Buyout deal and 72% Q4 growth at Clearwater (NYSE: CWAN)
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Clearwater Analytics reported a very strong Q4 2025 with revenue of $217.5 million, up 72% year-over-year, and annualized recurring revenue of $841 million, up 77%. Non-GAAP metrics were robust, including non-GAAP net income of $44.4 million and adjusted EBITDA of $74.1 million with a 34.1% margin.
The company generated operating cash flow of $55.3 million and free cash flow of $52.3 million in the quarter, while ending 2025 with $91.2 million in cash and $822.6 million of debt. Clearwater also highlighted rapid adoption of its AI and agentic workflows and reiterated its agreement to be acquired by a Permira and Warburg Pincus–led group in an all-cash transaction valuing the company at about $8.4 billion, with stockholders to receive $24.55 per share, expected to close in the second quarter of 2026.
Positive
- Exceptional top-line and ARR growth: Q4 2025 revenue rose 72% year-over-year to $217.5 million, while annualized recurring revenue reached $841 million, up 77%, indicating strong demand and expansion across the customer base.
- Strong profitability and cash generation: Q4 adjusted EBITDA grew 78% to $74.1 million with a 34.1% margin, and free cash flow was $52.3 million, supporting both growth investments and balance sheet actions.
- Value-creating buyout agreement: The company agreed to an all-cash acquisition valued at approximately $8.4 billion, with stockholders receiving $24.55 per share, providing a defined liquidity event pending closing.
- Rapid AI adoption and client traction: Nearly 1,000 AI agents support more than $10 trillion in client assets, with a 10x increase in clients using agentic workflows and over 2,500 clients overall, including numerous 7‑figure deals.
Negative
- Shift from large prior-year profit to GAAP loss: Q4 2025 showed a net loss of $12.5 million compared with net income of $420.3 million a year earlier, driven by higher expenses, interest, and acquisition-related items.
- Significantly higher leverage: Total debt rose to $822.6 million as of December 31, 2025, materially increasing financial obligations alongside substantial goodwill and intangible assets from acquisitions.
- Reduced public-market transparency during deal period: Due to the pending all-cash acquisition, the company will not host earnings calls or provide forward-looking guidance, limiting real-time public communication while the transaction remains pending.
Insights
Clearwater posted exceptional growth and cash generation while moving toward an $8.4 billion all-cash buyout.
Clearwater Analytics delivered Q4 2025 revenue of
Cash generation was solid, with Q4 operating cash flow of
The announced all-cash acquisition by a Permira and Warburg Pincus–led investor group values the company at about
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________________________
FORM 8-K
_____________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 18, 2026
_____________________________________________________
(Exact name of Registrant as Specified in Its Charter)
_____________________________________________________
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||
Registrant’s Telephone Number, Including Area Code: 208 433-1200
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
_____________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition.
On February 18, 2026, the Company issued a press release announcing its results for the fourth quarter ended December 31, 2025. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in this Current Report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly provided by specific reference in such a filing.
The Company is making reference to non-GAAP financial information in the press release. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the attached press release.
Item 9.01 Financial Statements and Exhibits.
(d):The following exhibits are being filed herewith:
| Exhibit Number | Description | |||||||
| 99.1 | Press release entitled "CWAN Announces Fourth Quarter 2025 Financial Results" dated February 18, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Clearwater Analytics Holdings, Inc. | |||||||||||
| Date: | February 18, 2026 | By: | /s/ Jim Cox | ||||||||
| Jim Cox, Chief Financial Officer | |||||||||||
Exhibit 99.1
CWAN Announces Fourth Quarter 2025 Financial Results
Quarterly Revenue of $217.5 Million, Up 72% Year-Over-Year
Annualized Recurring Revenue of $841 Million, Up 77% Year-Over-Year
Adjusted EBITDA of $74.1 Million, Up 78% Year-Over-Year
Operating Cash Flows of $55.3 Million Enabled Repayment of $17 Million of Debt
BOISE, Idaho — February 18, 2026 — Clearwater Analytics Holdings, Inc. (NYSE: CWAN) (“CWAN” or the “Company”), the most comprehensive technology platform for investment management, today announced its financial results for the quarter ended December 31, 2025.
“We delivered a strong end to 2025 with Q4 revenue of $217.5 million, up 72% year-over-year. Our GenAI investments are producing meaningful internal efficiencies, driving Non-GAAP gross margin to a record 79.2%. Adjusted EBITDA was ahead of our expectations as well, growing 77.7% year-over-year to $74.1 million.” said Sandeep Sahai, CEO at CWAN. “Beyond the numbers, Q4 was a transformative quarter that positions us to accelerate our vision of reimagining institutional investment management. Despite many moving parts, the team executed at an extraordinary level. Sequential ARR growth of over $33 million is a testament to the capability and focus of our employees.”
