Q1 2024 Earnings Summary
Reported on Jan 9, 2025 (After Market Close)
Pre-Earnings Price$15.82Last close (May 1, 2024)
Post-Earnings Price$16.50Open (May 2, 2024)
Price Change
$0.68(+4.30%)
- The company's Net Revenue Retention Rate (NRR) increased to 110% in Q1 2024, driven by a best-ever gross revenue retention rate of 99% and a 25% contribution from cross-selling new solutions, indicating strong customer retention and expansion opportunities. , ,
- Successful integration of acquisitions, such as JUMP and Wilshire, is expanding the company's total addressable market and contributing to growth, with six new clients won for the Clearwater JUMP platform in the quarter. ,
- International expansion is showing positive momentum, with new contracts signed in APAC, Germany, France, and the UK, supported by new leadership adding value and building up the pipeline, suggesting significant growth potential outside North America. ,
- The company anticipates lower revenue growth in Q2 2024, projecting 17% to 18% growth compared to 21% in Q1 2024. This suggests a potential deceleration in momentum. The reduced guidance is partly due to a significant client going live earlier than expected, pulling revenue into Q1, and the company expresses concern about projecting too high for Q2.
- New product initiatives are not yet contributing significantly to revenue, and there is uncertainty about the timing of their impact. The company acknowledges that "new products are a little bit difficult to predict exactly when it'll happen and how it'll happen", indicating potential challenges in achieving their target net revenue retention rate of 115%.
- The plan to engage in more systematic mergers and acquisitions introduces integration risks and potential distractions for management. The company notes, "We did announce 2 really senior executives we've brought in the company to do this on a more systematic way... So I think you should expect us to do... 2 tuck-ins in a year or whatever that number is", which could pose challenges in maintaining operational focus.
Research analysts covering Clearwater Analytics Holdings.