Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Clearwater Analytics' Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session.

And now I would like to welcome Joon Park, Head of Investor Relations, to begin the conference.

Joon Park

Thank you, and welcome, everyone to Clearwater Analytics third quarter 2022 financial results conference call.

call Cox, Sandeep Chief the Officer; Chief on Jim and Financial me today Sahai, are Executive Joining Officer. After the their call open to a remarks, question-and-answer session. we will

call, participants I and business future to the may, to goals, of provisions facts Securities during would without XXXX. remind for Private Harbor expectations statements expect all and limitation, will, the financial terminology Reform like this using made to the Safe conference including are Litigation any statements. of similar reflect including, pursuant Expectation outlook, which performance forward-looking items, are expressions historical can, future that something identify Act believe, expressions than and other of forward-looking intended

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

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

discussed metrics noted. reconciliation earnings call be are on non-GAAP, A to the we unless press Relations found otherwise in have that website. this can release posted all Investor Lastly, our

With over the Officer, to call that, turn Sandeep I'll our Chief Sahai. Executive

Sandeep Sahai

welcome you, everyone. and Thank Joon,

momentum a end quarter, QX. guidance strong upper with demonstrate X%. revenue Revenue $XX.X and beating effectively some constitutes which the by execute XX% million our to to in continue year-on-year We of the grew growth,

sequential growth of As from significantly, to X% strong we QX. QX showed

displacing legacy new significant announce where competitors. to are happy we very are We wins

Chandler Capital and Insurance Continental Bank Mutual Nevis Management, Asset platform. clients Management, FAI Sonatus Insurance We are General excited to Nationwide other our Limited, Company, of to The Company, several Altos welcome Labs,

management, Sydney-based portfolio expansion to data international drive the power to Bronte reporting, a investment Capital, and in analytics. we ever continue win our with long/short we addition, fund global Australia, where first added In manager

want dislocations to their Others it quickly. market to of trends cost nimble to acquiring when assets confidence. by comes books be Market of more ability new advantage and take with

to of global desire manage to portfolio a Finally, risk rapidly and the the Clearwater drives changing the platform. clients compliance

drivers, these be and continues momentum remains robust positive the our for to demand platform unchanged. Given environment the

increased Gross a we the market. helped solid balance was margin XX.X% are as wage efficiency in pressures inflationary the seeing

Given the Asia FWD teams build that out continue in to are make and and demand strong live insurer leading Asia environment, we is our platform. a our investments operations Europe excited in to on now to announce Group,

margin. of incur that for which a for to in efficient not million, delivering an $XX.X increase XXXX, QX translates a public run time not quarter were an one with associated costs we a business, million being and which an EBITDA majority did from quarter adjusted period. We a XX.X% This $XX.X in the company of is

Our at the adjusted the which continued trend free of flow was cash XX%. of generation cash flow conversion to quarter, free $XX.X EBITDA million solid in

a we impacted rate earnings program In response, includes a to on model the base by discussed the pricing call, AUM launched in a rising increases. the which interest was we our As construct, environment. modify and/or commercial last plus platform

these clients we representing report the with We of construct that last as to and of commercial end happy new to constructively, clients conversations see a week, continue agreed are approach of XX% to ARR. have

we the onboarded. significant that are of program still clients very platform A being new the proud with momentum, representing end agreements ARR portion year. aggressive clients XX% very are similar finalize to by to or of This the booking are remaining achievement. of met disrupting another our expectations has of the expect without We and

that a multiproduct a to strength business, quarter, be that goal. best-in-class for XX% move report to was continues happy a XXth the gross the to our continues company the to core be retention are to back Coming And straight of a adopted metric. Blue private strategic unstructured revenue we by data of normalization The that clients, including a funds Shield Blue reporting number Pittsburgh platform and of been aggregation provides Arkansas at and the automates and and full-service for Cross Foundation. has analytics Clearwater the scale LPx, validated accounting,

milestone sold third we Going solves a Clearwater operational Clearwater are We Prism management announcing France, separately. Technology investment marked to reporting LPx with agreed the acquire to With associated acquisition. many and a with priced ever increased and aggregation, and the modules we requirements. quarter, separate that the industry. reconciliation, first in as software corporate LPx live of data challenges accounting In sell adoption, now a JUMP dedicated company

several JUMP's Moneta Attribution, Asset clients business APICIL a to Linked and in approach One, few. and France in enhances in & markets reasons. entire a the Funds, market Management Europe. solution our Co allows XX-plus leaders, dramatically Rothschild Management, add Management or VYV, Performance value NAV, for Asset Continental clients Asset Reporting for chain. use particular both modular is Groupe and OMS, include need, name XXX Front-to-Back employees we presence for our acquisition Paris, specific JUMP's This significant a which PMS, clients French-speaking to Groupama, of Unit the

