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Mar 31
Clearwater Q1 2025 Earnings Report
Clearwater Analytics announced its financial results for the quarter ended March 31, 2025, reporting record quarterly revenue of $126.9 million, up 24% year-over-year, and Annualized Recurring Revenue of $493.9 million, up 23% year-over-year. The company also reported a Gross Revenue Retention Rate of 98% and a Net Revenue Retention Rate of 114%.
Key Takeaways
Clearwater Analytics reported a strong first quarter for 2025 with significant year-over-year growth in revenue and Annualized Recurring Revenue. The company maintained high retention rates and saw substantial increases in net income and adjusted EBITDA, indicating improved profitability and operational efficiency. The quarter also marked the completion of several strategic acquisitions aimed at expanding their platform capabilities.
Record quarterly revenue reached $126.9 million, a 23.5% increase from the first quarter of 2024.
Annualized Recurring Revenue grew to $493.9 million as of March 31, 2025, up 22.7% year-over-year.
GAAP Net income increased significantly to $6.9 million, compared to $2.2 million in the prior year period.
Adjusted EBITDA rose 40.0% year-over-year to $45.1 million, with adjusted EBITDA margin improving by 420 basis points.
Clearwater
Clearwater
Forward Guidance
Clearwater Analytics provided guidance for the second quarter and full year 2025, both excluding and including the impact of the recently completed acquisitions of Enfusion and Beacon.
Positive Outlook
- Second quarter 2025 revenue guidance (excluding acquisitions) of $129 million represents approximately 21% year-over-year growth.
- Second quarter 2025 Adjusted EBITDA guidance (excluding acquisitions) of $45 million represents approximately 35% margin.
- Full Year 2025 consolidated revenue guidance (including acquisitions) is projected to be between $720 million and $728 million, representing approximately 59% to 61% year-over-year growth.
- Full Year 2025 consolidated Adjusted EBITDA guidance (including acquisitions) is projected to be between $230 million and $235 million, representing approximately 32% margin.
- Acquisitions of Enfusion and Beacon are expected to contribute significantly to revenue and Adjusted EBITDA in the second quarter and full year 2025.
Challenges Ahead
- Total equity-based compensation expense and related payroll taxes (including one-time charges) for the full year 2025 are estimated to be around $139 million.
- Depreciation and Amortization for the full year 2025 are estimated to be between $100 million and $120 million.
- Non-GAAP effective tax rate for the full year 2025 is expected to be 25%.
- Diluted non-GAAP share count for the full year 2025 is estimated to be around 303 million shares.
- Guidance for certain non-GAAP measures is provided without reconciliation to GAAP, requiring unreasonable efforts to provide.