“The industry is changing at an unprecedented pace. Portfolios span public and private assets, data volumes are exploding, and clients need real-time intelligence. Since Clearwater Connect, we’ve seen a 10x increase in the number of clients using agentic workflows. We now have nearly 1,000 AI agents available for deployment across more than $10 trillion in client assets, reducing manual reconciliation by 90%, accelerating regulatory reporting by 80%, and speeding close cycles by 50%,” continued Sahai. “The foundation we’re building—integrating and strengthening Enfusion, Beacon, and our core platform with AI, natively handles the complexity of today’s global portfolios. Looking ahead, we look forward to accelerating our focus and ability to solve the industry’s hardest problems, deliver the agentic solutions our clients need, and lead the future of investing.”
Fourth Quarter 2025 Financial Results Summary
•Revenue: Total revenue for the fourth quarter of 2025 was $217.5 million, an increase of 72%, from $126.5 million in the fourth quarter of 2024.
•Gross Profit: Gross profit for the fourth quarter of 2025 increased to $146.2 million, which equates to a 67.2% GAAP gross margin, compared with gross profit of $92.9 million and GAAP gross margin of 73.5% in the fourth quarter of 2024. Non-GAAP gross profit for the fourth quarter of 2025 was $172.2 million, which equates to a 79.2% non-GAAP gross margin, compared with non-GAAP gross profit of $99.7 million and non-GAAP gross margin of 78.8% in the fourth quarter of 2024.
•Net Income/(Loss): Net loss for the fourth quarter of 2025 was $12.5 million, compared with net income of $420.3 million in the fourth quarter of 2024. Non-GAAP net income for the fourth quarter of 2025 increased to $44.4 million, an increase of 30.7% from $33.9 million in the fourth quarter of 2024.
•Adjusted EBITDA: Adjusted EBITDA for the fourth quarter of 2025 was $74.1 million, an increase of 78%, from $41.7 million in the fourth quarter of 2024. Adjusted EBITDA margin for the fourth quarter of 2025 was 34.1%, an increase of 110 basis points over the fourth quarter of 2024.
•Cash Flows: Operating cash flows for the fourth quarter of 2025 were $55.3 million. Free cash flows for the fourth quarter of 2025 were $52.3 million.
•Net Loss Per Share and Non-GAAP Net Income Per Share: Net loss per basic and diluted share was $0.04 in the fourth quarter of 2025. Non-GAAP net income per basic and diluted share was $0.15 in the fourth quarter of 2025.
•Cash, cash equivalents, and investments were $91.2 million as of December 31, 2025. Total debt, net of debt issuance cost, was $822.6 million as of December 31, 2025.
Fourth Quarter 2025 Key Metrics Summary
•Annualized Recurring Revenue: As of December 31, 2025, annualized recurring revenue (“ARR”) reached $841 million, an increase of 77% from $475 million as of December 31, 2024.
ARR 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.
•Gross Revenue Retention Rate: As of December 31, 2025, the gross revenue retention rate was 98%.
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.
•Net Revenue Retention Rate: As of December 31, 2025, the net revenue retention rate was 109% up from 108% in September 30, 2025.
Net revenue retention rate is the percentage of recurring revenue 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.
Recent Business Highlights
•On September 3, 2025, at our Investor Day, we announced that our Board of Directors authorized a $100 million share repurchase program. We repurchased approximately 510,000 CWAN shares in the quarter for $9.2 million at an average price of $17.97 per share. All of the shares that were repurchased in the fourth quarter were repurchased pursuant to a 10b5-1 Plan. We have $82 million remaining under the authorization.
•CWAN embedded agentic AI capabilities directly into its Beacon risk and quantitative analytics platform to significantly accelerate model validation, and exposure analysis for institutional investors. The AI operates within Beacon’s core calculation engine on live portfolio data, eliminating manual workflows and enabling near real-time risk insights. This enhancement allows risk teams to validate models faster, run natural-language scenario analysis, and automate complex risk workflows with full auditability and governance.
•As of December 31, 2025 we had over 2,500 clients, 152 of whom generated ARR of more than $1 million. In the fourth quarter, we closed multiple 7-figure deals including new client wins with Beacon by CWAN. The incredible progress we’ve demonstrated expanding our client base, speaks to the strength of our solutions and the disruptive nature of our front-to-back offering.
•Generali Deutschland AG selected CWAN to modernize and scale its €40 billion, unit-linked fund (ULF) life insurance operations across four subsidiaries, positioning the insurer for accelerated growth in one of Europe’s fastest-expanding markets. The multi-year agreement will consolidate portfolio management, order execution, and reconciliation on a single front-to-back platform, delivering real-time data, standardizing processes, and automated controls. Designed to support multiple accounting standards and evolving European regulatory requirements, the deployment is expected to enhance operational agility, transparency, and efficiency.
•BarmeniaGothaer Asset Management AG has selected Clearwater Analytics as its strategic investment management platform provider. As the in-house asset manager of the BarmeniaGothaer Group, Barmenia Gothaer Asset Management AG currently manages approximately 50 billion EUR. BarmeniaGothaer is one of Germany’s top 10 insurers with 8.6 billion EUR in premium income. This client exemplifies how leading European insurers are turning to Clearwater’s single instance multi-tenant architecture to improve operational efficiency and leverage AI capabilities in an increasingly complex capital markets environment.
