Executive Summary

Clearwater delivered record Q4 revenue of $126.5M (+27.7% YoY) and record NRR of 116%, with adjusted EBITDA of $41.7M (33.0% margin). GAAP EPS spiked to $1.63 on a one-time $472M tax benefit from releasing the DTA valuation allowance; non-GAAP diluted EPS was $0.13 .
Results beat company guidance: revenue by $6.3M and adjusted EBITDA by $3.2M; ~$3M of NAIC-related work pulled forward from Q1 aided Q4, with offsetting third-party costs and no ARR/NRR impact .
Initial 2025 outlook guides to 19–20% revenue growth ($535.5M–$542M) and ~34% adj. EBITDA margin; Q1’25 revenue guided to $125M and adj. EBITDA to $41.5M. Guidance excludes Enfusion, expected to close in Q2’25 .
Strategic catalysts: 116% NRR achieved a year early, margin expansion runway (management now targets gross margin “north of 80%” long term), and the announced Enfusion acquisition to build a cloud-native front-to-back platform (cross-sell and synergy optionality) .

What Went Well and What Went Wrong

What Went Well
- Record growth metrics: revenue +27.7% YoY to $126.5M, ARR +25.3% YoY to $474.9M; NRR reached 116% (from 107% a year ago), with GRR at 98% .
- Profitability outperformance and trajectory: Q4 adj. EBITDA $41.7M (33.0% margin) and full-year margin expansion; management reiterated 2025 plan for another 200 bps EBITDA margin increase and long-term gross margin “north of 80%” .
- Strategic narrative: Enfusion deal seen as “game changer,” enabling a unified front-to-back platform; early customer enthusiasm and complementary strengths (front office vs. middle/back office) highlighted by management .
What Went Wrong
- GAAP optics skewed by one-time tax item: Q4 GAAP net income of $420.3M driven by a $472M tax benefit from releasing the DTA valuation allowance; underlying non-GAAP EPS was $0.13 diluted .
- Cash flow headwind: Q4 operating cash flow was -$28.9M due to $79M of one-time TRA termination and fees; free cash flow -$29.8M .
- Sequential GRR ticked down to 98% (from 99% in Q3), and Q4 included ~$3M of NAIC services pulled forward from Q1 (non-recurring to ARR/NRR), complicating pure run-rate interpretation .

Financial Results

Performance vs prior quarters (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$106.8	$115.8	$126.5
YoY Revenue Growth %	18.8%	22.4%	27.7%
GAAP Gross Margin %	72.0%	72.9%	73.5%
Non-GAAP Gross Margin %	77.5%	78.5%	78.8%
Adjusted EBITDA ($M)	$33.4	$38.3	$41.7
Adjusted EBITDA Margin %	31.3%	33.1%	33.0%
GAAP Diluted EPS ($)	$0.00	$0.02	$1.63
Non-GAAP Diluted EPS ($)	$0.10	$0.12	$0.13
Cash from Operations ($M)	$43.9	$49.7	-$28.9
Free Cash Flow ($M)	$42.4	$48.1	-$29.8
Cash, Cash Equivalents & Investments ($M)	$297.6	$336.7	$285.8

Q4 vs prior year (select metrics)

Metric	Q4 2023	Q4 2024
Revenue ($M)	$99.0	$126.5
GAAP Gross Margin %	71.4%	73.5%
Adjusted EBITDA ($M)	$30.0	$41.7
GAAP Diluted EPS ($)	-$0.02	$1.63
Non-GAAP Diluted EPS ($)	$0.10	$0.13

Key KPIs

Quarterly progression

KPI	Q3 2024	Q4 2024
ARR ($M)	$456.9	$474.9
Net Revenue Retention (NRR)	114%	116%
Gross Revenue Retention (GRR)	99%	98%

Year-over-year snapshot (as of Dec 31)

KPI	Dec 31, 2023	Dec 31, 2024
ARR ($M)	$379.1	$474.9
NRR	107%	116%
GRR	98%	98%
Clients ≥$1M ARR (count)	86	100
Assets Processed Daily ($T)	$7.3	$8.8

Vs prior guidance (company-issued)

Metric	Period	Prior Guidance	Actual	Delta
Revenue ($M)	Q4 2024	$120.2	$126.5	+$6.3M (beat)
Adjusted EBITDA ($M)	Q4 2024	$38.5	$41.7	+$3.2M (beat)

Note: ~+$3M of incremental Q4 revenue was NAIC-related work pulled forward from Q1; associated third-party expense also recognized; excluded from ARR/NRR .

Estimates vs actuals: Wall Street consensus from S&P Global could not be retrieved at this time (SPGI request limit exceeded). We therefore benchmark against company guidance for Q4.

Segment reporting: Clearwater does not provide segment revenue disclosure in these materials; results reflect the single SaaS platform and operating model .

Guidance Changes

Guidance issued on Feb 19, 2025 (excludes Enfusion impact)

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q1 2025	N/A	$125	New
Adjusted EBITDA ($M)	Q1 2025	N/A	$41.5	New
Revenue ($M)	FY 2025	N/A	$535.5–$542	New
Adjusted EBITDA ($M)	FY 2025	N/A	$182–$185	New
Adjusted EBITDA Margin %	FY 2025	N/A	~34%	New
Equity-based comp + payroll taxes ($M)	FY 2025	N/A	~106	New
Depreciation & Amortization ($M)	FY 2025	N/A	~13	New
Non-GAAP effective tax rate	FY 2025	N/A	25%	New
Diluted non-GAAP share count (M)	FY 2025	N/A	~263	New

Footnote: Guidance explicitly assumes no effect from the proposed Enfusion acquisition .

