Q4 2024 Clearwater Analytics Holdings Inc Earnings Call
We are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Speaker Change: And now I'd like to welcome Joon Park head of Investor Relations to begin the conference.
Speaker Change: Thank you and welcome everyone to Clearwater analytics fourth quarter and full year 2024 financial results Conference call.
Speaker Change: Joining me on the call today are Sandeep, <unk>, Chief Executive Officer, and Jim Cox Chief Financial Officer.
Speaker Change: After their remarks, we will open the call to a question and answer session.
Speaker Change: I would 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 Securities Litigation Reform Act of 1095.
Speaker Change: Expressions of future goals intentions, and expectations, including in relation to business outlook future financial and product performance expectations for the timing of the infusion acquisition and its expected benefits and similar items, including without limitation expressions using the terminology may will can expect and believe.
Speaker Change: And expressions, which reflect something other than historical facts are intended to identify forward looking statements.
Speaker Change: <unk> looking statements involve a number of risks and uncertainties, including those discussed in the risk factors section of our filings with the SEC.
Speaker Change: Actual results may differ materially from any forward looking statements.
Speaker Change: 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.
Speaker Change: For more information please refer to the cautionary statement included in our earnings press release.
Speaker Change: Lastly, all metrics discussed on this call are presented on a non-GAAP or adjusted basis, unless otherwise noted.
Speaker Change: A reconciliation to GAAP results 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 side. Thank.
June: Thank you June.
Sandeep Side: I am pleased to report that Q4, 2024 was an outstanding quarter for our company.
Sandeep Side: Revenue for the quarter was $126 5 million.
Sandeep Side: 28% year on year ago.
Sandeep Side: Which I'm sure you will agree is spectacular.
Sandeep Side: <unk> grew to $474 $9 million.
Sandeep Side: A 25% year on year.
Sandeep Side: One of the highest increases since our IPO.
Coupled with our strong gross revenue retention.
Sandeep Side: This allows us to look ahead to 2025 and beyond with very high confidence.
Sandeep Side: And finally.
Sandeep Side: Adjusted EBITDA was $41 $7 million.
33% of revenue and up 39.
Sandeep Side: 10% year on year.
Sandeep Side: We continue to deliver very strong organic growth with increasingly higher unit economics and higher levels of profitability, all while investing heavily in strategic initiatives and innovation.
Sandeep Side: It was indeed, an outstanding quarter. This growth was made possible by success across our business dimensions of our business.
Sandeep Side: Number one an IRR grew to 116%.
Sandeep Side: As we have laid out on several occasions in the past.
Sandeep Side: One of the foundations of our growth strategy has been in our outgrowth.
Speaker Change: It Didnt holds a strong focus on client satisfaction and delight.
Sandeep Side: Investment in innovation and product development.
Speaker Change: Our robust commercial model.
Sandeep Side: And dedicated teams.
Sandeep Side: Lucas on driving a lot of our growth.
Sandeep Side: We are excited to deliver another outgrowth of 116% for the quarter and believe that it provides a very strong foundation for sustained growth number.
Sandeep Side: Number two widespread expansion across increasingly diverse market segments.
Sandeep Side: And geographies, we have a single instance, multi tenant platform.
Sandeep Side: And the ease with which it adapts to adjacent market segments and geographies.
Sandeep Side: Allows us to chart, our multiyear growth strategy with excellent visibility.
Sandeep Side: Growth without a focus on unit economics is never sustainable in the longer term.
Sandeep Side: And that's why you're continuing to see us incredibly focused on it.
Sandeep Side: I am pleased to report that our gross margin has grown exceptionally well for the quarter. Our gross margin grew 190 bps year on year.
Sandeep Side: And the 170 bps for the full year.
Sandeep Side: These are significantly higher.
Sandeep Side: And then the 50 bps per year improvement targets.
Sandeep Side: We had set on Investor day, two years back but at that time, we did not foresee the impact generally I would have on our business. We believe that we can expand unit economics this year.
Sandeep Side: Additional 50 bps.
Sandeep Side: And we now believe.
Sandeep Side: But the long term target for gross margin is north of 80%.
Sandeep Side: The combination of strong execution.
Sandeep Side: Development of Gen AI use cases.