•On December 20, 2025, the Company entered into an Agreement and Plan of Merger to be acquired in a transaction (the “Proposed Transaction”) valued at approximately $8.4 billion by a Permira and Warburg Pincus-led investor group, with participation from Temasek, and key support from Francisco Partners (collectively, the “Investor Group”). Under the terms of the agreement, Company stockholders will receive $24.55 per share in cash upon completion of the Proposed Transaction.
Earnings Conference Call and Guidance
As a result of the execution of a definitive agreement under which the Investor Group will acquire all of the outstanding shares of the Company's common stock in an all-cash transaction, as announced on December 21, 2025, the Company will not host an earnings conference call or webcast to discuss its fourth quarter and full year 2025 financial results nor provide forward-looking guidance.
CWAN currently expects to close the Proposed Transaction in the second quarter of 2026.
About CWAN
CWAN (NYSE: CWAN) is transforming investment management with the industry’s most comprehensive cloud-native platform for institutional investors across global public and private markets. While legacy systems create risk, inefficiency, and data fragmentation, CWAN’s single-instance, multi-tenant architecture delivers real-time data and AI-driven insights throughout the investment lifecycle. The platform eliminates information silos by integrating portfolio management, trading, investment accounting, reconciliation, regulatory reporting, performance, compliance, and risk analytics in one unified system. Serving leading insurers, asset managers, hedge funds, banks, corporations, and governments, CWAN supports over $10 trillion in assets globally. Learn more at www.cwan.com.
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Investor Contact:
Kamil Mielczarek | +1 208-510-6856 | investors@cwan.com
Media Contact:
Claudia Cahill | +1 703-728-1221 | press@cwan.com
Use of non-GAAP Information
This press release contains certain non-GAAP measures, including non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP effective tax rate, diluted non-GAAP share count and free cash flow.
The non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. However, the Company believes that this non-GAAP information is useful as an additional means for investors to evaluate its operating performance, when reviewed in conjunction with its GAAP financial statements. These measures should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP, and because these amounts are not determined in accordance with GAAP, they should not be used exclusively in evaluating the Company's business and operations. In addition, undue reliance should not be placed upon non-GAAP or operating information because this information is neither standardized across companies nor subjected to the same control activities and audit procedures that produce the Company's GAAP financial results.
The Company's non-GAAP statement of operations measures, including non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP effective tax rate, diluted non-GAAP share count and free cash flow, are adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items that management believes are not indicative of its ongoing operations. These adjusted measures exclude the impact of share-based compensation and eliminate potential differences in results of operations between periods caused by factors such as financing and capital structures, taxation positions or regimes, restructuring, transaction expenses, impairment and other charges. Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP.
Use of Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include information concerning the Company's expectations with respect to the proposed transaction, including the timing thereof, and the Company’s possible or assumed future results of operations, business strategies, technology developments, financing and investment plans, dividend policy, competitive position, industry, economic and regulatory environment, potential growth opportunities and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “aim,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would” or similar expressions and the negatives of those terms, but are not the exclusive means of identifying such statements.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors, many of which are beyond the Company’s control, that may cause the Company’s actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties may cause actual results to differ materially from the Company’s current expectations and include, but are not limited to: (A) risks related to the Proposed Transactions, including (i) the risk that the Proposed Transaction may not be completed in a timely manner or at all; (ii) the failure to receive, on a timely basis or otherwise, the required approvals of the Proposed Transaction by the Company’s stockholders; (iii) the possibility that any or all of the various conditions to the consummation of the Proposed Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the Proposed Transaction, including in circumstances which would require the Company to pay a termination fee; (v) the effect of the announcement or pendency of the Proposed Transaction on the Company’s ability to attract, motivate or retain key executives and associates, its ability to maintain relationships with its customers, vendors, service providers and others with whom it does business, or its operating results and business generally; (vi) risks related to the Proposed Transaction diverting management’s attention from the Company’s ongoing business operations; (vii) the risk of shareholder litigation in connection with the Proposed Transaction, including resulting expense or delay; (viii) certain restrictions during the pendency of the Proposed Transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; (ix) risks that the anticipated benefits of the Proposed Transaction are not realized when and as expected; (x) the availability of capital and financing and rating agency actions in connection with the Proposed Transaction; (B) ongoing risks such as those related to (i) the Company’s ability to successfully integrate the operations and technology of its acquisitions of Enfusion, Beacon and Bistro (the “Acquisitions”) with those of the Company and to obtain third party data rights, retain and incentivize the employees of the Acquisitions following the close of the Acquisitions, retain the Acquisitions’ clients, repay debt incurred in connection with the Acquisitions and meet financial covenants to be imposed in connection with such debt; (ii) risks that synergies and growth from the Acquisitions may not be fully realized or may take longer to realize than expected, (iii) the Company's ability to keep pace with rapid technological change and market developments, including artificial intelligence, (iv) competitors in its industry, (v) the possibility that market volatility, a downturn in economic conditions or other factors may cause negative trends or fluctuations in the value of the assets on the Company’s platform, (vi) the Company's ability to manage growth, (vii) the Company’s ability to attract and retain skilled employees, (viii) the possibility that the Company’s solutions fail to perform properly, (ix) disruptions and failures in the Company's and third parties’ computer equipment, cloud-based services, electronic delivery systems, networks and telecommunications systems and infrastructure, (x) the failure to protect the Company, its customers’ and/or its vendors’ confidential information and/or intellectual property, claims of infringement of others’ intellectual property, (xi) factors related to the Company's ownership structure; and (C) other risks and uncertainties detailed in the Company’s periodic public filings with the SEC, including but not limited to those discussed under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed on February 18, 2026, and in other periodic reports filed by the Company with the SEC. These filings are available at www.sec.gov and on the Company’s website.
Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent management’s beliefs and assumptions only as of the date of this press release and should not be relied upon as representing the Company’s expectations or beliefs as of any date subsequent to the time they are made. The Company does not undertake to and specifically declines any obligation to update any forward-looking statements that may be made from time to time by or on behalf of the Company.
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Clearwater Analytics Holdings, Inc.
Consolidated Balance Sheets
(In thousands, except share amounts and per share amounts, unaudited)
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 91,245 | $ | 177,350 | |||||||
| Short-term investments | — | 78,139 | |||||||||
| Accounts receivable, net | 167,348 | 106,151 | |||||||||
| Prepaid expenses and other current assets | 36,977 | 23,006 | |||||||||
| Total current assets | 295,570 | 384,646 | |||||||||
| Property, equipment and software, net | 26,607 | 14,797 | |||||||||
| Operating lease right-of-use assets, net | 34,300 | 24,797 | |||||||||
| Deferred contract costs, non-current | 13,017 | 7,013 | |||||||||
| Debt issuance costs - line of credit | 3,467 | 339 | |||||||||
| Deferred tax assets, net | 695,998 | 602,500 | |||||||||
| Other non-current assets | 5,336 | 3,340 | |||||||||
| Intangible assets, net | 687,578 | 30,868 | |||||||||
| Goodwill | 1,270,056 | 70,971 | |||||||||
| Long-term investments | — | 30,301 | |||||||||
| Total assets | $ | 3,031,929 | $ | 1,169,572 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 4,096 | $ | 2,934 | |||||||
| Accrued expenses and other current liabilities | 112,249 | 55,654 | |||||||||
| Deferred revenue | 21,860 | 7,329 | |||||||||
| Notes payable, current portion | 8,000 | 2,750 | |||||||||
| Operating lease liability, current portion | 15,138 | 8,350 | |||||||||
| Tax receivable agreement liability | — | 35 | |||||||||
| Total current liabilities | 161,343 | 77,052 | |||||||||
| Notes payable, less current maturities and unamortized debt issuance costs | 814,643 | 43,164 | |||||||||
| Operating lease liability, less current portion | 22,555 | 17,655 | |||||||||
| Other long-term liabilities | 2,296 | 1,470 | |||||||||
| Total liabilities | 1,000,837 | 139,341 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' Equity | |||||||||||
| Class A common stock, par value $0.001 per share; 1,500,000,000 shares authorized, 291,426,648 shares issued and outstanding as of December 31, 2025, 212,857,580 shares issued and outstanding as of December 31, 2024 | 291 | 213 | |||||||||
| Class B common stock, par value $0.001 per share; 500,000,000 shares authorized, 2,017,754 share issued and outstanding as of December 31, 2025, no share issued and outstanding as of December 31, 2024 | 2 | — | |||||||||
| Class C common stock, par value $0.001 per share; 500,000,000 shares authorized, no shares issued and outstanding as of December 31, 2025, 12,542,110 shares issued and outstanding as of December 31, 2024 | — | 13 | |||||||||
| Class D common stock, par value $0.001 per share; 500,000,000 shares authorized, no shares issued and outstanding as of December 31, 2025, 22,243,668 shares issued and outstanding as of December 31, 2024 | — | 22 | |||||||||
| Additional paid-in-capital | 1,754,387 | 725,174 | |||||||||
| Accumulated other comprehensive (loss) income | 7,089 | (1,113) | |||||||||
| Retained earnings | 259,963 | 283,946 | |||||||||
| Total stockholders' equity attributable to Clearwater Analytics Holdings, Inc. | 2,021,732 | 1,008,255 | |||||||||
| Non-controlling interests | 9,360 | 21,976 | |||||||||
| Total stockholders' equity | 2,031,092 | 1,030,231 | |||||||||
| Total liabilities and stockholders' equity | $ | 3,031,929 | $ | 1,169,572 | |||||||
Clearwater Analytics Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except share amounts and per share amounts, unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue | $ | 217,457 | $ | 126,465 | $ | 731,368 | $ | 451,803 | |||||||||||||||
Cost of revenue(1) | 71,236 | 33,561 | 239,220 | 122,987 | |||||||||||||||||||
| Gross profit | 146,221 | 92,904 | 492,148 | 328,816 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Research and development(1) | 57,009 | 40,904 | 196,228 | 150,558 | |||||||||||||||||||
Sales and marketing(1) | 45,857 | 17,885 | 149,180 | 67,254 | |||||||||||||||||||
General and administrative(1) | 50,098 | 32,896 | 154,426 | 98,770 | |||||||||||||||||||
| Total operating expenses | 152,964 | 91,685 | 499,834 | 316,582 | |||||||||||||||||||
