Clearwater Analytics Revenue Soars 77%, But Net Loss Widens on Higher Costs

TL;DR

**CWAN is growing revenue like crazy, but the massive jump in debt and expenses means they're bleeding cash, making this a risky bet for now.**

AI Summary

Clearwater Analytics Holdings, Inc. (CWAN) reported a significant increase in revenue for the three months ended September 30, 2025, reaching $205.11 million, up from $115.83 million in the same period of 2024, representing a 77.1% year-over-year growth. Despite this robust revenue growth, the company experienced a net loss of $10.51 million for the quarter, a notable decline from a net income of $4.77 million in Q3 2024. This shift to a net loss was primarily driven by a substantial increase in interest expense, which surged to $16.12 million in Q3 2025 from $1.08 million in Q3 2024, and higher operating expenses across research and development, sales and marketing, and general and administrative categories. Total assets nearly tripled to $2.99 billion as of September 30, 2025, from $1.17 billion at December 31, 2024, largely due to increases in intangible assets and goodwill, suggesting significant acquisition activity. The company's strategic outlook appears focused on continued growth, potentially through acquisitions, as evidenced by the increase in notes payable to $830.87 million from $43.16 million, indicating increased leverage. Risks include intense competition and dependence on asset values for revenue, which could be impacted by market volatility.

Why It Matters

This filing reveals a critical juncture for Clearwater Analytics: while revenue growth is explosive at 77.1% year-over-year, profitability has reversed, with a net loss of $10.51 million. For investors, this signals that aggressive growth strategies, likely fueled by acquisitions given the surge in intangible assets and goodwill, are coming at a significant cost, particularly in interest expense. Employees might see continued expansion but also pressure to integrate new operations efficiently. Customers could benefit from an expanded product suite and market presence, potentially intensifying competition with rivals like Enfusion and Beacon, which could lead to better services or pricing in the long run. The broader market will watch if CWAN can translate its top-line growth into sustainable profitability, especially as interest rates remain a factor.

Risk Assessment

Risk Level: high — The risk level is high due to the significant increase in net loss to $10.51 million in Q3 2025 from a net income of $4.77 million in Q3 2024, coupled with a dramatic rise in interest expense to $16.12 million from $1.08 million. Furthermore, notes payable, less current maturities, ballooned to $830.87 million as of September 30, 2025, from $43.16 million at December 31, 2024, indicating substantial new debt and increased financial leverage.

Analyst Insight

Investors should exercise caution and scrutinize the company's ability to manage its rapidly increasing debt and operating expenses. While revenue growth is impressive, the shift to a net loss and the surge in interest expense warrant a deeper dive into the sustainability of its growth strategy and potential future profitability. Consider waiting for evidence of improved cost control and a clear path to positive net income before making a significant investment.

Financial Highlights

revenue

$205.11M

total Assets

$2.99B

total Debt

$838.87M

net Income

$(10.51M)

cash Position

$60.75M

revenue Growth

+77.1%

Key Numbers

• $205.11M — Revenue for Q3 2025 (Increased 77.1% from $115.83 million in Q3 2024)
• $(10.51M) — Net loss for Q3 2025 (Shifted from a net income of $4.77 million in Q3 2024)
• $16.12M — Interest expense for Q3 2025 (Increased significantly from $1.08 million in Q3 2024)
• $830.87M — Notes payable (non-current) as of Sep 30, 2025 (Increased from $43.16 million at Dec 31, 2024, indicating higher leverage)
• $2.99B — Total assets as of Sep 30, 2025 (Nearly tripled from $1.17 billion at Dec 31, 2024, driven by intangible assets and goodwill)
• $714.12M — Intangible assets, net as of Sep 30, 2025 (Increased from $30.87 million at Dec 31, 2024)
• $1.27B — Goodwill as of Sep 30, 2025 (Increased from $70.97 million at Dec 31, 2024)
• $94.73M — YTD equity-based compensation expense (Increased from $75.06 million in YTD 2024)
• 288,280,392 — Class A common stock shares outstanding as of Sep 30, 2025 (Increased from 212,857,580 shares at Dec 31, 2024)
• $33.47M — Total equity-based compensation expense for Q3 2025 (Increased from $25.98 million in Q3 2024)

Key Players & Entities

• Clearwater Analytics Holdings, Inc. (company) — Registrant
• JPMorgan Chase Bank, N.A. (company) — Administrative agent and collateral agent for 2025 Credit Agreement
• Welsh, Carson, Anderson & Stowe (company) — Initial Principal Equity Owner
• Permira Advisers LLC (company) — Initial Principal Equity Owner
• Enfusion, Inc. (company) — Competitor mentioned in glossary
• Beacon Platform Inc. (company) — Competitor mentioned in glossary
• Wilshire Advisors LLC (company) — Partner for Wilshire Technology
• SEC (regulator) — Securities and Exchange Commission
• New York Stock Exchange (regulator) — Exchange where Class A common stock is registered
• Clearwater Analytics, LLC (company) — Subsidiary party to credit agreements

