10-K/A: Clearwater Analytics Amends 10-K, Details Governance & Compensation

Clearwater Analytics files an amendment to its 2025 annual report, providing detailed disclosures on corporate governance, executive compensation, and a proposed $8.4 billion merger.

Summary

• Clearwater Analytics, Inc. filed Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
• The amendment provides information previously omitted from the original filing, specifically covering Directors, Executive Officers and Corporate Governance (Item 10), Executive Compensation (Item 11), Security Ownership (Item 12), Certain Relationships and Related Transactions (Item 13), and Principal Accounting Fees and Services (Item 14).
• The company reported strong revenue growth in 2025, with total revenue increasing 62% to $731.4 million from $451.8 million in 2024.
• Annualized Recurring Revenue (ARR) grew 77% to $841.0 million in 2025 from $474.9 million in 2024.
• Adjusted EBITDA increased 70% to $248.2 million in 2025 from $145.7 million in 2024, with Adjusted EBITDA margin improving to 34% from 32%.
• A proposed acquisition by an investor group led by Permira Advisers LLC and Warburg Pincus LLC, valued at approximately $8.4 billion, was announced on December 20, 2025, with shareholders to receive $24.55 per share in cash.
• The company experienced a net loss of $40.3 million in 2025, a significant shift from a net income of $427.6 million in 2024.
• Loss from operations in 2025 was $7.7 million, compared to income from operations of $12.2 million in 2024.
• Net Revenue Retention Rate decreased to 109% as of December 31, 2025, from 116% as of December 31, 2024.
• The CEO pay ratio for 2025 was 242 to 1, with the median employee compensation at $86,868 and the CEO's total compensation at $20,987,353.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive due to strong top-line growth and an attractive acquisition offer, but the significant shift to a net loss and decreased net revenue retention rate introduce caution regarding underlying profitability and organic expansion.

Positives

• Total revenue increased by 62% to $731.4 million in 2025 from $451.8 million in 2024.
• Annualized Recurring Revenue (ARR) grew by 77% to $841.0 million in 2025 from $474.9 million in 2024.
• Adjusted EBITDA increased by 70% to $248.2 million in 2025 from $145.7 million in 2024.
• Adjusted EBITDA margin improved to 34% in 2025 from 32% in 2024.
• Gross Revenue Retention Rate remained strong at 98% as of December 31, 2025, consistent with the prior year and a historical trend of at least 98% for 27 of the past 28 quarters.
• The company's 2025 annual revenue growth rate of 62% for Performance Stock Units (PSUs) achieved maximum performance, translating to 110% of such PSUs being earned.
• The Board has a clawback policy for erroneous incentive compensation and robust stock ownership guidelines for executives and directors.
• The company maintains an anti-hedging and anti-pledging policy for employees and directors.
• The Audit Committee provides risk oversight, including cybersecurity risk.

Negatives

• Net loss in 2025 was $40.3 million, a significant decline from net income of $427.6 million in 2024.
• Loss from operations in 2025 was $7.7 million, compared to income from operations of $12.2 million in 2024.
• Net Revenue Retention Rate decreased to 109% as of December 31, 2025, from 116% as of December 31, 2024.
• The CEO pay ratio was 242 to 1, which may draw scrutiny from some stakeholders.

Risks

• The proposed merger with GT Silver BidCo, Inc. is subject to consummation; if terminated, the company expects to hold an annual meeting as a public company.
• General risks associated with the business are not detailed in this amendment, which focuses on Part III items, but the Audit Committee's risk oversight includes cybersecurity risk.

Future Outlook

The company is subject to a proposed acquisition by an investor group led by Permira and Warburg Pincus, valued at approximately $8.4 billion. If the merger is consummated, the company will become a wholly-owned subsidiary, and public stockholders will no longer participate in future stockholder meetings. If the merger agreement is terminated, the company expects to hold an annual meeting of stockholders in 2026 as a public company.

Management Comments

• We believe Mr. Aigrain's extensive experience in finance and as a chief executive officer, and his experience on the audit committees of public companies, including as chair, qualifies him to serve as a director of our Board.
• We believe Ms. Jones' deep expertise in the financial services and asset management sector serving markets all over the world, and her experience as a chief executive officer, qualifies her to serve as a director of our Board.
• We believe that Dr. Aghi's extensive experience as a chief executive officer and leader of global technology companies, including in particular his current role as the Executive Chairman of Kore.ai, an agentic generative AI company in the enterprise space, qualifies him to serve as a director of our Board.
• We believe that Mr. NieuweWeme's extensive experience as a chief executive officer and expertise in asset management and mergers and acquisitions qualifies him to serve as a director of our Board.
• We believe Mr. Sahai's successful leadership of CWAN into a period of strong and consistent growth, his deep understanding of the Company, technology operations and the investment accounting industry, and his experience as an entrepreneur and business leader, qualifies him to serve as a director of our Board.
• We believe that the Company and our stockholders are best served when executive officers manage the business with a long-term perspective.
• The Committee believes these severance payments and benefits are important from a recruiting perspective to provide some level of protection to our executive officers from having their employment terminated without cause, and that the amounts are reasonable when compared with similar arrangements adopted by comparable companies.

