CWAN Earnings Prediction
The chart below shows how CWAN performed 10 days before and after its earnings report, based on data from the past quarters. Typically, CWAN sees a +2.96% change in stock price 10 days leading up to the earnings, and a +5.02% change 10 days following the report. On the earnings day itself, the stock moves by -1.16%. This data can give you a slight idea of what to expect for the next quarter's release.
CWAN Key Earning Data
CWAN Earnings Analysis
Positive
Q3 Revenue Surge: 1. Strong Revenue Growth: Clearwater Analytics reported Q3 2024 revenue of $115.8 million, reflecting a 22.4% year-on-year increase.
Annual Recurring Revenue Surge: 2. Significant ARR Increase: The company's annualized recurring revenue (ARR) grew by 26.1% year-on-year, reaching $456.9 million.
Client Loyalty Success: 3. High Gross Revenue Retention: Clearwater achieved a remarkable gross revenue retention rate of 99% for the last three quarters, indicating strong client loyalty and satisfaction.
Record Free Cash Flow Growth: 4. Record Free Cash Flow: The company generated record high free cash flow of $48.1 million in Q3, representing a 55.6% increase from the previous year.
Net Revenue Retention Increase: 5. Increased Net Revenue Retention: Clearwater's net revenue retention rate rose to 114%, up from 110% in the previous quarter, driven by onboarding additional assets and cross-selling new products.
Negative
Future TRA Liabilities: 1. High TRA Liabilities: The company recorded a potential future TRA liability of $614 million as of September 30, 2024, which includes $417 million related to historical exchanges and $197 million for future exchanges, indicating significant financial obligations ahead.
Rising TRA Expenses: 2. Increasing TRA Expenses: Clearwater Analytics has seen a rise in TRA expenses, with $11.5 million recorded in the first nine months of 2024, and an expected total of approximately $17 million for the full year, reflecting growing financial burdens.
Cash Flow Challenges: 3. Cash Flow Concerns: Despite a strong cash position of $336.7 million, the company is facing ongoing TRA obligations that could impact future cash flows, as they will need to settle $72.5 million if the TRA termination is approved.
EBITDA Margin Concerns: 4. Potential Decrease in EBITDA Margin: The guidance for Q4 2024 suggests a lower EBITDA margin compared to Q3, indicating potential operational challenges or increased expenses that could affect profitability.
Interest Rate Impact on Growth: 5. Dependence on Interest Rate Environment: The company acknowledged that future interest rate cuts could provide only a modest tailwind to ARR growth, suggesting that reliance on external economic factors may limit growth potential.
CWAN FAQs
How does CWAN typically perform around its earnings report dates?
CWAN's stock performance around earnings reports can vary, but historical data shows specific patterns, such as a +2.96% change leading up to the report and a +5.02% change in the 10 days following the release.
Is Clearwater Analytics Holdings, Inc. (CWAN) Q3 2024 Earnings Conference Call Summary positive or negative?
How can historical earnings data help predict future stock performance?
CWAN Earning Call Sentiment
Clearwater Analytics Holdings, Inc. (CWAN) Q3 2024 Earnings Conference Call Transcript
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