Company: CWAN
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-008169
Chunk: 68

Company: Clearwater Analytics Holdings, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 68
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% Change2022(In thousands, except percentages)Equity-based compensation$36,093 $11,354 46 %$24,739 $6,789 38 %$17,950 All other research and development114,465 15,279 15 %99,186 23,016 30 %76,170 Total research and development$150,558 $26,633 21 %$123,925 $29,805 32 %$94,120 Percent of revenue33 %34 %31 %

Research and development expense changed as follows:

Change from December 31, 2023 to December 31, 2024Change from December 31, 2022 to December 31, 2023(in thousands)Increased equity-based compensation$11,354 $6,789 Increased payroll and related costs11,276 13,655 Increased technology costs4,207 8,847 Increased facilities and infrastructure expenses349 1,283 Decreased outside services and contractors(369)(893)Other items(184)124 Total change$26,633 $29,805 

The increase in research and development expense in 2024 was primarily due to increased equity-based

compensation due to grants of additional awards to employees, and movement of a key employee to research and development with a change in responsibilities, as well as increased payroll and related costs as a result of 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, research and development expense increased due to increased technology costs from higher utilization of third-party cloud computing and other third-party IT services, and increased allocation of facilities cost due to additional office space. These increases were partially offset by 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.

The increase in research and development expense in 2023 was primarily due to increased payroll and related costs as a result of headcount growth of additional employees to focus on new offerings, headcount growth related to the JUMP acquisition and lower capitalization of payroll costs related to IT projects, offset by a tax credit related to JUMP based on research and development expenses incurred in France. In addition, research and development expense increased due to increased technology costs from higher utilization of third-party cloud computing and other third