Sandeep Side: And the benefits of a network effect provide us with ample opportunities to drive this expansion in margin journey.
Sandeep Side: Generally <unk> has the dual benefit of driving operational efficiency and providing customers with faster responses to the queries, where self serve agents. We have continued to invest heavily in this technology.
Sandeep Side: And believe that we are at the very leading edge of innovation in our industry.
These are significantly higher.
And then the 50 bps per year improvement target.
Sandeep Side: Enabled.
We had set on Investor day, two years back but at that time, we did not foresee the impact generative AI will have on our business.
Sandeep Side: By the fact that our platform uses a single security Master.
Sandeep Side: Across all our plants. It is gratifying to see the fruits of our labor come to life on overall profitability.
We believe that we can expand unit economics this year by an additional 50 bps.
Sandeep Side: Again, we see very strong performance.
Sandeep Side: Driven by expanding unit economics, and scalability benefits across various functions within our company.
And we now believe.
But the long term target for gross margin is north of 80%.
Sandeep Side: EBITDA grew by 350 bps for the year exceeding the already ambitious 200 bps goal, we outlined during investor day in 2023.
Combination of strong execution, our development of Gen AI use cases.
And the benefits of a network effect for <unk>.
Wide us with ample opportunities to drive this expansion in margin.
Sandeep Side: <unk> overall performance and unit economics flowed through to the bottom line almost entirely.
Generally <unk> has the dual benefit of driving operational efficiency and providing customers with faster responses to the queries.
Sandeep Side: Finally.
Sandeep Side: We expect to deliver another 200 bps in EBITDA growth in 2025.
We're self serve agents.
We are delivering a disruptive platform to the investment management industry.
We are continuing to invest heavily in this technology.
And believe that we are at the very leading edge of innovation in our industry.
Sandeep Side: One that is constantly getting better.
Sandeep Side: Because of our sustained investment in innovation.
Enabled.
By the fact that our platform uses a single security Master.
Approach and plan for organic growth remains largely unchanged, we believe that having many irons in the fire for driving growth.
Across all our clients. It is gratifying to see the fruits of our labor come to life.
Overall profitability.
Sandeep Side: Is the appropriate approach for delivering durable growth in our business. We are comfortable with the pace of improvements that we had previously outlined.
Again, we see very strong performance.
Driven by expanding unit economics, and scalability benefits across various functions within our company.
Sandeep Side: And both unit economics and profitability expansion, while we continue to make sustained investments to drive durable growth.
EBITDA grew by 350 bps for the year exceeding the already ambitious 200 bps goal.
Sandeep Side: The levels of growth are number one draw.
Outlined during Investor day in 2023.
Sandeep Side: Driving new logos in North America.
<unk> overall performance and unit economics flowed through to the bottom line almost entirely.
Sandeep Side: Well, we have the largest tam and the highest right to win.
Sandeep Side: Leveraging our high NPS and <unk> all.
Finally.
We expect to deliver another 200 bps in EBITDA growth in 2025.
Sandeep Side: All of these results in sustained strong win rates number two continued international expansion.
We are delivering a disruptive platform to the investment management industry.
Sandeep Side: Become the platform of choice.
One that is constantly getting better <unk>.
Sandeep Side: For the investment management industry in Europe, and Asia number three focusing on back to base investments to drive.
Of our sustained investment in innovation.
Approach and plan for organic growth remains largely unchanged, we believe that having many irons in the fire for driving growth.
Sandeep Side: 1% to four bps expansion in our core markets, we actively manage our investments in new products and.
Sandeep Side: A rigorous about unfunded investments that show limited traction.
Is the appropriate approach for delivering durable growth in our business. We are comfortable with the pace of improvements that we have previously outlined.
Sandeep Side: Conversely, we increased support for investments that resonate with our clients.
And both unit economics and profitability expansion, while we continue to make sustained investments to drive durable growth.
Sandeep Side: Number four.
Sandeep Side: Expanding our reach to asset owners beyond traditional insurance companies and culprits.
The levels of growth are number one do.
Sandeep Side: To now include state and local governments foundations rates pensions sovereign funds and in dollars.
Driving new logos in North America.
Well, we have the largest tam and the highest right to win.
Sandeep Side: Number five.