Clearwater. to solution also allows who our and Four, desk to of nature insurers clients We PMS, segment a PMS, an reporting. integrated that performance can market. clients. platform, us the management now the service OMS current investment performance Three, now the a management hedge direct can but a a funds, accounting and and attribution including industry, private sell Clearwater, institutional asset current investors, JUMP deliver Two, investment get use banks, have and namely modular end-to-end offices, of OMS family enhanced need from platform robust

view. fund clients that bring extensive asset integrated Europe solution Five, which comprehensive then best-in-class finally, a provide Prism for portfolios. be a several We in unit-linked have class, to can via

ARR transaction We $XXX.X to year-over-year. close million, QX, this in was more In of quarter fourth by XXXX. XX.X% expect up to than which the grew

growth existing of tempered this booking with As because performance, of the value in great decline was you clients. can our the see, asset even

coming rate steady, XXX%, prior retention despite revenue X% are continued than is which headwinds. quarter in market lower at net Our only

we this and and these early comes volatility year next commercial be we impact future reduced. mitigated effect to the into As year, expect headwinds changes have the late of negotiated

our disruptive our platform. strengths and a replacement SaaS clients add is which spark single assets of to cycle multi-tenant additional instance, encourages key our to platform, continues One of to books

clients went to New legacy platform. third replace manual-driven quarter, the Clearwater In Clearwater choose live XX fragmented to continue the and predominantly highly clients systems. on

profitability allows to Our investing in very our aggressively. continued continue and growth platform us

enhance broaden We JUMP that Technology, and machine quality and product the cycle. modular and our our product the key boost entire will And portfolio, the we do. management client invest U.S. everything increase alternative to life offering depth assets is to approach in learning we additional focus, spanning of effort of margin. is pillar investment to managing the an bring A continue which automation to at in improve and and heart of capabilities build breadth market-leading TAM, investments the components

and clients' eager enthusiasts, its than They them innovative be operations. in the also growth earn User more opportunities. Clearwater Not applied prospective platform to about to we significantly we and investment award-winning technologies these Clearwater's learned business In Analytics how capabilities future together September, trust. productivity that Conference, Clearwater to current needs, can and boost delight but we newest of features and and focus only explore Connect, their do brought our XXX hosted and Boise strive on our Annual

Investment Advisors we Chimera Award Clients Insurance, innovative named using CNA Inaugural growth approach platform, our Mutual Corporation, leaders Performa, Morgan Reliance that Management. Life have During with Government and Venerable, and operations standout Portfolio Corporation, Markel including taken Stanley, achieved Unum, Standard Asset Omaha, program, have Insurance, investment an Clearwater's JPMorgan of Qualcomm,

recognized Review Award the Awards Speaking of we Analytics category. in market U.S. Captive an awards, Captive as Clearwater leader the were Software industry Review. the XXXX won also Top and Solution by

proud In external success, to to This development workforce globe. addition we year, our deeply to we our around performance grew we we by care continue share approximately about as that of people. the our XX% the hire and are

people-related and vibrant work. accomplishments our place to make proud engaging, help and QX. many are of an we are in our programs Clearwater We investments dedicated in momentum continued rewarding that to Overall, making

with our financial more to thoughts, our for a to would and over now Chief year quarter to the as quarter our I performance, returning on guidance as well Before provide fourth like Financial XXXX. call Cox, full Jim updated few details third closing hand Officer,

James Cox

to Thanks, we guidance on and in equity Sandeep, and our challenging QX our joining in $X.X gratifying Despite us. by environment. results revenue range reflect a report exceeding results. execution both September, focus thank our the the growth, continued downturn you securities billion. is It all during delivered XX% in continuing for prices fixed These market income

plus with revenue due in price pricing increases. partially the EBITDA, rolled of XX% to a solution, increases million out commission runway. our a capabilities $XXX,XXX, And new and recurring reported and base the market We part testament $XXX,XXX bookings we in we strong offset missing of these additional presently, from changes our to As price to of execution our headwinds $XX.X by have our expense annualized were able model. to guidance market-leading in

quarter noted. Moving note non-GAAP financial be results about unless details basis, or results. now Please to our will our discussed otherwise third a that adjusted on