| Income (loss) from operations | (6,743) | 1,219 | (7,686) | 12,234 | |||||||||||||||||||
| Interest expense | 15,162 | 1,069 | 45,664 | 4,325 | |||||||||||||||||||
| Tax receivable agreement expense | — | 41,637 | — | 53,181 | |||||||||||||||||||
| Other income, net | (249) | (4,649) | (3,678) | (15,209) | |||||||||||||||||||
| Loss before income taxes | (21,656) | (36,838) | (49,672) | (30,063) | |||||||||||||||||||
| Provision for (benefit from) income taxes | (9,131) | (457,143) | (9,418) | (457,648) | |||||||||||||||||||
| Net income (loss) | (12,525) | 420,305 | (40,254) | 427,585 | |||||||||||||||||||
| Less: Net income (loss) attributable to non-controlling interests | (295) | 819 | (1,447) | 3,207 | |||||||||||||||||||
| Net income (loss) attributable to Clearwater Analytics Holdings, Inc. | $ | (12,230) | $ | 419,486 | $ | (38,807) | $ | 424,378 | |||||||||||||||
| Net earnings (loss) per share attributable to Class A and Class D common stock: | |||||||||||||||||||||||
| Basic | $ | (0.04) | $ | 1.85 | $ | (0.14) | $ | 1.93 | |||||||||||||||
| Diluted | $ | (0.04) | $ | 1.63 | $ | (0.14) | $ | 1.68 | |||||||||||||||
| Weighted average shares of Class A and Class D common stock outstanding: | |||||||||||||||||||||||
| Basic | 288,607,569 | 226,571,994 | 271,323,558 | 219,316,625 | |||||||||||||||||||
| Diluted | 288,607,569 | 258,131,701 | 271,323,558 | 254,362,539 | |||||||||||||||||||
(1)Amounts include equity-based compensation as follows:
| Cost of revenue | $ | 3,965 | $ | 3,755 | $ | 16,445 | $ | 13,634 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 9,247 | 9,326 | 33,835 | 36,093 | |||||||||||||||||||
| Sales and marketing | 10,499 | 4,885 | 37,369 | 15,304 | |||||||||||||||||||
| General and administrative | 9,455 | 10,176 | 40,247 | 38,170 | |||||||||||||||||||
| Total equity-based compensation expense | $ | 33,166 | $ | 28,142 | $ | 127,896 | $ | 103,201 | |||||||||||||||
Clearwater Analytics Holdings, Inc.
Consolidated Statements of Cash Flows
(In thousands, unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||||||||
| Net income (loss) | $ | (12,525) | $ | 420,305 | $ | (40,254) | $ | 427,585 | |||||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 29,489 | 3,451 | 85,541 | 12,181 | |||||||||||||||||||
| Noncash operating lease cost | 4,383 | 2,341 | 16,682 | 9,221 | |||||||||||||||||||
| Equity-based compensation | 33,166 | 28,142 | 127,896 | 103,201 | |||||||||||||||||||
| Amortization of deferred contract acquisition costs | 4,362 | 1,692 | 11,487 | 5,265 | |||||||||||||||||||
| Amortization of debt issuance costs, included in interest expense | 977 | 71 | 2,770 | 280 | |||||||||||||||||||
| Debt extinguishment costs | — | — | 419 | — | |||||||||||||||||||
| Provision for bad debt | 488 | — | 2,165 | — | |||||||||||||||||||
| Deferred tax benefit | (9,877) | (456,956) | (12,607) | (460,032) | |||||||||||||||||||
| Accretion of discount on investments | — | (452) | (284) | (2,185) | |||||||||||||||||||
| Realized gain on investments | — | — | (112) | (35) | |||||||||||||||||||
| Changes in operating assets and liabilities, excluding the impact of business acquisitions: | |||||||||||||||||||||||
| Accounts receivable, net | (15,045) | (5,774) | (11,148) | (13,648) | |||||||||||||||||||
| Prepaid expenses and other assets | (2,539) | 3,066 | (11,159) | 5,627 | |||||||||||||||||||
| Deferred contract acquisition costs | (8,325) | (2,826) | (17,036) | (6,242) | |||||||||||||||||||
| Accounts payable | 624 | (1,317) | (1,341) | 269 | |||||||||||||||||||
| Accrued expenses and other liabilities | 28,599 | 8,110 | 22,449 | 11,693 | |||||||||||||||||||
| Tax receivable agreement liability | — | (28,793) | (35) | (18,859) | |||||||||||||||||||
| Other long-term liabilities | 1,554 | — | 463 | — | |||||||||||||||||||
| Net cash provided by (used in) operating activities | 55,331 | (28,940) | 175,896 | 74,321 | |||||||||||||||||||
| INVESTING ACTIVITIES | |||||||||||||||||||||||
| Purchases of property, equipment and software | (3,042) | (822) | (11,554) | (5,259) | |||||||||||||||||||
| Purchases of intangible assets | — | — | (10,239) | — | |||||||||||||||||||
| Purchase of held to maturity investments | — | — | (4,686) | (3,009) | |||||||||||||||||||
| Purchases of available-for-sale investments | — | (20,662) | — | (114,572) | |||||||||||||||||||
| Proceeds from sale of available-for-sale investments | — | — | 89,479 | — | |||||||||||||||||||
| Proceeds from maturities of investments | 3,341 | 20,550 | 23,716 | 107,417 | |||||||||||||||||||