Leveraging our high NPS and <unk> sat ratings all of these results in sustained strong win rates number two continued international expansion to become the platform of choice.
Sandeep Side: Building, an effective channel of growth through partnership with other software providers system integrators and advisors.
Sandeep Side: This has been an under invested area for us.
Sandeep Side: And many companies generate substantial revenue from this channel we hope to see results later this year.
For the investment management industry in Europe, and Asia number three focusing on back to base investments to drive.
Sandeep Side: And in the years to come.
Sandeep Side: Number six continued selective M&A initiatives.
1% to four bps expansion in our core markets, we actively manage our investments in new products and a rigorous about unfunded investments that show limited traction.
Sandeep Side: And ensuring that any potential acquisition aligns with our long term strategic goals and number seven.
Sandeep Side: We believe our core Tam stands at approximately $5 9 billion.
Conversely, we increased support for investments that resonate with our clients.
Sandeep Side: I'll figure derived from the segments, where we have achieved a long term, 80% win rate with $474 $9 million <unk> at the end of 2024.
Number four.
Expanding our reach to asset owners beyond traditional insurance companies and culprits.
To now include state and local governments foundations, Reits pensions sovereign funds and in the outlets.
Sandeep Side: We have a long runway of growth ahead of us, let's discuss some of our initiatives in greater detail on new product initiatives.
Number five.
Sandeep Side: Which focuses on expanding into adjacent markets.
Building, an effective channel of growth through partnership with other software providers system integrators and advisors.
Sandeep Side: Developed in partnership with our clients.
Sandeep Side: These initiatives have played a significant role in driving engagement and growth in 2020 for other initiatives focused on platform modules that enhance customer efficiency.
This has been an underinvested area for us.
And many companies generate substantial revenue from this channel we hope to see results later this year.
Sandeep Side: Lp's mortgages regulatory reporting.
And in the years to come.
Number six continue.
Continued selective M&A initiatives.
Sandeep Side: <unk> risk and performance have all helped grow our business Clearwater expanded its footprint with existing clients.
And ensuring that any potential acquisition aligns with our long term strategic goals and number seven.
Sandeep Side: But also added marquee clients, such as Imperial Fund capital partners.
We believe our core Tam stands at approximately $5 9 billion.
Sandeep Side: And Victor <unk> capital management.
I'll figure derived from the segments, where we have achieved our long term, 80% win rate with $474 9 million <unk> at the end of 2024.
Sandeep Side: National Association of Realtors.
Sandeep Side: <unk> Corporation.
Sandeep Side: Open AI.
Sandeep Side: School Employees' retirement system of Ohio.
We have a long runway of growth ahead of us, let's discuss some of our initiatives in greater detail, our new product initiatives.
Sandeep Side: State of Louisiana.
United Nations Federal credit Union.
Sandeep Side: WCF insurance and several others.
Which focuses on expanding into adjacent markets.
Speaker Change: Insurance sector or expansion among mega and large insurers continues.
Developed in partnership with our clients.
Speaker Change: I'd like to highlight our global commercial property insurance provider.
These initiatives have played a significant role in driving engagement and growth in 2024.
Speaker Change: Our ability to deliver automated scalable investment accounting processes set us apart.
Other initiatives focused on platform modules that enhance customer efficiency.
Speaker Change: Exposing the limitations of their legacy systems, we also welcomed our Nashville property and casualty workers' compensation insurer.
Lp's mortgages regulatory reporting funds risk and performance have all helped grow our business Clearwater expanded our footprint with existing clients.
Speaker Change: Serving businesses across the U S.
According to our client.
<unk> also added marquee clients, such as Imperial Fund capital partners.
Speaker Change: Modern platform.
Speaker Change: The only solution.
Speaker Change: That meets their needs for asset class diversification streamline operations and long term scalable growth.
Victor: And Victor <unk> capital management.
National Association of Realtors.
Victor: Nucor Corporation.
Speaker Change: In the asset management industry, leading all CIO has chosen to replace their legacy system selecting us as the cornerstone.
Victor: Open AI.
Victor: School employees retirement system of Ohio.
Victor: State of Louisiana.
Victor: United Nations Federal credit Union.
Speaker Change: The long term expansion with the goal of growing their assets to $50 billion in AUM.
