Company: CWAN
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001866368-25-000031
Chunk: 53

Company: Clearwater Analytics Holdings, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 53
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 on the Company’s economic interest held in CWAN Holdings. While the Company consolidates CWAN Holdings for financial reporting purposes, the Company will not be taxed on the earnings attributed to the non-controlling interests. As a result, the income tax burden on the earnings attributed to the non-controlling interest is not reported by the Company in its condensed consolidated financial statements.

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Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in the applicable quarter. In each quarter, we update the estimated annual effective tax rate and make a year-to-date adjustment to the provision. The estimated annual effective tax rate may be subject to significant volatility due to several factors, including our ability to accurately predict the proportion of our pretax income in multiple jurisdictions, certain book-tax differences, the effects of business combinations, and exchanges from non-controlling interests.The following table provides details of the provision for (benefit from) income taxes:Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2025202420252024Income (loss) before income taxes$(10,004)$4,283 $(28,016)$6,775 Provision for (benefit from) income taxes510 (486)(287)(505)Effective tax rate(5.1%)(11.3%)1.0%(7.5%)For the three and nine months ended September 30, 2025, the Company’s effective tax rate was different than the statutory rate primarily because of foreign taxes and non-deductible equity-based compensation, offset by tax credits, windfalls from equity-based compensation deductions, as well as the portion of pretax earnings that are attributable to the non-controlling interest and not taxable to the Company. For the three and nine months ended September 30, 2024, the Company’s effective tax rate was different than the statutory rate primarily because of foreign taxes, non-deductible equity-based compensation, the generation of tax credits and incentives, and the valuation allowance on U.S. deferred tax assets.On July 4, 2025, the U.S. President signed into law “An Act to Provide for Reconciliation Pursuant to Tile II of H. Con. Res. 14” (the “Tax Reform Act of 2025”), also known as the One Big Beautiful Bill Act. The new federal tax legislation includes numerous changes to U.S. corporate income tax law, including but not limited to: permanent 100% bonus depreciation for qualified property, immediate