| Acquisition of business, net of cash acquired | — | — | (1,074,754) | (40,121) | |||||||||||||||||||
| Payment of initial direct costs for operating lease | — | — | (89) | (104) | |||||||||||||||||||
| Net cash provided by (used in) investing activities | 299 | (934) | (988,127) | (55,648) | |||||||||||||||||||
| FINANCING ACTIVITIES | |||||||||||||||||||||||
| Proceeds from exercise of options | — | 38 | 168 | 248 | |||||||||||||||||||
| Taxes paid related to net share settlement of equity awards | (1,517) | (12,638) | (33,749) | (55,301) | |||||||||||||||||||
| Repurchase of common stock | (9,551) | — | (18,054) | — | |||||||||||||||||||
| Proceeds from borrowings, net of payment of debt issuance costs | — | — | 924,475 | — | |||||||||||||||||||
| Repayments of borrowings | (17,000) | (688) | (154,063) | (2,750) | |||||||||||||||||||
| Proceeds from employee stock purchase plan | 3,320 | 1,898 | 6,636 | 4,693 | |||||||||||||||||||
| Payment of tax distributions | — | (3,873) | — | (3,873) | |||||||||||||||||||
| Payment of business acquisition holdback liability | — | (3,905) | — | (4,685) | |||||||||||||||||||
| Net cash provided by (used in) financing activities | (24,748) | (19,168) | 725,413 | (61,668) | |||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (387) | (2,302) | 713 | (1,420) | |||||||||||||||||||
| Change in cash and cash equivalents during the period | 30,495 | (51,344) | (86,105) | (44,415) | |||||||||||||||||||
| Cash and cash equivalents, beginning of period | 60,750 | 228,694 | 177,350 | 221,765 | |||||||||||||||||||
| Cash and cash equivalents, end of period | $ | 91,245 | $ | 177,350 | $ | 91,245 | $ | 177,350 | |||||||||||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||||||||||||
| Cash paid for interest | $ | 14,250 | $ | 837 | $ | 31,142 | $ | 3,464 | |||||||||||||||
| Cash paid for income taxes | $ | 2,320 | $ | 800 | $ | 3,486 | $ | 1,979 | |||||||||||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||||||||||||||||||||
| Purchase of property and equipment included in accounts payable and accrued expense | $ | 210 | $ | 38 | $ | 210 | $ | 38 | |||||||||||||||
| Acquisition of Bistro intangible assets paid in common stock | $ | — | $ | — | $ | 102,729 | $ | — | |||||||||||||||
| Tax distributions payable to Continuing Equity Owners included in accrued expenses | $ | 3 | $ | 23 | $ | 3 | $ | 23 | |||||||||||||||
Clearwater Analytics Holdings, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(In thousands, unaudited)
| Three Months Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Net income (loss) | $ | (12,525) | (6 | %) | $ | 420,305 | 332 | % | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Interest expense | 15,162 | 7 | % | 1,069 | 1 | % | |||||||||||||||||
| Depreciation and amortization | 29,489 | 14 | % | 3,451 | 3 | % | |||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 33,797 | 16 | % | 30,421 | 24 | % | |||||||||||||||||
| Tax receivable agreement expense | — | — | % | 41,637 | 33 | % | |||||||||||||||||
| Transaction expenses | 17,508 | 8 | % | 6,382 | 5 | % | |||||||||||||||||
| Amortization of prepaid management fees and reimbursable expenses | 21 | 0 | % | 210 | 0 | % | |||||||||||||||||
| Benefit from income taxes | (9,131) | (4 | %) | (457,143) | (361) | % | |||||||||||||||||
| Other income, net | (249) | 0 | % | (4,649) | (4 | %) | |||||||||||||||||
| Adjusted EBITDA | $ | 74,072 | 34 | % | $ | 41,683 | 33 | % | |||||||||||||||
| Revenue | $ | 217,457 | 100 | % | $ | 126,465 | 100 | % | |||||||||||||||
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Net income (loss) | $ | (40,254) | (6 | %) | $ | 427,585 | 95 | % | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Interest expense | 45,664 | 6 | % | 4,325 | 1 | % | |||||||||||||||||
| Depreciation and amortization | 85,541 | 12 | % | 12,181 | 3 | % | |||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 134,533 | 18 | % | 110,961 | 25 | % | |||||||||||||||||
| Tax receivable agreement expense | — | — | % | 53,181 | 12 | % | |||||||||||||||||
| Transaction expenses | 35,773 | 5 | % | 8,308 | 2 | % | |||||||||||||||||
| Amortization of prepaid management fees and reimbursable expenses | 29 | 0 | % | 1,990 | 0 | % | |||||||||||||||||
| Benefit from income taxes | (9,418) | (1 | %) | (457,648) | (101 | %) | |||||||||||||||||
| Other income, net | (3,678) | (1 | %) | (15,209) | (3 | %) | |||||||||||||||||
| Adjusted EBITDA | $ | 248,190 | 34 | % | $ | 145,674 | 32 | % | |||||||||||||||
| Revenue | $ | 731,368 | 100 | % | $ | 451,803 | 100 | % | |||||||||||||||
Clearwater Analytics Holdings, Inc.
