Company: CWAN
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001866368-25-000018
Chunk: 56

Company: Clearwater Analytics Holdings, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 56
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 TRA Settlement Payments were made in December 2024. The remaining TRA Settlement Payments were made in the first quarter of 2025. Refer to Note 15 “Tax Receivable Agreement Liability” to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Other (Income) Expense, Net

Other (income) expense, net consists of gains and losses of foreign currency and investments, and interest income. Interest income relates to interest received on our cash and cash equivalents based on interest rates in the course of the applicable period, and interest received from other investments.

Provision for (Benefit from) Income Taxes

Provision for (benefit from) income taxes consists of income taxes related to federal, state, and foreign jurisdictions where we conduct our business. Our effective tax rate may increase in the future as our ownership in CWAN Holdings increases via exchanges from historical partners. In addition, our discrete items may not be consistent from period to period and could cause volatility in our effective tax rate.

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Key Operating Measures

We consider certain operating measures, such as annualized recurring revenue, gross retention rates and net retention rates, in measuring the performance of our business. The following table summarizes these operating measures as of the dates presented:

First QuarterSecond QuarterThird QuarterFourth Quarter2025Annualized recurring revenue (in thousands)$493,852 $783,450 Gross revenue retention rate98 %98 %Net revenue retention rate114 %110 %2024Annualized recurring revenue (in thousands)$402,326 $427,189 $456,941 $474,924 Gross revenue retention rate99 %99 %99 %98 %Net revenue retention rate110 %110 %114 %116 %

Annualized Recurring Revenue

Annualized recurring revenue is calculated at the end of a period by dividing the recurring revenue in the last month of such period by the number of days in the month and multiplying by 365.

Because a substantial majority of the assets on our Clearwater platform are fixed income securities that typically have low levels of volatility with respect to their market value, the growth in annualized recurring revenue is generally not attributable to the fluctuating market value of the assets on our platform. Rather, the growth in annualized recurring revenue is due to an increase in the number of clients using our offering as well as from onboarding more assets of our existing clients onto our platform.

Annualized recurring revenue increased