Clearwater Analytics Holdings, Inc. reported fourth‑quarter 2025 revenue of $217.5 million, a 72% increase from $126.5 million in Q4 2024. The figure fell slightly below the consensus estimate of roughly $221 million, indicating a modest revenue miss against analyst expectations.
Adjusted earnings before interest, taxes, depreciation and amortization rose to $74.1 million, up 77.7% from $41.7 million in the same quarter a year earlier. Non‑GAAP gross margin reached a record 79.2%, while the adjusted EBITDA margin expanded to 34.1% from 33.0% in Q4 2024, reflecting the impact of GenAI‑driven efficiencies and a favorable mix of high‑margin platform contracts.
Sandeep Sahai, CEO, said, "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." The CEO highlighted a 10‑fold increase in clients using agentic workflows and a 90% reduction in manual reconciliation across more than $10 trillion in client assets, underscoring the operational impact of the company’s AI initiatives.
The company’s annual recurring revenue reached $841 million, up 77% from the prior year, and the CEO noted that sequential ARR growth of over $33 million demonstrates the platform’s expanding adoption. Clearwater’s pending acquisition by an investor group led by Permira and Warburg Pincus has led the company to withhold forward‑looking guidance, a decision that has tempered market enthusiasm despite the strong operational metrics.
Market reaction to the earnings was muted to slightly negative, largely because the pending acquisition caps upside potential and the revenue miss against consensus dampened investor sentiment. The company’s focus on GenAI integration, the expansion of Enfusion and Beacon, and the continued scaling of its core platform position it to maintain high margins and accelerate growth once the acquisition is completed.
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