FAQ

Risk Factors

• Increased Leverage and Interest Expense [high — financial]: The company's notes payable surged from $43.16 million at December 31, 2024, to $830.87 million as of September 30, 2025. This significant increase in debt, coupled with a rise in interest expense from $1.08 million to $16.12 million year-over-year for Q3, indicates a substantial increase in financial leverage and associated costs.
• Rising Operating Expenses [medium — operational]: Operating expenses across research and development, sales and marketing, and general and administrative categories have increased. While not quantified in the provided text, this trend, alongside a shift to a net loss, suggests pressure on profitability from operational cost growth.
• Dependence on Asset Values [medium — market]: Clearwater's revenue is inherently linked to the value of assets under management. Market volatility that negatively impacts asset values could directly reduce the company's revenue streams.
• Integration of Acquisitions [medium — operational]: The substantial increase in intangible assets ($714.12M from $30.87M) and goodwill ($1.27B from $70.97M) points to significant acquisition activity. Successfully integrating these acquisitions and realizing their expected synergies presents an operational challenge.
• Intense Competition [medium — market]: The company operates in a competitive landscape. While specific competitors are not named, intense competition can lead to pricing pressures and increased costs for customer acquisition and retention.

Industry Context

Clearwater Analytics operates in the financial technology sector, specifically providing cloud-based investment management solutions. The industry is characterized by a strong demand for data analytics, automation, and regulatory compliance tools. Competition is intense, with established players and emerging fintech firms vying for market share. Trends include increasing adoption of AI and machine learning for insights, and a growing need for integrated solutions across the investment lifecycle.

Regulatory Implications

As a financial services technology provider, Clearwater Analytics is subject to various regulations concerning data privacy, cybersecurity, and financial reporting. Compliance with these evolving regulations is critical to maintaining client trust and avoiding penalties. Changes in financial market regulations could also impact the services clients require and, consequently, Clearwater's offerings.

What Investors Should Do

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Glossary

Goodwill

An intangible asset that arises when one company acquires another for a price greater than the fair market value of its net assets and liabilities. It represents the value of the acquired company's brand name, customer base, and other intangible assets. (A significant increase in goodwill ($1.27B from $70.97M) indicates substantial acquisition activity by Clearwater Analytics.)

Intangible assets, net

Assets that lack physical substance but are identifiable and provide future economic benefits, such as patents, copyrights, trademarks, and customer lists. 'Net' implies accumulated amortization has been deducted. (The sharp rise in intangible assets ($714.12M from $30.87M) suggests the company has acquired significant intellectual property or other non-physical assets, likely through acquisitions.)

Notes payable, current portion

The portion of a company's long-term debt that is due within one year. (An increase in this line item ($8.00M from $2.75M) indicates a greater short-term repayment obligation on the company's debt.)

Notes payable, less current maturities and unamortized debt issuance costs

The long-term portion of a company's debt obligations, excluding amounts due within the next twelve months and the costs associated with issuing that debt. (The substantial increase to $830.87M from $43.16M highlights a significant increase in the company's long-term borrowing and leverage.)

Deferred tax assets, net

Represents future tax benefits that a company can use to reduce its taxable income, often arising from temporary differences between accounting and tax rules, or from net operating losses. (A notable increase ($671.80M from $602.50M) suggests potential future tax savings, possibly related to the company's growth or acquisition activities.)

Equity-based compensation expense

The cost recognized for employee stock options, restricted stock units, and other equity awards granted to employees. (The increase in both quarterly ($33.47M from $25.98M) and year-to-date ($94.73M from $75.06M) equity-based compensation expense indicates a growing use of stock-based incentives, potentially to attract and retain talent during a period of expansion.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Clearwater Analytics has demonstrated exceptional revenue growth, increasing by 77.1% to $205.11 million. However, this top-line expansion has been overshadowed by a significant shift from net income to a net loss of $10.51 million, primarily due to a dramatic surge in interest expenses and higher operating costs. The balance sheet reflects aggressive expansion, with total assets nearly tripling, largely driven by substantial increases in goodwill and intangible assets, indicative of significant acquisitions. This growth has been financed by a considerable increase in debt, with notes payable rising sharply, signaling increased financial leverage and potential risks.

