Company: CWAN
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001628280-25-021833
Chunk: 102

Company: Clearwater Analytics Holdings, Inc.
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 2
Chunk 102
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 our existing clients onto our platform.

Annualized recurring revenue increased 22.7% from March 31, 2024 to March 31, 2025 on account of growth in our client base as we brought new clients onto our platform and also added additional assets onto our platform from existing clients. 

24

Gross Revenue Retention Rate

Gross revenue retention rate represents annual contract value (“ACV”) at the beginning of the 12-month period ended on the reporting date less client attrition over the prior 12-month period, divided by ACV at the beginning of the 12-month period, expressed as a percentage. ACV is comprised of annualized recurring revenue plus contracted-not-billed revenue, which represents the estimated annual contracted revenue for new and existing client opportunities prior to revenue recognition. In order to arrive at total ACV, we include contracted-not-billed revenue, as it is contracted revenue that has not been recognized but that we expect to produce recognized revenue in the future. Client attrition occurs when a client provides a contract termination notice. The amount of client attrition is calculated as the reduction in annualized revenue of the client at the time of the notice and is recorded in the month the final billing occurs. In the case of client attrition where contracted-not-billed revenue is still present for a client, both annualized recurring revenue and contracted-not-billed revenue associated with such client are deducted from ACV.

As of March 31, 2025, the gross revenue retention rate was 98% compared to 99% as of March 31, 2024. The Company has reported a gross revenue retention rate of at least 98% for 24 out of the 25 prior quarters. We believe the consistent and high gross revenue retention rate is a testament to the value proposition that our leading solution offers. 

Net Revenue Retention Rate

Net revenue retention rate is the percentage of recurring revenue retained from clients on the platform for 12 months and includes changes from the addition, removal or value of assets on our platform, contractual changes that have an impact to annualized recurring revenues and lost revenue from client attrition. We calculate net revenue retention rate as of a period end by starting with the annualized recurring revenue from clients as of the 12 months prior to such period end. We then calculate the annualized recurring revenue from these clients as of the current period end. We then divide the total current period end annualized recurring revenue by the 12-month prior period end annualized recurring revenue to