Clearwater (CWAN) Q3 2025 Earnings Call Transcript

Why It Matters

The results demonstrate Clearwater’s ability to scale revenue and profitability while integrating multiple acquisitions, positioning it as a fast‑growing fintech platform for asset managers and insurers. The strong retention and AI‑enabled efficiencies signal durable competitive advantages in a $23 billion total addressable market.

Key Takeaways

• Q3 non‑GAAP revenue $205.1M, up 77% YoY
• ARR reached $807.5M, 77% YoY growth
• Adjusted EBITDA margin 34.5%, expanded 240 bps YoY
• Gross revenue retention 98% for 26 of 27 quarters
• Alternative‑asset bookings >35% of new deals, up from ~25%

Pulse Analysis

Clearwater Analytics’ third‑quarter performance underscores the power of strategic acquisition integration. By combining Enfusion’s front‑to‑back capabilities with Beacon’s data‑management suite and Bistro’s alternatives platform, the company accelerated top‑line growth while preserving high gross margins. The rollout of over 800 generative‑AI agents has slashed manual reconciliation time by 90%, shortened regulatory reporting cycles by 80%, and cut financial‑close durations in half, directly boosting EBITDA margins and freeing cash for capital returns.

Financially, the firm delivered $205.1 million in non‑GAAP revenue and $70.7 million in adjusted EBITDA, translating to a 34.5% margin—up 240 basis points from the prior quarter. ARR now stands at $807.5 million, with organic growth of $22 million sequentially. Retention metrics remain elite, with 98% gross revenue retention and 108% net revenue retention, while cross‑sell modules grew 70% YoY. Notably, alternative‑asset solutions account for more than a third of new bookings, reflecting a shift toward higher‑margin, high‑growth product lines.

Looking ahead, Clearwater projects Q4 revenue of $216‑$217 million and full‑year 2025 revenue near $730 million, maintaining 60%‑plus annual growth. The company’s $23 billion TAM, bolstered by recent wins such as a $30 billion Texas Treasury mandate and a global asset manager’s U.K. rollout, offers ample runway. With $40 million of debt repaid, over 800,000 shares repurchased, and a new Enfusion commercial model slated for 2026, Clearwater is positioned to deepen market penetration, enhance pricing power, and sustain its momentum in the competitive fintech landscape.