Key Financial Figures

• $0.001 — stered Class A common stock, par value $0.001 per share CWAN New York Stock Exchange

Filing Documents

• cwan-20250930.htm (10-Q) — 1945KB
• cwan-20250930xexx311.htm (EX-31.1) — 10KB
• cwan-20250930xexx312.htm (EX-31.2) — 10KB
• cwan-20250930xexx321.htm (EX-32.1) — 5KB
• cwan-20250930xexx322.htm (EX-32.2) — 5KB
• cwan-20250930_g1.jpg (GRAPHIC) — 20KB
• 0001866368-25-000031.txt ( ) — 9583KB
• cwan-20250930.xsd (EX-101.SCH) — 62KB
• cwan-20250930_cal.xml (EX-101.CAL) — 119KB
• cwan-20250930_def.xml (EX-101.DEF) — 313KB
• cwan-20250930_lab.xml (EX-101.LAB) — 784KB
• cwan-20250930_pre.xml (EX-101.PRE) — 548KB
• cwan-20250930_htm.xml (XML) — 1359KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 42 Item 4.

Controls and Procedures

Controls and Procedures 43 PART II. Other Information 44 Item 1.

Legal Proceedings

Legal Proceedings 44 Item 1A.

Risk Factors

Risk Factors 44 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44 Item 3. Defaults Upon Senior Securities 44 Item 4. Mine Safety Disclosures 44 Item 5. Other Information 45 Item 6. Exhibits 45

Signatures

Signatures 48 i Table of Contents GLOSSARY As used in this Quarterly Report on Form 10-Q, the terms identified below have the meanings specified below unless otherwise noted or the context indicates otherwise: "Company," "we," "us," "our," "CWAN" and similar references refer to Clearwater Analytics Holdings, Inc., and, unless otherwise stated, all of its direct and indirect subsidiaries, including CWAN Holdings (as defined below). "2025 Credit Agreement" refers to the credit agreement, dated as of April 21, 2025, entered into by and among CWAN Acquisition, LLC, Clearwater Analytics, LLC, the lenders party thereto from time to time, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. "Annual Report" refers to our Annual Report on Form 10-K, for the fiscal year ended December 31, 2024 (File No. 001-40838), as filed with the SEC on February 26, 2025, as amended by amendment No. 1 to the Company's Annual Report on Form 10-K filed with the SEC on March 7, 2025. "Beacon" refers to Beacon Platform Inc. "Continuing Equity Owners" refers collectively to direct or indirect holders of LLC Interests and/or our Class B common stock, including certain of the Initial Principal Equity Owners and certain of our directors and their respective Permitted Transferees who may exchange at each of the irrespective options, in whole or in part from time to time, their LLC Interests (along with an equal number of shares of Class B common stock (and such shares shall be immediately canceled)) for newly issued shares of our Class A common stock. "CWAN Holdings" refers to CWAN Holdings, LLC. "Enfusion" refers to Enfusion, Inc. "Exchange Act" refers to the Securities Exchange Act of 1934, as amended. "Initial Principal Equity Owners" refers to Welsh, Carson, Anderson & Stowe and Permira Advisers LLC and their respective affiliates and Permitted Transferees (as defined in the LLC Agreement). "IPO" refers to our initial public offering, which closed in Se

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Condensed Consolidated Financial Statements (unaudited)

Item 1. Condensed Consolidated Financial Statements (unaudited). 1 Table of Contents Clearwater Analytics Holdings, Inc. Condensed Consolidated Balance Sheets (In thousands, except share amounts and per share amounts, unaudited) September 30 December 31 2025 2024 Assets Current assets: Cash and cash equivalents $ 60,750 $ 177,350 Short-term investments 3,398 78,139 Accounts receivable, net 152,791 106,151 Prepaid expenses and other current assets 33,871 23,006 Total current assets 250,810 384,646 Property, equipment and software, net 26,262 14,797 Operating lease right-of-use assets, net 40,315 24,797 Deferred contract costs, non-current 9,551 7,013 Debt issuance costs - line of credit 3,670 339 Deferred tax assets, net 671,801 602,500 Intangible assets, net 714,118 30,868 Goodwill 1,267,108 70,971 Long-term investments — 30,301 Other non-current assets 6,877 3,340 Total assets $ 2,990,512 $ 1,169,572 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,316 $ 2,934 Accrued expenses and other current liabilities 83,610 55,654 Deferred revenue 17,152 7,329 Notes payable, current portion 8,000 2,750 Operating lease liability, current portion 15,537 8,350 Tax receivable agreement liability — 35 Total current liabilities 127,615 77,052 Notes payable, less current maturities and unamortized debt issuance costs 830,869 43,164 Operating lease liability, less current portion 28,448 17,655 Other long-term liabilities 2,029 1,470 Total liabilities 988,961 139,341 Stockholders' Equity Class A common stock, par value $ 0.001 per share; 1,500,000,000 shares authorized, 288,280,392 shares issued and outstanding as of September 30, 2025, 212,857,580 shares issued and outstanding as of December 31, 2024 288 213 Class B common stock, par value $ 0.001 per share; 500,000,000 shares authorized, 4,506,422 share issued and outstanding as of September 30, 2025, no shares issued and outstanding as of December 31, 2024