Victor: <unk> insurance and several others.
Speaker Change: N.
Speaker Change: Clearwater will replace six other platforms dramatically simplifying the technology infrastructure asset owners beyond the traditional insurance and corporate segments continue to expand in scope and scale, leading organizations like Alameda County employees retirement Association.
Victor: Insurance sector or expansion among mega and large insurers continues.
Victor: I'd like to highlight our global commercial property insurance provider.
Victor: Our ability to deliver automated scalable investment accounting processes set us apart.
Victor: Exposing the limitations of their legacy systems, we also welcomed our Nashville property and casualty workers' compensation insurer.
Speaker Change: We'll rely on Clearwater for data validation Shadow book of record accounting and total client reporting across the entire investment portfolio, including alternative asset in the public sector.
Victor: Serving businesses across the U S.
Victor: According to our client.
Speaker Change: Welcome to the state of Nevada, and the state of Louisiana to play Award.
Victor: Modern platform.
Victor: The only solution.
Victor: That meets their needs for asset class diversification streamline operations and long term scalable growth.
Speaker Change: When faced with significant key person risk.
Speaker Change: And then internally built outdated local government investment pool system.
Victor: In the asset management industry, our leading all CIO has chosen to replace the legacy system selecting us as the cornerstone.
Speaker Change: The state of Nevada selected Clearwater.
Speaker Change: Manage their entire <unk> and general fund portfolio distinct treasury team and the pool participants will be able to seamlessly navigate lgs complete with participant portal logins and statement preparation.
Victor: Of the long term expansion with the goal of growing their assets to $50 billion.
Victor: AUM.
Victor: Clearwater will replace six other platforms dramatically simplifying the technology infrastructure asset owners beyond the traditional insurance and corporate segments continue to expand in scope and scale, leading organizations like Alameda County employees retirement Association.
Speaker Change: All four one central secure platform.
Speaker Change: Additionally, the state employees' retirement system of Ohio selected Clearwater.
Speaker Change: Powerful investment accounting solution that can do.
Victor: We will rely on Clearwater for data validation Shadow book of record accounting and total client reporting across the entire investment portfolio, including alternative asset in the public sector.
Speaker Change: Anything and everything with the counting across all asset classes. These wins build on our reputation as a trusted partner for investment and pension management solutions.
Speaker Change: Supported by teams dedicated to this market our expansion in Europe Asia and Africa.
Victor: We welcome the state of Nevada, and the state of Louisiana to pre award.
Victor: When faced with significant key person risk.
Speaker Change: Has brought new clients.
Victor: And then internally built outdated local government investment pool system.
Speaker Change: One notable success in Asia Pacific.
Speaker Change: <unk>, a leading asset management company that adopted Clearwater to unify the insurance assets under a single comprehensive platform.
Victor: The state of Nevada selected Clearwater to manage their entire <unk> and general fund portfolio distinct treasury team and the pool participants will be able to seamlessly navigate lgs complete with participant portal logins and statement preparation.
Speaker Change: We couldnt be more excited to support this asset managers ambitious expansion plans across multiple Asian countries.
Speaker Change: <unk> is designed to scale effortlessly and we are proud of the growth that it enables.
Victor: All four one central secure platform.
Victor: Additionally.
Speaker Change: To highlight one of our cross sell successes.
Victor: The state employees' retirement system of Ohio.
Speaker Change: I'm pleased to welcome a U S investment management firm specializing in real estate and alternative investments that is selected Clearwater to empower.
Victor: Selected Clearwater ill put a powerful investment accounting solution that can do anything and everything with the counting across all asset classes. These wins build on our reputation as a trusted partner for investment and pension management solutions.
Speaker Change: Mortgage loan team.
Speaker Change: Solution provides deep visibility into their expanded agency and non agency mortgage backed securities repurchase agreements and <unk> instruments.
Victor: Supported by teams dedicated to this market our expansion in Europe.
Victor: Asia and Africa.
Speaker Change: Fifth Clearwater.
Victor: Has brought new clients.
Speaker Change: The investment professionals gain a comprehensive platform to drive growth and make well informed decisions throughout the entire loan lifecycle.
Victor: One notable success in Asia Pacific.
