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 strong contributions from new products and the Wilshire acquisition.

• Adjusted EBITDA margin improved to 31.3%, with adjusted EBITDA of $33.4M, and net income was $0.3M, reversing a prior year loss.

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

• Free cash flow from operations reached $42.4M, up 117% year-over-year; operating cash flow was $43.9M, up 108%.

• The Wilshire acquisition was completed and substantially paid for using Q2 operational cash flow, expanding analytics capabilities.

Financial highlights

• Q2 2024 revenue: $106.8M, up 19% year-over-year; ARR: $427.2M, up 22.2% year-over-year.

• Adjusted EBITDA: $33.4M (31.3% margin), up from $24.8M (28%) in Q2 2023.

• Gross profit: $82.7M (77.5% non-GAAP margin), $76.9M (72% GAAP margin), both up year-over-year.

• Net income for Q2 2024 was $0.3M; diluted EPS was $(0.00) per share.

• Cash, cash equivalents, and investments totaled $297.6M as of June 30, 2024; total debt was $47.9M.

Outlook and guidance

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

• Full-year adjusted EBITDA guidance increased to ~$140M (margin ~32%).

• Depreciation and amortization expense for 2024 expected at $12M; non-GAAP effective tax rate at 25%.

• No interest rate cuts or AUM impact included in 2024 guidance.

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