ARR to XX, from revenue assets client XX.X% and XX, September onto platform increase additional recurring continued of over a again new our due $XXX.X representing annualized strong clients. or million As XXXX, primarily reached increase XXXX, year-over-year, million, an existing September acquisition $XX.X loading

in XXX%, offset from and XXX% pricing offset reduction partially the Net decreases a recurring first XX. was This revenue resulting X% The clients' prices partially fixed increase on which equity growth ARR from decrease, the downturn the revenue of from resulted during annualized June construct which income months was resulted equity our on security in decrease platform, The markets. the by revenue. in the and income has annualized of is retention in fixed XXXX. recurring new the a assets the both in in has decreases X

profit consistent Although for by XXth revenue at including Gross operations net changes, at the be in retention revenue million continue investment and came XX% new retention margin execute consecutive these on continues $XX.X to our in gross Gross client for markets. XX.X%. international growth, quarter remained margin resilient to in gross was quarter. was we market the as impacted

we to result, quarter. margin remain gross in similar expect the a a As at fourth level

by we functionality quarter. XX the headcount and reporting. revenue, $X.X alternative Clearwater will incremental augment of million for increase and quarter with headcount million grew our international development expenses additional our R&D or XX% the were $XX.X in initiatives as These an people Research like third GAAP investments from in additional Prism, R&D LPx QX successfully of

administrative Sales of public initial offering in and basis million revenue, Clearwater September. points marketing September. basis year-over-year million an incremental General Connect of or the up the as in of $XX.X or million year-over-year Adjusted as expenses over $X.X in-person in we QX continue company EBITDA in XX.X% last $XX.X the annualize XX and or our XX.X% up points million was XXXX. XX of quarter XX% revenue, quarter expenses we impact were $X.X resulting hosted to quarter costs of public the revenue, increase from were

Below QX. would Absent the These operating in statement, deduction we on would to incurred of taxable and utilization tax of GAAP projected XXXX, income compensation by we the Tax past and Receivable losses Absent Tax when capitalization tax expenses expense $X.X zero. R&D tax TRA primarily and lieu our tax are million because Agreement, to in million, our income structure deductions, Receivable expense. expense of deductions, Agreement stock-based have expenses and expense $X.X see our and Receivable that Tax be utilize in the subject TRA. increased compensation Agreement Up-C less will you'll we incurred of or in income be have stock-based expenses

by TRA expenses non-operating effectively these $X.X the is about So million. reducing

cash million expenditures. and acquisition, We cash million. Now connection at EBITDA $XX And flow let's included be with cash utilizing holdings turn the with XX%. capital cash the and $X.X the $XXX.X cash, will quarter. in quarter equivalents the $XX.X of cash approximately of and flow we third total to in flow resulting reflecting cash million quarter JUMP investments in $XXX free Technology million a free the of sheet was $XX.X flow. conversion debt, ended of Free to balance net In in million approximately fourth short-term million,

on Focusing XXXX. quarter for the guidance now fourth of

to revenues million approximately million the asset We quarter. expect of guidance This level in acquisition. at million September assumes revenues be to and this $XX.X in the JUMP from $X range Technology prices $XX.X

margin quarter adjusted EBITDA third million, fourth of than the in adjusted million of $XX.X the EBITDA to quarter expect be range XXXX. to higher $XX.X We to be with expected the

XX% $XXX the year-over-year million guidance, growth. XX% to For year in we our million, full expected XXXX, $XXX of to now which increasing the range revenue approximately are representing to be is

We provided measures The to for million all the unchanged. expect range adjusted EBITDA to previously be we of remains million. other in $XX guidance $XX

new third and continue To and of announced our pending win to we quarter, markets, summarize, in acquisition large geographies clients expand including Technology. the new adjacent into logo JUMP

addition, on our with our transitioning to we In very you pricing further satisfied future progress construct. clients updating calls. our forward look We the progress are new to on

I'll turn it to to thoughts. some that, With closing Sandeep provide over

Sahai Sandeep

of only Thank but you, Jim. the happy QX Overall, very year for within with solid sets it we quarter, because how QX, are us not XXXX. execution and calendar up

us Our continued variety transitioning with model, contracting sizes execute selling of allowed continued quality and to the success confidence. have in of all improved progress with in the booking our a industries, clients our of coupled and to and commercial across business pricing

to increasingly to while investment management serve mission us in prospects innovate the being eventually acquisition able complex full revolutionize of clients continue for life and to needs, world Investing strategic our the of our Technology investing. and now to cycle expanding the will allow JUMP

it With the for me let that, turn operator to over questions.