Victor: And Walt a leading asset management company that adopted Clearwater to unify the insurance assets under a single comprehensive platform.
Speaker Change: From origination and deal management to analytics accounting and reporting.
This win exemplifies the single pane of glass experience. Our platform is designed to deliver these examples are just a glimpse of our expanding portfolio of new client wins showcasing <unk> unmatched ability.
Victor: We couldnt be more excited to support this asset managers ambitious expansion plans across multiple Asian countries. Our platform is designed to scale effortlessly and we are proud of the growth that it enables.
Victor: To highlight one of our cross sell successes I am.
Speaker Change: To meet diverse client needs.
We are in the business of transformation Sim.
Victor: Pleased to welcome a U S investment management firm specializing in real estate and alternative investments.
Speaker Change: Simplifying complex legacy systems, and empowering clients to achieve bold.
Victor: The selected tier water to empower its mortgage loan team a solution.
Speaker Change: Ambitious growth targets our platform is precision engineered.
Victor: <unk> provides deep visibility into their expanded agency and non agency mortgage backed securities repurchase agreements and <unk> instruments.
To deliver purpose built solutions that replace outdated inflexible legacy systems.
Speaker Change: Keeping our clients ahead in a fast moving investment management landscape.
Victor: Clearwater.
Victor: The investment professionals gain a comprehensive platform to drive growth and make well informed decisions throughout the entire loan lifecycle.
Speaker Change: We continue to build and support these initiatives and our investment in R&D will continue to grow in dollar terms, even as the fall as a percent of revenue.
Victor: From origination and deal management to analytics accounting and reporting.
Speaker Change: Fully consistent with the plans we have discussed on earlier calls.
Victor: This win exemplifies the single pane of glass experience our platform is designed to deliver.
Speaker Change: Now, let me turn to the acquisition of infusion.
Speaker Change: Before I go any further I believe that our first order of business is to ensure that the core Clearwater platform continues to perform and deliver.
Victor: These examples are just a glimpse of our expanding portfolio of new client wins showcasing <unk> unmatched ability.
Speaker Change: The durable and efficient growth.
Victor: To meet diverse client needs.
Speaker Change: <unk> has delivered over the past failures that is a key message I've emphasized to our teams we have had the opportunity to.
Victor: We are in the business of transformation.
Victor: Simplifying complex legacy systems, and empowering clients to achieve bold.
Speaker Change: To engage with the infusion of leadership.
Victor: Ambitious growth targets our platform is precision engineered.
Speaker Change: And subsequently with the entire team in a townhall offsetting.
Speaker Change: We've also had the opportunity to meet with several teams in person.
Victor: To deliver purpose built solutions that replace outdated inflexible legacy systems, keeping our clients ahead in a fast moving investment management landscape.
I'm excited to report that all of us.
Speaker Change: Sure the enthusiasm and commitment to jointly build.
Speaker Change: Our market, leading front to back platform that can transform our industry.
Victor: We continue to build and support these initiatives and our investment in R&D will continue to grow in dollar terms, even as the fall as a percent of revenue.
Speaker Change: Clearwater in the infusion share are strong.
Speaker Change: Multi year growth track record powered by next generation single instance, multi tenant platforms designed for an increasingly complex investment landscape.
Victor: Fully consistent with the plans we have discussed on earlier calls.
Victor: Now, let me turn to the acquisition of infusion.
Victor: Before I go any further I believe that our first order of business is to ensure that the core Clearwater platform continues to perform and deliver.
Speaker Change: Both companies offer an end to end platform.
Speaker Change: To the needs of the market segments. Each of US focuses on and have been very successful in doing that.
Victor: The durable and efficient growth.
Victor: <unk> has delivered over the past few years that is a key message I've emphasized to our teams we have had the opportunity to.
Speaker Change: However, when viewed across market segments sizes and industries, including.
Victor: To engage with the infusion of leadership.
Speaker Change: All kinds of asset managers and asset owners.
Victor: And subsequently with the entire team in a downhole offsetting.
Speaker Change: Core strengths are entirely complementary and fusion.
Victor: We've also had the opportunity to meet with several teams in person.
Speaker Change: Provides a best in class front office solution.
Victor: I am excited to report that all of us.
While Clearwater <unk> platform excels.
