to collection of aged receivable balances and increase in deferred commissions $3.4 million as a result of growth in sales leading to higher commission payouts.
Net cash provided by operating activities of $60.5 million during the nine months ended September 30, 2023 was primarily the result of our net loss adjusted for non-cash charges, including equity-based compensation, tax receivable agreement (benefit) expense, operating lease expense and depreciation and amortization, partially offset by net investment in operating assets and liabilities. Cash flows resulting from changes in operating assets and liabilities include an increase in accounts receivable of $18.9 million comprised of $10.5 million from growth in revenues and $8.4 million from aging of receivable balances for certain customers due to short-term deterioration in days sales outstanding which we continue to believe are collectible, increase in deferred commissions of $2.7 million due to higher revenues in the period, reduction in accrued expenses and other liabilities of $6.2 million primarily due to payment in the first quarter of 2023 of bonuses to
35
Table of Contents
employees earned in 2022, timing of option exercises by international employees, payments related to our operating leases, and increased deposits related to leased offices and increase in tax receivable agreement liability of $6.1 million, partially offset by reduction in prepaid expenses and other assets of $4.2 million due to amortization of annual prepaid services.
Cash Flows from Investing Activities
Net cash used in investing activities of $54.8 million during the nine months ended September 30, 2024 was primarily due to the acquisition of Wilshire Technology of $40.1 million, the purchase of $94.0 million available-for-sale investments, the purchase of $3.0 million of held-to-maturity investments and $4.4 million attributable to the purchase of property and equipment, including internally developed software, partially offset by $86.9 million in proceeds from the sale and maturity of investments.
Net cash used in investing activities of $95.6 million during the nine months ended September 30, 2023 was primarily due to the purchase of $111.0 million available-for-sale investments and $4.1 million attributable to the purchase of property and equipment, including internally developed software, partially offset by $19.5 million in proceeds from the sale and maturity of investments.
Cash Flows from Financing Activities
Net cash used in financing activities during the nine months ended September 30, 2024 was $42.5 million, of which $42.7 million was used to pay tax withholding on behalf of employees related to net share settlement, $0.8 million was used for the payment of the holdback liability related to the JUMP acquisition, and $2.1 million was used for repayment of borrowings, partially offset by $2.8 million of proceeds from the employee stock purchase plan.
Net cash used in financing activities during the nine months ended September 30, 2023 was $9.9 million, of which $14.9 million was used to pay minimum tax withholding on behalf of employees related to net share settlement and $2.1 million was used in the repayment of borrowings, partially offset by $4.5 million of proceeds from the exercise of options and $2.6 million of proceeds from the employee stock purchase plan.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements and related notes, which have been prepared in accordance with GAAP. We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities.
On an ongoing basis, we evaluate the process we use to develop estimates. We base our estimates on historical experience and on other information that we believe is reasonable for making judgments at the time the estimates are made. Actual results may differ from our estimates due to actual outcomes being different from those on which we based our assumptions.
There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in the Annual Report under the caption “Critical Accounting Estimates” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, set forth in Part II, Item 7.
Recent Accounting Pronouncements
There are no recent accounting pronouncements during the nine months ended September 30, 2024.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
AUM Market Price Risk
The vast majority of our revenue is derived from fees that are primarily based on the amount of assets on our platform. These fees are stated in basis points, or 1/100th of 1%. Though in substantially all cases we charge a minimum fee regardless of the assets that are loaded onto our platform, our revenues fluctuate based on the value of the assets that our clients maintain on our platform. A total of $7.3 trillion and $6.4 trillion of assets was loaded on our platform as of December 31, 2023 and 2022, respectively. Movements in funds invested between different securities or fluctuations in securities prices or investment performance could cause the value of AUM to decline, which would result in lower fees we receive from our clients.
36
Table of Contents
Interest Rate Risk
We have interest rate risk relating to debt and associated interest expense under the New Credit Agreement, which has been amended to be indexed to SOFR. At any time, a rise in interest rates could have a material adverse impact on our earnings and cash flows. Conversely, a decrease in interest rates could result in a material increase in earnings and cash flows. We estimate that a hypothetical increase or decrease in SOFR of 100 basis points would increase or decrease, respectively, our interest expense or income by approximately $0.5 million on an annual basis, based on our $46.8 million debt balance under the New Credit Agreement at September 30, 2024.
Inflation
Our business, financial condition and results of operations may be impacted by macroeconomic conditions, including rising inflation. Although our operations have been impacted by rising inflation from time to time, we currently do not believe that inflation has had a material direct effect on our overall business, financial condition or results of operations. However, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset higher costs through price increases and our inability or failure to do so could potentially harm our business, financial condition, and results of operations.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective as of such date due to the material weakness in internal control over financial reporting that was disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
In light of the material weakness, management performed additional analysis and other procedures to ensure that our condensed consolidated financial statements were prepared in accordance with U.S. GAAP. Accordingly, management believes that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S. GAAP.
The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud due to inherent limitations of internal controls. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Ongoing Remediation of Previously Identified Material Weakness
Our management is committed to maintaining a strong internal control environment. In response to the material weakness identified above, management, under the oversight of the Audit Committee, is designing and implementing actions to remediate the control deficiencies contributing to the material weakness.These remediation actions are ongoing and include or are expected to include:
•Enhancing risk assessment and control identification procedures for our invoicing systems environment;
•Expanding controls and/or applying other appropriate procedures to address the design and operation of IT general controls within our invoicing systems environment;
•Enhancing the number of employees and our training programs addressing IT general controls and policies, including educating control owners concerning the principles and requirements of each control, with a focus on those related to user access, change management, program development and computer operations within our invoicing system environment; and
•Enhancing and maintaining policy documentation underlying IT general controls to promote knowledge transfer upon personnel and function changes.
37
Table of Contents
As we continue to evaluate and enhance our internal control over financial reporting, we may determine that additional measures to address the material weaknesses or adjustments to the remediation plan may be required. Once controls are designed and implemented, the controls must be operating effectively for a sufficient period of time and be tested by management in order to consider them remediated and conclude that the design is effective to address the risks of material misstatement.