Operator

first The Stanley. the Instructions] for from today's [Operator Faucette call of question Morgan James comes line from

Michael Infante

Infante more color conversation where bit Michael on get pricing for wanted a I to James. just try little It's to stand. the

if throughout on clients how that of today, the and you 'XX? And what total trending envision of of revenue new of model? percentage balance sort guess percentage pricing what you are live do I So could, the

James Cox

Michael, much. thanks is so This Jim.

done XX% construct. end that rate of the by on revenue recurring model expect as So be basis. of on That's is kind XX% or of we the mentioned, Sandeep annualized the all of our the run new to approximately year. in commercial a And new

For we which we a waves, in program, of count context, QX, this when announced more talked about view. was client

That -- had recall, And QX, to Q about had X. with if gone up we X our in number then we're of X, we obviously and XX% we Wave XX% communications has waves. XX% you And talked there. at how only to up which QX. so XX% the spoke Michael, and And we was end at Wave sophisticated when that of most is largest clients, before, in

to of reasonable So is to color? client that's impacted -- kind a the and year. do proxy of that overall want you the a It's continue a grow revenue expect to XX% blend for Sandeep, but kind throughout some end of the of number give count, little the

Sandeep Sahai

Yes.

contractor, beginning of end applicable mean with with, Michael, the thing, have the when yet, and right? we that they a it saying applicable next signed is to doesn't year. Just fully are those So of we're one clients XX% contract the more the be of are new going the towards year

I So yes, make nuance you sure want also. just to that understood

Michael Infante

Got I capabilities the just geographical on That And clear the of call diversification and maybe think PMS if -- front from the announcement. couple back I right. OMS ago the months to Maybe hosting benefits, a weren't you center, sense. Appreciate aside then that. of lot process, IPO and makes acquisition JUMP, quickly just the guys a appreciate maybe it. on on really

to penetrate asset guess, of or sort today? about a more of be what management meaningfully how you you more I JUMP allowing relatively think quickly environment sort difficult do could So

Sandeep Sahai

Yes.

how let you and thank it. try for see me So, asking we But that. explain

I think some they're OMS frankly, happens own today. you manage not was that their not starting PMS look itself book. attractive, when attractive be clients, would at But by and to what and insurance is even

own get with their very and good becomes PMS, book cross-sell, their accounting manage So very a they us then add-on if a to us, and will. additionally once you they from good have OMS

was So point one. that

we when of front that the obviously to right? have Michael, was, offices, management they the some private end-to-end about family did an tend platform, two end. funds, industry think banks, And integrated you point buy not hedge asset part The

allows So having it to that us just not in Europe bring U.S. but capability bring JUMP to here the

things So difference. made those a

a big which really one, Michael, performance bought is or platform. was conjunction other The around Clearwater with in separately have They performance. module, good often the

is us of buy. performance a something current And enhanced would this so gives performance, clients already while and we think which do our we number

this but current capability of with a do work funds go And is funds. is to capability. unit-linked leading sell our using can as have they really good JUMP, client base and unit-linked we back Europe. a And in fact, And Lastly, we prospects. market with limited very it matter and

it done really, why hard, So that's think it and work to as I reasonably nicely, really fit as pretty we get we could. we think quickly

Michael Infante

Thanks, it. Got Sandeep. Thanks, Jim.

Sandeep Sahai

Yes, thank you.

Operator

The next from the Davidson. Heckmann today ahead. Please comes line Peter go question of from D.A.

now line Your is open.