Victor: Sure the enthusiasm and commitment to jointly build.
Speaker Change: In middle and back office capabilities, the strategic alignment will enable us to deliver integrated solutions that meet the diverse needs of the investment management industry.
Victor: Our market, leading front to back platform that can transform our industry.
Victor: Clearwater and infusion shared a strong multi year growth track record powered by next generation single instance, multi tenant platforms designed for an increasingly complex investment landscape.
Speaker Change: We held a multiday meeting of leaders from both organizations to align on the details of our shared strengths working together, we defined our priorities and they include number one.
Speaker Change: Accelerate our goal of building a front to back platform for the entire investment lifecycle.
Victor: Both companies offer an end to end platform.
Victor: To the needs of the market segments. Each of US focuses on and have been very successful in doing that.
Speaker Change: And thereby albeit the need for having multiple systems that need to be constantly have created.
Victor: However, when viewed across market segments sizes and industries, including.
Speaker Change: That by itself is a game changer.
Speaker Change: This should also dramatically reduce.
Victor: All kinds of asset managers and asset owners.
Speaker Change: The need for reconciling data.
Speaker Change: Between the front middle and back office, which has been a long standing problem for our industry. Another.
Victor: Core strengths are entirely complementary and fusion.
Victor: Provides a best in class front office solution.
Speaker Change: Another game changer youth.
Using that same data for risk compliance and regulatory reporting will alter the efficiency of these enabling functions.
Victor: While Clearwater <unk> platform excels.
Victor: In middle and back office capabilities, the strategic alignment will enable us to deliver integrated solutions that meet the diverse needs of the investment management industry.
Speaker Change: Very meaningful number two.
Speaker Change: Meaningfully improve a joint right to win in the asset management industry.
Victor: We held a multiday meeting of leaders from both organizations to align on the details of our shared strengths.
Speaker Change: Across strategies sizes and geographies.
Speaker Change: By combining the IP engineering and product teams of Clearwater.
Victor: Working together, we defined our priorities and they include.
Speaker Change: Infusion and jumped technology, all under a unified leadership.
Victor: Number one.
Victor: Accelerate our goal of building a front to back platform for the entire investment lifecycle.
Speaker Change: We expect to build on transfer related and comprehensive platform for the largest Tam we have number three.
Victor: And thereby albeit the need for having multiple systems that need to be constantly have created.
Speaker Change: Secondly offer infusions investment book of record Autunite bar.
Victor: That by itself is a game changer, Bishop also dramatically reduce the need for reconciling data.
Speaker Change: Portfolio management system in order and execution management system.
Speaker Change: To play order clients furthering our one to four the journey.
Victor: Between the front middle and back office, which has been a long standing problem for our industry. Another.
Speaker Change: Number four.
Speaker Change: Refocus and dedicated.
Speaker Change: Product engineering operations and GDN resources.
Victor: Another game changer youth.
Victor: Using that same data for risk compliance and regulatory reporting will alter the efficiency of these enabling functions.
Speaker Change: On the hedge fund market to enhance and grow and fusions leadership position is another key priority <unk>.
Victor: Very many number two.
Speaker Change: <unk> focus and teams make a big difference.
Victor: Meaningfully improve a joint right to win in the asset management industry.
Speaker Change: And we believe that this realignment will result in faster growth.
Victor: Across strategies sizes and geographies.
Speaker Change: Number five.
Victor: By combining the IP engineering and product teams of Clearwater.
Speaker Change: Use infusions greater presence in Europe, and Asia to drive faster adoption of our platform.
Victor: Infusion and jumped technology, all under a unified leadership.
Speaker Change: The international market represents approximately 50% of our Tam and.
Victor: We expect to build on transfer related and comprehensive platform for the largest Tam we have number three.
Speaker Change: And having additional resources across these geographies will help position us better.
Victor: <unk> offer and fusions investment book of record <unk>.
Speaker Change: Number six improving our gross margin and achieving cost synergies that will create a financially compelling business law ultimately though.
Victor: Portfolio management system in order and execution management system.
Victor: To Clearwater clients furthering our one to four the journey.
Speaker Change: This acquisition is about growth and industry leadership.
Victor: Number four.