Industry Context

StockSavvy.ai notes that the proposed $8.4 billion acquisition by private equity firms Permira and Warburg Pincus highlights the continued interest in financial technology (Fintech) and investment management software sectors, particularly for companies demonstrating strong recurring revenue growth and improving EBITDA margins. The shift from net income to net loss, despite robust top-line growth, suggests significant investment in expansion or one-time expenses, a common characteristic in high-growth tech companies aiming for market dominance. The decrease in Net Revenue Retention Rate, while still healthy at 109%, warrants attention as it could indicate increased competition or challenges in expanding existing client relationships compared to the previous year.

Comparison to Industry Standards

• Clearwater Analytics' 62% revenue growth and 77% ARR growth in 2025 are exceptionally strong, potentially outperforming many established financial technology peers. For instance, a company like BlackLine (BL) reported 2023 revenue growth of 16%, and Paylocity (PCTY) reported 2023 revenue growth of 26.5%, indicating Clearwater's significantly higher growth trajectory.
• The 98% Gross Revenue Retention Rate is a strong indicator of customer satisfaction and product stickiness, comparable to best-in-class SaaS companies which often aim for 90%+ retention.
• The Net Revenue Retention Rate of 109% is solid, though a decrease from 116% in 2024. While still indicating expansion within existing accounts, it suggests a slight deceleration compared to prior performance, which could be a point of comparison against companies like CrowdStrike (CRWD) which consistently reports NRR above 120%.
• The transition from net income to a net loss of $40.3 million, despite strong revenue growth, suggests aggressive investment in growth initiatives, potentially including the acquisitions of Enfusion and Beacon mentioned in the compensation discussion. This is not uncommon for high-growth technology companies, but it contrasts with more mature, profitable peers in the financial software space.
• The Adjusted EBITDA margin of 34% is a healthy indicator of operational efficiency, especially for a company undergoing rapid expansion, and compares favorably to many high-growth SaaS companies that might operate at lower or negative EBITDA margins while prioritizing market share.

Management Changes

Corporate Governance

Related Party Transactions

• LLC Agreement: The Company is the sole managing member of CWAN Holdings, controlling its business and affairs. Permira and Warburg Pincus no longer hold LLC Interests.
• Tax Receivable Agreement (TRA) Amendment: One-time settlement payments of approximately $72.5 million were made, including $69.2 million to TRA Amendment Parties (affiliates of Prior Principal Equity Owners) and $3.3 million in cash bonuses to certain executive officers, terminating future TRA obligations to these parties.
• Registration Rights Agreement: Terminated on June 12, 2025, as Permira, Warburg Pincus, and Welsh Carson no longer held applicable shares.
• Stockholders Agreement: Terminated on various dates in 2024 and 2025 with respect to Permira, Warburg Pincus, and Welsh Carson, removing their rights to designate director nominees.
• Advisory Agreements: Entered into in April 2025 with former directors Kathleen A. Corbet and Jaswinder Pal Singh to serve as senior advisors for 12 months, in exchange for RSU grants valued at $200,000 each.
• Indemnification Agreements: The company is party to indemnification agreements with its directors and executive officers, providing customary indemnification and expense advancement.

Stakeholder Impact

• Shareholders: Will receive $24.55 per share in cash if the proposed $8.4 billion merger is consummated, representing a potential liquidity event. If the merger fails, they will remain public stockholders.
• Executive Officers: Received significant equity-based compensation tied to performance, and are subject to clawback policies and stock ownership guidelines. They also received a portion of the TRA settlement payments.
• Employees: Benefit from a tax-qualified 401(k) plan with company matching contributions and a broad range of health and welfare benefits. The median employee compensation was $86,868.
• Directors: Receive cash retainers and RSU grants, with specific one-time retainers for Special Committee members involved in the merger review. Former directors transitioned to advisory roles.
• Prior Principal Equity Owners (Permira, Warburg Pincus, Welsh Carson): Have significantly reduced their ownership, leading to the termination of various agreements (Registration Rights, Stockholders Agreement) and a one-time settlement of the Tax Receivable Agreement. Permira and Warburg Pincus are leading the investor group for the proposed acquisition.

Next Steps

• If the proposed merger is consummated, the company will become a wholly-owned subsidiary, and public stockholders will cease to exist.
• If the merger agreement is terminated, the company expects to hold an annual meeting of stockholders in 2026 as a public company.
• The Board will continue to monitor the company's performance against metrics throughout the year.
• The Compensation Committee intends to continue to consider shareholder concerns in determining executive compensation.
• The company will disclose any substantive amendments or waivers to the Code of Ethics on its website or in a Form 8-K.
• The 2026 Annual Meeting date has not yet been set.

Key Dates

Recommendation

The proposed acquisition at $24.55 per share provides a clear exit price for current shareholders, suggesting a 'hold' recommendation for those awaiting the merger's consummation. While the company demonstrated strong revenue and ARR growth, the significant shift to a net loss and a slight decline in Net Revenue Retention Rate in 2025 introduce concerns about underlying profitability and organic growth momentum if the merger were not to proceed. The current valuation is largely driven by the acquisition offer, limiting significant upside potential beyond the offer price, but also providing a floor. Investors should monitor the merger's progress closely.

Keywords

Clearwater Analytics, CWAN, SEC Filing, 10-K/A, Annual Report Amendment, Corporate Governance, Executive Compensation, Financial Performance, Revenue Growth, Adjusted EBITDA, Net Loss, Merger Agreement, Permira, Warburg Pincus, Stock Ownership, Audit Committee, Sarbanes-Oxley, Financial Technology, Investment Management Software