Peter Heckmann

the for Thanks taking afternoon Good gentlemen. questions.

just I a think the about you little the a basis if now today's and FX. and Just I'm deal revenue revenue growth annualized call, me but XXXX, wrong, to of had prepared bit on an bit talked us But got rates, on for correct in on given are give of shifting little on you ballparking margins call? XXXX we've and JUMP, terms that

James Cox

we've So The it in close so that gave will $X fourth I fourth QX. the just very quarter. approximately the to Peter, transaction we exactly think was we provided, when the approximately close we're what we in million in going We're quarter. know don't is reason it confident why

forward, kind look of, an of basis. they've run had roughly we growing IFRS nicely it, that they've $XX call million, rate historically, been As and on

consistent, we you if growth. kind so to of And can build the kind that's assume of

we're to on the close JUMP and actually until guidance give reluctant we do transaction specific I that think work.

is it in in we'll be fulsome in what grow, of providing think much how to So our that our kind XXXX. XXXX and organic JUMP I strong otherwise growth you guide as being relates explicit grow

Peter Heckmann

market effect, trailing right, of X of in to you retention up XXX quarter headwind mean the that from And the the but action? three a cumulative revenue impact the net talked have quarters, first to And really -- follow on basis the in about point I Okay. we'll that when was then. terms quarter,

James Cox

that the market over time. effect of of period cumulative action that That Yes. is

Now commercial that have believe I would think been the had more not constructs. modified we impact significant that, we

And -- of changes contract the that impact so is what contract market after after you're the seeing impact change.

Sandeep Sahai

do I Peter, if growth good look that look, as that, what delivering as Now think the not XX% headwind, I that answer. add business just you absolutely X% expect, this this to this just XX% we are would you has that think year-on-year, just at could robust to you'll we math, a that's when the with enough right? if we been see year,

on year. the is X%, if be we really mitigated So past business will worked below volatility below that, But what is well. we next you so and get really, have done client performing contracts, expect essentially to the obviously see you this the itself

that's point trying we're the So to make.

Peter Heckmann

That's Okay. only clients but already correct? me, I And also of were lastly, very a think JUMP clear. small just the clients, Clearwater handful remind

James Cox

A very, very small handful.

it's count XX roughly geography. say would client was You and that French the French-speaking in

Sandeep Sahai

it That are gives really you represented XX where all, at that interesting was were that is what you going a was these and clients. to about not geography we well

So takes you get which it to a market presence build. immediate while in the

check So JUMP many that's so a sort of just boxes.

Peter Heckmann

Right. Right.

I it. Okay, appreciate

Sandeep Sahai

Thank you.

James Cox

Thanks.

Operator

the The Rishi from RBC. go line Please Jaluria next from today of question ahead. comes

is now line Your open.

Rishi Jaluria

you I Thank and taking appreciate on color all today's questions incremental the my so for wonderful. Oh, much call.

First, I go user the wanted to to conference. back

there, that about was and listen road to things fact shape map we're seem their you that really the Clearwater like when their ability So out to time. the to of talking over to one feedback customers they the

want COVID, really that there current not features you this saw products, doing out a that products quick anything future it of period to of in from I'd of got after stood your customers then having you And a functionality I've because kind that either to in So feedback terms was of be you'd discuss? conference of curious, follow-up. or terms hosted

James Cox

Sure.

them. you coming see I way, was kind out, great, of what clients compelling around that next amongst were tangible in the at that as seeing doing way, of road But our what a by there by that for benefits be folks the think kind timely client map welcome that is you'll Rishi, way by think and are was for well. alignment clients where to all the fruition to all the of so Hopefully, of and was come conference. we're the was that see -- I thanks -- to going, great

provide talk But I to one way. platform in socks yet thing flowing assets we off, with this about even But the $X.X that even opportunity investors. on their provides nascent, insights it anonymized our and through really knocked trillion our it's think the clients that an us don't and is to

of start a think you few insights sessions, we sessions, sessions, machine opportunity. some the in really I sprinkling that learning in some smaller some different shared and exciting broader it's in just a intelligence, artificial applying of a once

clients sort see co-innovation could Sandeep, even imagining, reaction about how even to on And exciting. and us it to the personally really how an how go that useful them opportunity that and hear could from with work ahead. they without was me of

Sandeep Sahai

Yes.

I One under we a to of was of lot the our clients issue pressure. things continue be think saw

to they manage to So continue more aggressively to costs be pressure under do more.