Speaker Change: We also expect to realize strong synergies and sustained improvement in unit economics, we are enthusiastic about the opportunity to collaboratively build.
Refocus and dedicate.
Victor: Product engineering operations and GDN resources.
Victor: On the hedge fund market to enhance and grow and fusions leadership position is another key priority <unk>.
Speaker Change: Our best in class platform for the entire investment lifecycle.
Speaker Change: That we believe simply does not exist in our industry.
Victor: <unk> focus and teams make a big dip.
Speaker Change: How does the leadership meeting we have initial plans for each of these priorities and expect to hit the ground running when we close in quarter. Two so what lies ahead.
Victor: And we believe that this realignment will result in faster growth.
Number five.
Victor: Use infusions greater presence in Europe, and Asia to drive faster adoption of our platform.
Speaker Change: A comprehensive front to back platform that serves industries of all sizes that is our promise.
Victor: The international market represents approximately 50% of our Tam and.
Speaker Change: We're scaling with our clear vision.
Victor: And having additional resources across these geographies will help position us better.
Speaker Change: Excited about the journey we're on.
Speaker Change: And remain committed to delivering exceptional value to our clients employees and shareholders.
Victor: Number six improving our gross margin and achieving cost synergies that will create a financially compelling business model ultimately though.
Speaker Change: With that I'll hand, the call to Jim to dive deeper into our financial results.
Victor: This acquisition is about growth and industry leadership.
Jim: Thanks Cindy.
Speaker Change: I am proud to report an outstanding Q4, and full year 2024 results, which continued the impressive momentum from the prior three quarters of 2024.
Victor: We also expect to realize strong synergies and sustained improvement in unit economics, we are enthusiastic about the opportunity to collaboratively build.
Speaker Change: Among our many stellar results. It was most satisfying to report NRI of 116 this quarter a full year earlier than the goal. We stated in our Investor day back in September 2023.
Victor: Our best in class platform for the entire investment lifecycle.
Victor: That we believe simply does not exist in our industry.
Speaker Change: How does the leadership meeting.
We have initial plans for each of these priorities and expect to hit the ground running when we close in quarter two.
Speaker Change: Overall, our key metrics were exceptional across the board in Q4 with multiple record highs.
Speaker Change: So what lies ahead.
Speaker Change: I'd also like to take a quick moment to thank our clients and employees, who made this consistent track record of excellence possible.
Speaker Change: Hence of front to back platform that serves industries of all sizes.
Speaker Change: <unk> is our promise we are scaling with our clear vision.
Speaker Change: While investors have come to expect this performance as a routine occurrence in reality it.
Speaker Change: Cited about the journey we're on.
Speaker Change: And remain committed to delivering exceptional value to our clients employees and shareholders.
Speaker Change: It's quite an accomplishment and it takes the hard work and relentless dedication of individuals and the alignment of teams to our goals through out the organization to achieve these stellar results.
Speaker Change: With that I'll hand, the call to Jim to dive deeper into our financial results.
Jim: Thanks Cindy.
Jim: I am proud to report an outstanding Q4, and full year 2024 results, which continued the impressive momentum from the prior three quarters of 2024.
Again.
Speaker Change: We achieved full year revenue of $451 $8 million with year over year growth of 22, 7%.
Jim: Among our many stellar results. It was most satisfying to report NRI of 116 this quarter a full year earlier than the goal. We stated in our Investor day back in September 2023.
Speaker Change: For additional perspective.
Speaker Change: <unk> also comfortably beat the midpoint of the original guidance, we announced back on February 28, 2024 for full year 2024 by $17 $8 million.
Jim: Overall, our key metrics were exceptional across the board in Q4 with multiple record highs.
Speaker Change: In addition.
Speaker Change: The year over year growth of 22, 7% marked yet another year in which Clearwater grew revenue by more than 20%.
Jim: I'd also like to take a quick moment to thank our clients and employees, who made this consistent track record of excellence possible.
Speaker Change: In Q4, 2024, we delivered $126 $5 million in revenue.
Jim: While investors have come to expect this performance as a routine occurrence in reality it's.
Jim: It's quite an accomplishment and it takes the hard work and relentless dedication of individuals and the alignment of teams to our goals through out the organization to achieve these stellar results.