Changes in Internal Control Over Financial Reporting
During the quarter ended September 30, 2024, no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


38
Table of Contents
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are subject to certain legal proceedings and claims that arise in the normal course of business. In the opinion of our management, we are not involved in any litigation or proceedings with third parties that we believe could have a material adverse effect on our results of operations, financial condition or business.
Item 1A. Risk Factors.
In addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in the “Risk Factors” section of our Annual Report. There have been no material changes to the risk factors disclosed in the “Risk Factors” section of our Annual Report.
In addition to our results determined in accordance with U.S. GAAP, we believe certain non-GAAP measures may be useful in evaluating our operating performance. We present certain non-GAAP financial measures in our Annual Report on Form 10-K and each Quarterly Report on Form 10-Q, and intend to continue to present certain non-GAAP financial measures in future filings with the SEC and other public statements. Any failure to accurately report and present our non-GAAP financial measures could cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Class A common stock.
Item 2. Unregistered Sales of Equity Securities.
There were no sales of unregistered equity securities during the three months ended September 30, 2024.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.

During the three months ended September 30, 2024, the following officer adopted a “Rule 10b5-1 trading arrangement”, as such term is defined in Item 408(a) of Regulation S-K. All trading plans that were adopted during the period were entered into during an open insider trading window and are intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act, and our policies regarding transactions in our securities.


Name and TitleDateActionExpiration DateTotal Shares Subject to Plan
Sandeep Sahai, Chief Executive Officer
September 9, 2024AdoptionAugust 30, 2025539,172



39
Table of Contents
Item 6. Exhibits.
Exhibits filed or furnished herewith are designated by an asterisk (*); all exhibits not so designated are incorporated by reference to a prior filing as indicated.
Exhibit
Number		DescriptionReport or Registration StatementSEC File or Registration NumberExhibit Reference
3.18-K filed September 28, 2021001-408383.1
3.28-K filed September 28, 2021001-408383.2
31.1*
31.2*
32.1*
32.2*
+101.INSInline XBRL Instance Document
+101.SCHInline XBRL Taxonomy Extension Schema Document
+101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
+101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
+101.LABInline XBRL Taxonomy Extension Label Linkbase Document
+101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
______________________________
*Filed herewith.
40
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Clearwater Analytics Holdings, Inc.
Date: November 6, 2024
By:/s/ Jim Cox
Jim Cox
Chief Financial Officer
(Principal Financial and Accounting Officer and Authorized Signatory)
41