So in requests we adjacent of else Clearwater about really got to spaces operations. can do lot a improve what their

relief So a frankly, to of a problems. interest road our and just address of lot it platform their in lot our invest map, to continue of better more were going to in we sort that make of

of doing, think enjoy So and obviously meeting what doing, I great here we get are were really customers what frankly, conference. really change good. was some a we people. But and having just validate We really,

Rishi Jaluria

really And maybe then That's specifically. one Jim, helpful. Great. for

contracted that as to XXX%, will more closer based than disclosure more and it to the If and AUM, wanting variable model or kind pricing on be since highlighting of new you about consider talked the on XX% of end closer of happens slowly subscription the that by revenue you kind So relevant AUA rather introducing the the RPO year. would model? and get more base you upfront a get of

James Cox

that walk of just pieces are baselined understand is that. that commercial the what so the me through so construct new everybody you folks Let on that

it's that if we call that upfront. fixed based is monthly So we fee client it, billing the the doing way really AUM annual model, that which to build by a business. their actually we move right, reflects, the has but under full on But the piece, would that, base view book annual presently, an RPO on which were first current annual to of an continue fee,

So one. step that's

So we kind for a set mark that. of base

secondly, fees the the balances. AUM the that element of that's continues clients' growth Typically, there based Then of to a their of on be business. scaling through

that core box The sell drawn is there's us about we've is really lastly, of what separate Clearwater a And piece drive third to then to enabling that base annual to that discretely. a increase through. fee continue modules

I would as so incredibly we clients, I say, model new we -- will say, one the And of Rishi, for continue thing been more has our think to apologize, acceptance -- the I'll and this high. I

clients. So terrific -- that's our well going our been to as back as with existing

of to And would pivot to step that so we annually fee that in invoicing annual final would RPO we be as base that advance, move that model. when

Rishi Jaluria

really That's Thanks Sandeep. answer. it. Got much, appreciate Jim thorough so helpful. the and Really

Sandeep Sahai

Thanks, you. Rishi. Thank

Operator

The next Mielczarek ahead. go question today comes from the from line of Blair. Kamil Please William

line now open. Your is

Kamil Mielczarek

for question. Thanks my everyone. Hi, taking

the change pricing model? any, in how I the conversations, existing nice the where there. the market how being is given with to want strong progressing. more it's the provide on most received some just X complex more progress pricing model, maybe you the these by up approach how to see Wave you on are First pushback, if this customers? you And follow color on is seeing favorable the the Can larger

Sandeep Sahai

you, to question. pushback. the I've -- real So Kamil, got think I for we say thank don't see

the been engaged they've us, take a client, clients longer. does to it almost receptive, I but have think literally with

takes clients, there you the numbers resistance And to the involved are is X when It done think Wave about obviously it a weeks. therefore, while. getting in X talk I higher.

So it Jim, the you or We in of Maybe, seen difference nature that's how it. haven't. don't have would It's see? longer. just just market know a might there's we any we I conversations. where characterize constructive think whether takes I something

James Cox

management, corporate insurance little And the is more I that. kind to in a through acceptance walk asset think almost time it takes universal. in and of

Sandeep Sahai

Yes.

fair. think that's I

Kamil Mielczarek

is how That's on on helpful. the It's us you if seen demand in in any just And to what you seen question And have update months? have Europe, can traction? could follow most customer on a trending I countries there? good recent And hear. conversations changes up you

Sandeep Sahai

Yes.

a really to Europe continues So have pipeline. strong

I now our international. think revenue is XX% disclosed of that we

that's you So huge last remember. from year, if

So Europe. really with we've been successful

We little hire to is takes the set really quickly. on and are why the can testimony in made up the these all think people, while acquisition the bit we that's Frankly, JUMP and Europe. sense. that a It we just of fact very so offices bullish a acquisition Europe to grow much

So, we there. get strong look, expect to very continue to growth

year-to-date, logos think I new we've in added Europe. XX

about have new we So there. logos XX

in. So, one all, bit a have. we insurers client Australia. could our in larger live. got of as them isn't it's in it I bit And we going little the first a with Asia. calling there, this as Also in excited think well a team it that is this with about is also look, all little We're had excited mean we FWD go

we international is going well. really, so we all which the quite think business And of

Kamil Mielczarek

hear. color. great I the appreciate That's to again. Thanks

Sandeep Sahai

Thank you.