Earnings Call Themes & Trends

Topic	Q2 2024 (prior-2)	Q3 2024 (prior-1)	Q4 2024 (current)	Trend
GenAI, unit economics	Investing in GenAI; non-GAAP GM 77.5% and margin expansion; PRISM/JUMP cross-sell	GenAI woven into ops; NPS 60+; preparation for NAIC changes	COO efficiency, client deflection; mgmt targets gross margin “north of 80%” LT	Improving profitability, execution
Regulatory tailwinds (NAIC)	Noted risk & performance expansion (Wilshire)	First mover on NAIC 2025 changes; client automation	~$3M NAIC services pulled fwd to Q4; persistence of reg. tailwind	Ongoing tailwind; Q4 pull-forward
NRR/Back-to-base (1–4 bps)	NRR 110%	NRR 114%; cross-sell maturing; AUM tailwind in Sep	NRR 116% (year early); upsell 7%, cross-sell 3%, price +~5%	Sustained progress toward 115%+
Partnerships & data	Snowflake integration announced [130] (from doc list)	Snowflake use cases and open architecture vision	Data strategy toward single “golden truth” across Enfusion+CWAN	Deepening ecosystem, architecture
M&A (Enfusion)	Wilshire analytics closed Q2	Flexibility (TRA termination proposal)	Enfusion $1.5B announced Jan 13; complementary front/middle/back; synergies	Scaling to front-to-back
International expansion	New EMEA leadership, global wins	EMEA/APAC hiring; Hong Kong office	Enfusion footprint to accelerate EMEA/APAC growth	Broadening geo reach
Pricing model	Base+ stabilizing downside, keep upside	Discussed normalization of price increases	Explore evolving Enfusion pricing to drive NRR	Pricing sophistication rising
FX/cost	N/A	N/A	FX de minimis to EBITDA; India presence a mild cost tailwind	Neutral to mild benefit

Management Commentary

“Q4 2024 has been nothing short of extraordinary… record revenue of $126.5 million and a record net revenue retention rate of 116%… Our announced acquisition of Enfusion is a game changer… to offer a comprehensive front-to-back platform” — CEO Sandeep Sahai .
“Our gross margin grew 190 bps YoY… we now believe that the long-term target for gross margin is north of 80%… we expect to deliver another 200 bps in EBITDA growth in 2025” — CEO .
“There was about $3 million in incremental revenue in the quarter [NAIC project]… associated expense was also booked in Q4… not included in ARR or NRR” — CFO James Cox .
“For FY 2025, revenue $535.5–$542 million… EBITDA $182–$185 million (~34% margin)… Assume no AUM tailwind” — CFO .
“Both Clearwater and Enfusion share next-gen single-instance, multi-tenant platforms… complementary strengths (front vs. middle/back)… priorities include unified data, cross-sell, and cost synergies” — CEO .

Q&A Highlights

Enfusion integration/customer interest: Clients excited by unified pre- and post-trade; integration eased by both platforms being cloud-native single-instance .
Margin durability with GenAI: Management expects GenAI to be a tailwind, not a headwind; fast payback, continued margin expansion path .
NRR drivers and sustainability: Q4 NRR 116% aided by ~7% upsell, ~3% cross-sell, ~5% price; target is to deliver ≥115% reliably vs one-off .
Guidance framework: FY25 guide excludes AUM tailwind; company prefers high-confidence guides and to build through the year .
Data architecture end-state: Multi-phase plan toward a single data plane/security master across front-to-back to eliminate reconciliations and enable risk/compliance leverage .

Estimates Context

S&P Global consensus could not be retrieved at this time (request limit exceeded). As a proxy, Q4 actuals were above Clearwater’s own guidance: revenue by $6.3M and adj. EBITDA by $3.2M, with ~$3M NAIC work pulled forward in Q4 and associated third-party costs recognized .
Implications for models:
- NRR at 116% (year early) and initial FY25 guide (19–20% growth, ~34% margin) suggest upward pressure on revenue/margin trajectories vs prior expectations that assumed slower NRR ramp and lower margin .
- Q1’25 revenue guide ($125M) is strong despite ~$3M NAIC work realized in Q4; guidance excludes any Enfusion contribution and assumes no AUM tailwind .

Key Takeaways for Investors

Durable growth with improving unit economics: Three straight quarters of accelerating revenue and expanding margins; long-term gross margin target revised to >80% .
NRR inflection achieved early: 116% reflects upsell, cross-sell, normalized price, and modest AUM tailwinds; focus shifts to sustaining ≥115% each quarter .
2025 setup: Initial FY25 guide implies ~19–20% growth and ~34% adj. EBITDA margin without AUM tailwind or Enfusion; room to raise if macro/AUM and cross-sell outperform .
Enfusion as a catalyst: Cross-sell into Clearwater base (and vice versa), front-to-back platform vision, and cost synergies present medium-term upside; integration plan and unified data strategy are in place .
Cash flow normalization expected: Q4 FCF was impacted by one-time TRA termination; underlying collections improving (DSO down) and net cash position remained strong .
Watch list: Enfusion close/timing and integration KPIs; NRR consistency; AI-driven efficiency and Insights monetization cadence; regulatory change cadence (ongoing tailwind) .

Appendix: Other Relevant Q4 Period Press Releases

Clearwater to Acquire Enfusion for $1.5B announced Jan 13, 2025 (strategic expansion to front office) .
Leadership/APAC growth and capital actions (Q4 corridor) are reflected in press releases; core financial outcomes summarized above (from document list timeframe).

Clearwater Analytics Holdings, Inc. (CWAN)·Q4 2024 Earnings Summary