Company: CWAN
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-008169
Chunk: 72

Company: Clearwater Analytics Holdings, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 72
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,865)$(1,143)$873 Percent change over prior year(210,998)%(84)%179 %

The benefit from income taxes in 2024 primarily relates to the valuation allowance release on our U.S. federal and state deferred tax assets. We have maintained a valuation allowance on all of our U.S. net deferred tax assets since our inception as it was determined that it was more likely than not that we would not recognize the benefits of these assets. In the fourth quarter of the year ended December 31, 2024, based on the relevant weight of positive and negative evidence, including the amount of our taxable income in recent years which is objective and verifiable, and consideration of our expected future taxable earnings, we concluded that the valuation allowance related to most U.S. federal and state deferred tax assets was no longer needed. Accordingly, we have recognized a non-recurring tax benefit of $472 million related to the valuation allowance reversal. 

We consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under tax law, and results of recent operations. 

The decrease in provision for income taxes in 2023 primarily relates to change in the mix of foreign jurisdiction income in the period and decreased pre-tax income in foreign jurisdictions.

Liquidity and Capital Resources

To date, we have primarily financed our operations through cash flows from operations and financing activities.

As of December 31, 2024, we had cash, cash equivalents and investments of $285.7 million, including cash and cash equivalents of $177.3 million, short-term investments of $78.1 million and long-term investments of $30.3 million. Cash, cash equivalents and short-term investments primarily consist of highly-liquid investments in money market funds, corporate debt securities, US government bond, commercial paper and certificates of deposit. Long-term investments primarily consist of US government bond, U.S. agency securities and corporate debt securities. 

We believe our existing cash and cash equivalents will be sufficient to meet our operating working capital and capital expenditure requirements over the next 12 months. Our future financing requirements will depend on many factors, including our growth rate, revenue retention rates, the timing and extent of spending to support development of our platform and any future investments or acquisitions we may make. As announced on January 13, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) on January