Operator

question The today Chase. Please from line of comes the JPMorgan Ella from next Smith

ahead. go

open. is now line Your

Ella Smith

My about to this say possible question. Would versus Thanks would imply is that guidance new overall pricing? of it is so Hi. And year-end? increase revenue growth you so by due mostly my much first your acquisition for XX% your would XX% year-over-year client client count be year-over-year. actually taking question, north

James Cox

from So new we and definitely assets -- adding also clients are growing assets client from the to growing from acquisition, we're platform.

of as as Ella, upmarket. evolved we to kind so company, a go have continue we And

-- than up It is $XXX,XXX, we going XX%. is looking you are total you right, see which that XX% is start drive those ticking as that mechanism those And disclose up. larger clients as That an that start see are well. client the larger But million, annual clients, when see up you'll $X the on are basis, you clients larger share not to really our going you'll to at count that than see, so our of larger And that nicely. than operate as $XXX,XXX, growth. you

Ella Smith

clear. from... very That's you. And Thank

James Cox

XX%. it will Perhaps, it will Perhaps, be... be

Sandeep Sahai

Obviously, to... Yes. it's going Yes.

James Cox

than XX%. XX% like We Yes. more

Sandeep Sahai

Yes.

XX%. between think I and guiding to you're XX%

yet. quite So the you're XX% not ready to concede

Ella Smith

thank believe September, And clear, you you with the IFRS if licensing. nuances pertains about the discrepancy the referred my accounting any the have I I an to you. Very wondering JUMP call second associated to Great. during in due acquisition. updates was to acquisition? question

James Cox

thing GAAP Yes. We're kind JUMP U.S. we as through full with to Clearwater continuing able diminishes GAAP. that closed. as IFRS And the QX just a be bring into through And work over to give debrief after time, work once does, closing obviously, that what the solution process. think of but we still to move as we've working you through we cloud, I of U.S. the consistent we're them with that we'll that

Ella Smith

you much. very it. Thank Great. I appreciate both

Operator

today question from Fargo. line comes the next of Please Wells from Michael The Turrin

ahead. go

Your line open. now is

Michael Turrin

Hey, -- appreciate the quarter. are saw to revenue last mean is taking net retention Thanks, close rates you great. Great. be least what the to stabilizing question. number seem here, I at retention the

You're clearly how these holding gross the the strong there, net around sits? does rates all? expect levels to trajectory expected again. number embarking given the transition mostly to fair Is where And yet between on the that revenue on the at stabilize it you're retention gross retention is just closing impact gap if

James Cox

Yes.

great a I think point. that's

that a north think very of start the -- levers pull to problem. -- this I of we net And the And would lot of short all modules through move we think retention move we think we have to the do I JUMP to impactful that bottom. you have have have, revenue we've event, of frankly, fruition, you any seen kind as we coming so acquisition I think and we think I to think of there's when additional number macroeconomic

Sandeep Sahai

absolutely on the an changes next on have and the to quarter. have expect impact continue QX Yes, part worked these work start all latter contract no, beginning we to towards to in of QX, would of I and of

to So something we absolutely obviously, barring expect the that in number strange And improve. happening sphere. macroeconomic

yes, numbers. we're So stabilize, to not of going to number. we're happy is happy north be with Everything but the these

Michael Turrin

the the little a sense. in on the guidance, Understood. beat. well. just Obviously, assumed That you're makes there taking top And touch bit as of a line up there's on JUMP

tied EBITDA of to impacts the the JUMP just moving of that Is mindful versus line. to as just a EBITDA, there the other tandem or us mostly with well to sort the are touch fine-tuning top up on in side? for that be On number

Sandeep Sahai

want I anything have don't on there. of say in no, JUMP the EBITDA, Yes, just to we

exact expect close Jim we JUMP that closing, in forecast. like all hard day a QX. is Just said, of to But to

question the of really look, EBITDA? in our going sort ability investing revenue on the high with bulk manage it plan, is of we're it. that's really is the because then is on So what's and people, frankly, to

is to So in how Europe, do question Asia ramp operations out what is this you and really is quickly up want that and about. teams then the

below EBITDA with we QX is to want number. are we about go any -- this Where further don't in

are. that. we QX last if So this year, XX.X%, expect that Michael, we than we come we better that do a back it you to XX% lower. said, we've higher is about where and not like expect look number to at this given And our guidance, we And meaningfully higher, is than what it to and had right

Michael Turrin

Thanks Sandeep. me, follow-on the much. very questions for asking you Appreciate

Sandeep Sahai

is yes, we're Jim, was XX% to -- what QX? it's was almost at QX like guidance the midpoint. guiding what

James Cox

XX%. XX%, Yes. Yes,

Sandeep Sahai

XX%, XX%.

like, We are. not this we the we XX%, is number XX.X%, like So that. saw north like when the no, and of we're we