Reconciliation of Free Cash Flow
(In thousands, unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 55,331 | $ | (28,940) | $ | 175,896 | $ | 74,321 | |||||||||||||||
| Less: Purchases of property and equipment | 3,042 | 822 | 11,554 | 5,259 | |||||||||||||||||||
| Free cash flow | $ | 52,289 | $ | (29,762) | $ | 164,342 | $ | 69,062 | |||||||||||||||
Clearwater Analytics Holdings, Inc.
Reconciliation of Non-GAAP Information
(In thousands, except share amounts and per share amounts, unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue | $ | 217,457 | $ | 126,465 | $ | 731,368 | $ | 451,803 | |||||||||||||||
| Gross profit | $ | 146,221 | $ | 92,904 | $ | 492,148 | $ | 328,816 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 4,078 | 3,963 | 17,896 | 14,546 | |||||||||||||||||||
| Depreciation and amortization | 21,865 | 2,840 | 63,980 | 10,137 | |||||||||||||||||||
| Gross profit, non-GAAP | $ | 172,164 | $ | 99,707 | $ | 574,024 | $ | 353,499 | |||||||||||||||
| As a percentage of revenue, non-GAAP | 79 | % | 79 | % | 78 | % | 78 | % | |||||||||||||||
| Cost of revenue | $ | 71,236 | $ | 33,561 | $ | 239,220 | $ | 122,987 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 4,078 | 3,963 | 17,896 | 14,546 | |||||||||||||||||||
| Depreciation and amortization | 21,865 | 2,840 | 63,980 | 10,137 | |||||||||||||||||||
| Cost of revenue, non-GAAP | $ | 45,293 | $ | 26,758 | $ | 157,344 | $ | 98,304 | |||||||||||||||
| As a percentage of revenue, non-GAAP | 21 | % | 21 | % | 22 | % | 22 | % | |||||||||||||||
| Research and development | $ | 57,009 | $ | 40,904 | $ | 196,228 | $ | 150,558 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 9,416 | 11,091 | 35,654 | 41,356 | |||||||||||||||||||
| Depreciation and amortization | 556 | 156 | 1,542 | 736 | |||||||||||||||||||
| Research and development, non-GAAP | $ | 47,037 | $ | 29,657 | $ | 159,032 | $ | 108,466 | |||||||||||||||
| As a percentage of revenue, non-GAAP | 22 | % | 23 | % | 22 | % | 24 | % | |||||||||||||||
| Sales and marketing | $ | 45,857 | $ | 17,885 | $ | 149,180 | $ | 67,254 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 10,773 | 5,024 | 38,893 | 16,017 | |||||||||||||||||||
| Depreciation and amortization | 6,277 | 173 | 17,400 | 638 | |||||||||||||||||||
| Sales and marketing, non-GAAP | $ | 28,807 | $ | 12,688 | $ | 92,887 | $ | 50,599 | |||||||||||||||
| As a percentage of revenue, non-GAAP | 13 | % | 10 | % | 13 | % | 11 | % | |||||||||||||||
| General and administrative | $ | 50,098 | $ | 32,896 | $ | 154,426 | $ | 98,770 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 9,530 | 10,343 | 42,090 | 39,042 | |||||||||||||||||||
| Depreciation and amortization | 791 | 282 | 2,619 | 670 | |||||||||||||||||||
| Amortization of prepaid management fees and reimbursable expenses | 21 | 210 | 29 | 1,990 | |||||||||||||||||||
| Transaction expenses | 17,508 | 6,382 | 35,773 | 8,308 | |||||||||||||||||||
| General and administrative, non-GAAP | $ | 22,248 | $ | 15,679 | $ | 73,915 | $ | 48,760 | |||||||||||||||
| As a percentage of revenue, non-GAAP | 10 | % | 12 | % | 10 | % | 11 | % | |||||||||||||||
| Income (loss) from operations | $ | (6,743) | $ | 1,219 | $ | (7,686) | $ | 12,234 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 33,797 | 30,421 | 134,533 | 110,961 | |||||||||||||||||||
| Depreciation and amortization | 29,489 | 3,451 | 85,541 | 12,181 | |||||||||||||||||||
| Amortization of prepaid management fees and reimbursable expenses | 21 | 210 | 29 | 1,990 | |||||||||||||||||||
| Transaction expenses | 17,508 | 6,382 | 35,773 | 8,308 | |||||||||||||||||||
| Income from operations, non-GAAP | $ | 74,072 | $ | 41,683 | $ | 248,190 | $ | 145,674 | |||||||||||||||
| As a percentage of revenue, non-GAAP | 34 | % | 33 | % | 34 | % | 32 | % | |||||||||||||||
| Net income (loss) | $ | (12,525) | $ | 420,305 | $ | (40,254) | $ | 427,585 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Equity-based compensation expense and related payroll taxes | 33,797 | 30,421 | 134,533 | 110,961 | |||||||||||||||||||
| Depreciation and amortization | 29,489 | 3,451 | 85,541 | 12,181 | |||||||||||||||||||
| Tax receivable agreement expense | — | 41,637 | — | 53,181 | |||||||||||||||||||
