Company: CWAN
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001866368-25-000018
Chunk: 94

Company: Clearwater Analytics Holdings, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 94
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 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 six months ended June 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 expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, and changes to the international tax regime. Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions.The Company is currently evaluating the potential impact of the Tax Reform Act of 2025 on its consolidated financial statements, and the full effects of the Tax Reform Act of 2025 are not yet known. Any material effects of the new law, including remeasurement of deferred tax assets and liabilities and changes to current and future tax expense, will be reflected in the period of enactment and in future periods as additional guidance is issued and the Company completes its analysis.

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Note 15. Tax Receivable Agreement Liability

In connection with the IPO and related transactions, we entered into a TRA that provided for the payment by us of 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of (i) increases in our share of the tax basis in the net assets of CWAN Holdings resulting from any redemptions or exchanges of CWAN Holdings units, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest and bonus payments pursuant to the TRA Bonus Agreements (the “TRA Payments”).On November 4, 2024, the Company entered into the TRA Amendment which amended the TRA to provide for one-time settlement payments