Clearwater Analytics (CWAN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $106.8M, up 19% year-over-year, with ARR growing 22% to $427.2M and adjusted EBITDA margin improving to 31%–31.3%.

• Net income was $0.3M for Q2 2024, reversing a net loss in Q2 2023; free cash flow from operations rose 117% to $42.4M.

• Gross revenue retention rate held at 99% for the second consecutive quarter, with net revenue retention at 110%.

• Growth was balanced across new and existing clients, geographies, and products, with significant contributions from new offerings and international expansion.

• Completed Wilshire Advisors acquisition, expanding analytics capabilities and funded by Q2 cash generation.

Financial highlights

• Q2 2024 revenue: $106.8M (+19% YoY); ARR: $427.2M (+22.2% YoY); adjusted EBITDA: $33.4M (31–31.3% margin, up 370 bps YoY).

• Gross profit: $82.7M (77.5% non-GAAP margin), $76.9M (72% GAAP margin); net income for Q2: $0.3M.

• Operating cash flow: $43.9M (+108% YoY); free cash flow: $42.4M (+117% YoY); free cash flow to EBITDA conversion: 127%.

• Ended Q2 with $297.6M in cash and investments, net cash of ~$250M after Wilshire acquisition; total debt: $47.9M.

• Net income for the first six months of 2024 was $3M, compared to a $17M loss in the same period last year.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $442M–$444M (+20–21% YoY); Q3 2024 revenue expected at $113M–$114M (+19–20% YoY).

• Full-year adjusted EBITDA guidance increased to ~$140M (31.6–32% margin), outperforming prior targets.

• Depreciation and amortization expense for 2024 expected at $12M, reflecting Wilshire acquisition.

• Non-GAAP effective tax rate expected at 25%; diluted non-GAAP share count ~258M.

• Management expects continued growth from new client additions, international expansion, and cross-selling.