| Amortization of prepaid management fees and reimbursable expenses | 21 | 210 | 29 | 1,990 | |||||||||||||||||||
| Transaction expenses | 17,508 | 6,382 | 35,773 | 8,308 | |||||||||||||||||||
Tax impacts of adjustments to net income (loss)(1) | (23,921) | (468,459) | (60,969) | (496,779) | |||||||||||||||||||
| Net income, non-GAAP | $ | 44,369 | $ | 33,947 | $ | 154,653 | $ | 117,427 | |||||||||||||||
| As a percentage of revenue, non-GAAP | 20 | % | 27 | % | 21 | % | 26 | % | |||||||||||||||
| Net income per share - basic, non-GAAP | $ | 0.15 | $ | 0.15 | $ | 0.57 | $ | 0.54 | |||||||||||||||
| Net income per share - diluted, non-GAAP | $ | 0.15 | $ | 0.13 | $ | 0.54 | $ | 0.46 | |||||||||||||||
| Weighted average common shares outstanding - basic | 288,607,569 | 226,571,994 | 271,323,558 | 219,316,625 | |||||||||||||||||||
| Weighted average common shares outstanding - diluted | 299,337,394 | 258,131,701 | 286,495,278 | 254,362,539 | |||||||||||||||||||
(1)The non-GAAP effective tax rate was 25% for the three months and year ended December 31, 2025 and 2024, respectively, and has been used to adjust the provision for income taxes for non-GAAP net income and non-GAAP basic and diluted net income per share. The Company excludes income tax benefits from discrete activities, including the income tax benefit related to the release of the US federal state valuation allowance, because of their nonrecurring nature.
FAQ
How did Clearwater Analytics (CWAN) perform financially in Q4 2025?
Clearwater Analytics delivered very strong Q4 2025 results, with revenue of $217.5 million, up 72% year-over-year. Non-GAAP net income reached $44.4 million and adjusted EBITDA was $74.1 million with a 34.1% margin, reflecting meaningful operating leverage and profitable growth at scale.
What is Clearwater Analytics’ annualized recurring revenue and retention for 2025?
As of December 31, 2025, Clearwater Analytics’ annualized recurring revenue was $841 million, up 77% from the prior year. The company reported a 98% gross revenue retention rate and a 109% net revenue retention rate, indicating strong customer stickiness and expansion within its existing client base.
What are the key details of the Clearwater Analytics buyout transaction?
Clearwater Analytics agreed to be acquired in a transaction valued at approximately $8.4 billion by a Permira and Warburg Pincus–led investor group. Under the agreement, stockholders will receive $24.55 per share in cash, with closing currently expected in the second quarter of 2026, subject to customary approvals.
How strong were Clearwater Analytics’ cash flows and balance sheet at year-end 2025?
In Q4 2025, Clearwater generated $55.3 million of operating cash flow and $52.3 million of free cash flow. As of December 31, 2025, it held $91.2 million in cash, cash equivalents, and investments, and carried $822.6 million of total debt, reflecting increased leverage post-acquisitions.
How is Clearwater Analytics using AI and agentic workflows in its platform?
Clearwater has embedded agentic AI into its platform, including Beacon risk analytics, supporting nearly 1,000 AI agents across more than $10 trillion in client assets. Management highlighted a 10x increase in clients using agentic workflows, materially reducing manual reconciliation and accelerating regulatory reporting and close cycles.
Will Clearwater Analytics hold earnings calls or provide guidance while the acquisition is pending?
Following execution of the definitive agreement for the all-cash acquisition, Clearwater stated it will not host an earnings conference call or webcast for its fourth quarter and full year 2025 results, nor provide forward-looking guidance, while the proposed transaction with the investor group remains pending.
How many clients does Clearwater Analytics serve and what is the profile of larger accounts?
As of December 31, 2025, Clearwater served over 2,500 clients, including insurers, asset managers and other institutions. Management noted that 152 clients each generated more than $1 million in annualized recurring revenue, and the quarter included multiple seven‑figure deals, demonstrating traction with large, sophisticated customers.
Filing Exhibits & Attachments
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Feb 17, 2026
[144] Clearwater Analytics Holdings, Inc. SEC Filing