Clearwater Analytics Holdings, Inc.

Good afternoon. Thank you for attending today's Clearwater Analytics First Quarter Earnings Conference call. My name is Tania and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, J.R. Ritchie, Vice President of Finance and Investor Relations. Please go ahead.

Thank you and welcome everyone to Clearwater Analytics first quarter 2022 financial results conference call. Joining me on the call today are Sandeep Sahai, Chief Executive Officer, and Jim Cox, Chief Financial Officer. After the remarks, we will open the call up to a question and answer session. I'd like to remind all participants that during this conference call, any forward-looking statements are made pursuant to the safe harbor provisions of the Private Security Litigation Reform Act of 1995. Expression of future goals, including business outlook, expectations for future financial performance, and similar items, including without limitation expressions using the terminology may, will, can, expect, and believe, and expressions which reflect something other than historical facts, are intended to identify forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the risk factors section of our filings with the FCC. Actual results may differ maturely from any forward-looking statements. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events that may arise after this conference call, except as required by law. For more information, please refer to the cautionary statements included in our earnings press release. Lastly, all metrics discussed on this call are non-GAAP, unless otherwise noted. A reconciliation can be found in the earnings press release that we have posted to our investor relations website. With that, I'll turn the call over to our Chief Executive Officer, Sandeep Zahai.

Thank you, JR, and welcome everyone. We had another strong quarter as we continue to deliver value to our clients, onboard new clients, and generate strong bookings to fuel further growth. More specifically, we have had consistent and durable revenue growth, high rates of revenue retention, and strong profitability. We're very happy to announce that revenue in the quarter grew 24% year over year to $70.8 million per quarterly record. Our annualized recurring revenue, ARR, increased 23.5% year over year, reaching more than $287 million. We're also happy to announce that our Q1 adjusted EBITDA grew to $18.9 million and increased over last year, even after incorporating additional public company costs while continuing to make investments in strategic initiatives. And testimony to our focus on client success, we are happy to report a gross revenue retention of 98% for the 13th consecutive quarter. Our success in Q1 continues to prove that the Clearwater platform not only dramatically improves the efficiency of investment operations teams, but also has become an enabler of growth for organizations around the globe. Our clients in the Search for Yield use our platform to scale globally, invest aggressively in widely varying asset types, and confidently acquire new businesses while integrating the operations rapidly. The Clearwater platform provides investment operations teams the infrastructure to expand on demand, obviating the need for large upfront investments, which is even more important during uncertain economic times. In Q1, we worked with a firm called Hobson & Company to study the value that Clearwater brings to clients. Hobson found that in addition to a significant decrease in operating costs compared to legacy tech, Clearwater offers much greater efficiency and enables recognizable increases in AGM. Our platform continues to be disruptive and is very effective. at radically simplifying our clients' investment operations. We operate in a very favorable competitive environment, especially as more clients like Catholic Life Insurance and Highmark move from legacy incumbent providers to Clearwater. We are especially proud of these wins because as you've heard me say many times before, with each new client, we improve our ability to manage and service the next, continually adding to the network effect. There were several exciting wins in Q1. A very large asset manager signed a significant deal with us to replace the legacy on-premise solution for accounting and client reporting for approximately $100 billion in assets. We also won Tito Price as a marketing client. Clearwater will provide a dramatically improved user experience for T-Row prices, growing roster of insurance clients who will now more easily manage their books of record while staying ahead of regulatory requirements. Naveen Asadmanpun signed an agreement to use Clearwater as his reporting solution. As Naveen grows their businesses globally, Clearwater's industry expertise and reporting capabilities will be a critical component supporting the business growth and expansion. Looking beyond our core markets, we signed our first French insurance client and our first European foundation. Both chose our SaaS platform to standardize the investment accounting operations across several countries. These clients prove that the platform successfully addresses the needs of adjacent markets. Our clients continue to adjust their portfolio as they look at the changing economic environment. Given market conditions, we increasingly see our clients add alternative assets to the investment portfolio. But as you likely know, alternatives introduce complexity into accounting, compliance, and risk management. And increasingly, we see clients turn to our platform to handle that complexity. The Clearwater platform, because it is a single instance, multi-tenant, cloud-based solution, allows us to meet the needs of clients and support the dynamic investment goals. We are not the only ones uncovering the need for improved automation for investment operations teams. In Deloitte's 2022 Insurance Industry Outlook, report they found that 69% of firms plan to spend more on investment data processing and 67% plan to spend more on analytics. This data further supports our premise that as insurance companies grow, expand, and merge, they need trusted partners to support their operations. This is why organizations like Harvard Mutual Insurance Cornerstone National Insurance and Citizens Property Insurance Company are bolstered by going live on the Clearwater platform in Q1. A key area of focus for us is new product offerings. We continue to gain traction for our new product, Clearwater Prism, a modular data and reporting platform. Let me describe some actual use cases. Clearwater Prism's open architecture allows for seamless aggregation of data across all assets. A large multinational insurer is utilizing Clearwater Prism and Clearwater's accounting solution to consolidate data across public and private assets and real estate. Prism enables this client to get a comprehensive view of their portfolio, even though we will not be accounting for the real estate assets. Clearwater PRISM will enable investment data aggregation without the need to build or maintain costly infrastructure for consolidated reporting analytics. A pension plan has chosen Clearwater PRISM as the foundation of a data and reporting platform to combine total plan data from multiple sources. Prism provides a solution even though investment accounting for the majority of their assets will initially not be done by Clearwater. And finally, a leading wealth manager has selected Clearwater Prism to provide data and reporting across multiple portfolio management solutions where Clearwater Prism serves solely as the aggregation and client reporting platform while doing none of the investment accounting. Overall, we are very excited about the progress we are making. We expect Clearwater Prism to extend Clearwater's cloud-based platform to new customer segments and help us grow wallet shares with existing customers. We are proud to share that our chief client officer, Subhi Sethi, won the Women in Technology and Data Awards by Waters Technology. She was recognized as the vendor professional of the year because she has onboarded large global clients to the Claywater platform and improved the operations of some of the world's largest investment teams. We know this is a well-deserved recognition of the impact she has had on her client's success. Before returning with a few closing thoughts, I would now like to hand the call over to our Chief Financial Officer, Jim Cox, to provide more details on our first quarter financial performance, as well as updated guidance for our second quarter and full year 2022.