James Cox

an With out all really nuances think but the we from also Clearwater have think We Connect, we'll around ability been some that, employee we we manage. little and investing has with more had costs nuances I that, the profitable to EBITDA will the we the and tax responsible, continue which to be caught quarter to, vesting commissions, margin a and QX had perspective. the fruitful, but think RSUs we of understand some bit, us

Sandeep Sahai

thought that we that fact our... means like commissions But the quarter. higher Michael, in the would paid you we

Michael Turrin

point. much. very also good a That's Thanks

Sandeep Sahai

you. Thank

Operator

from ahead. next comes question Schwartz Brian today The of the line go Please from Oppenheimer. Instructions] [Operator

Your line now is open.

James Cox

Brian, are you...

Operator

Brian, your you Brian? line may is -- be muted,

Brian Schwartz

Can you Operator, you unmute unmute me? me? Okay. can

James Cox

We can hear now.

Joon Park

it's Now done.

done. it's Now

Brian Schwartz

me the the wanted unmuted on in that Sandeep, Someone won follow quarter. the up big kind logos you the to I in of sky.

possible automation from the versus, which what say, it's customers drivers, us rank the gave heading on wins. very in them we're budget platform the to save tight wondering for a those in organization out replace environment legacy help But are You coming is parse looking to introductory driving are little them I when that into to about is sense other that drivers in the these buying architectures that commentary a productivity? in more really if driver you, or your more bigger money a to was increase

Sandeep Sahai

Brian. Yes. Thanks,

because we watchful. So out very more coming obviously management every watchful team, the simply news have economy, just of been of the being think I is

who it efficiency, is better, to now, need needs that. to segment the a prospect client right right? they The the they and costs manage need things X need base is So right? it big definitely funnel first quickly So which that the now, manage driving are of base, people one

So one. that's

books is looking asset which buying Second one, from these other market owners. is people really at dislocations interesting and are

into hurry, on, there's getting bit for impossible new lots want go set people a classes buying a books, to a that and architecture and in asset do up system to So brand-new that. acquisitions going of of it's

buy tomorrow, whatever. Clearwater makes nimble. to they They can and them Coming assets assets Germany or very can buy in mortgages

people and a risk So third seems sole of and from from audit on to is calls get just and the that, need people this be And that there's it saying, to with pushing getting I doing are audit committees they literally committees thing environment. are definitely volatile risk your rapidly in that. class order changing reason who the

it And the drives it management just to being is better control a and so and day-to-day market. risk managing on that better of responsive

what's still it. that doing is where I are and of scale driving cases financial X you it. And those drives so large transformations have some one people mean

bringing the wow, And sometimes, they a were and you go company another this will it, to do currently way saying, and client is us not have to awarded along.

majority a these you would if about I one hazard vast elements, So fall there's of would into of prospects our think these. X

Brian Schwartz

one Jim. then for And follow-up

the Just today? we at from here assume in and are customers going? then, on QX to a guidance the where the QX, factoring you still the are it guidance see still fair contemplated here macro old And headwind thinking for to pricing that the are be is going Jim, plan, about AUMs initiated that, there's slight that all you as

James Cox

Yes.

and the did it expected did that looked to into today they do Fed we I think do folks it QX looked and the what looked guidance, going we consider was perspective like we what them of what -- exactly the as of to so understood and as when we we guidance. part the at

Brian Schwartz

you for my questions. Thank taking

James Cox

Take care, you. Brian. Thank

Sandeep Sahai

Thank Brian. you,

Operator

Thank you. There this are no further at questions registered time.

closing to back So for pass the conference ahead. over Sandeep I'd to go remarks. Please like Sahai

Sandeep Sahai

just all Clearwater. Look, for to interest you continued in your I wanted thank

performance. had year-to-date we've think a really I good

but and continue had found for excited very really target I headwinds, we a we've that deliver year, think that. XX% growth to rate that are we we the about

right are think while contractual very changes all the also being throughout year. make I excited booking We amount about, these the really able to

done if calendar really subject hope market, not to was we for be would that to continue of we the a XXXX really and quite had And we to year important that is the mitigate this, bit. that volatility

So all. your interest and you. your thank I time. you Thank really appreciate

Operator

your you Thank Thank conference concludes all. call. today's This participation. you for

You may now disconnect your lines.

Clearwater Analytics (CWAN) 2 Nov 222022 Q3 Earnings call transcript