Speaker Change: This translates to an impressive 27, 7% year over year revenue growth and beat guidance by $6 $3 million.
Speaker Change: The NAC made the most significant set of a county and designation changes in over a decade.
Jim: Again.
Jim: We achieved full year revenue of $451 $8 million with year over year growth of 22, 7%.
Speaker Change: And those are effective in early 2025.
Speaker Change: Several of our insurance clients or somewhat unprepared and sought our help in ensuring compliance with these new rules.
Jim: For additional perspective.
<unk> also comfortably beat the midpoint of the original guidance, we announced back on February 28, 2024 for full year 2024 by $17 $8 million.
Speaker Change: We plan to do the work in both Q4 2024 and in Q1 of 2025.
Speaker Change: But we were able to utilize some third party resources to assist us to deliver those services more quickly than we had planned.
Jim: In addition.
Jim: The year over year growth of 22, 7% marked yet another year in which Clearwater grew revenue by more than 20%.
Speaker Change: Customers were delighted to get the work completed before the end of the year.
Speaker Change: There was about $3 million in incremental revenue in the quarter relative to our expectations. When we provided our Q4 guidance.
Jim: In Q4, 2024, we delivered $126 $5 million in revenue.
Jim: This translates to an impressive 27.
Speaker Change: The third party expenses associated with that additional work was also booked in Q4.
Jim: 7% year over year revenue growth and beat guidance by $6 $3 million.
Speaker Change: Because these services are not expected to re occur they were not included in the amounts reported for <unk> or NR.
Jim: The NAC made the most significant set of a county and designation changes in over a decade.
Speaker Change: Annualized recurring revenue or <unk>.
Jim: And those are effective in early 2025.
Speaker Change: At the end of December 2024 was a record $474 $9 million, representing a robust year over year increase of 25, 3%.
Jim: Several of our insurance clients or somewhat unprepared and sought our help in ensuring compliance with these new rules.
Jim: We plan to do the work in both Q4 2024 and in Q1 of 2025.
Speaker Change: The $379 $1 million in the prior year.
Speaker Change: In addition.
Jim: But we were able to utilize some third party resources to assist us to deliver those services more quickly than we had planned.
Speaker Change: As of December 31, 2024 clear water platform processes and reports on Inc. <unk> eight trillion dollars in assets daily, which represents an increase of one five trillion dollars over the prior year.
Jim: Customers were delighted to get the work completed before the end of the year.
Jim: There was about $3 million in incremental revenue in the quarter relative to our expectations. When we provided our Q4 guidance.
Speaker Change: Additionally.
Speaker Change: We grew the number of clients with over $1 million in our two 100 from.
Jim: The third party expenses associated with that additional work was also booked in Q4.
Speaker Change: From the prior year's 86.
Speaker Change: Achieving an impressive triple digits.
Jim: Because these services are not expected to re occur they were not included in the amounts reported for <unk>.
Speaker Change: In Clearwater clients with over $1 million in Arrow.
Speaker Change: We expect to further increase these record breaking numbers in the future as we continue to both win new logo clients and also wind cross sell initiatives and layer on additional assets with existing clients as well as cross sell additional products to obtain more of our clients' wallet share.
Jim: Or NRI.
Jim: Annualized recurring revenue or <unk>.
Jim: At the end of December 2024 was a record $474 $9 million, representing a robust year over year increase of 25, 3%.
Speaker Change: The program, we call one to four Bips.
Jim: From the $379 $1 million in the prior year.
Speaker Change: Now, let's turn to profitability.
Speaker Change: We've continued our strong margin expansion path by delivering $145 $7 million in EBITA in the full year 2024.
Jim: In addition.
Jim: As of December 31, 2020 for the clear water platform processes and reports on ink eight.
Jim: Pete.
Speaker Change: With an impressive year over year growth rate of 37, 6%.
Jim: In dollars in assets daily, which represents an increase of one five trillion dollars.
Speaker Change: And an EBIT margin for the full year of 32, 2% comfortably, beating our guidance for the full year 2024.
Jim: Over the prior year.
Jim: Additionally.
Jim: We grew the number of clients with over $1 million in our two 100 from.
Speaker Change: In Q4 2024.
Jim: From the prior year's 86.
Speaker Change: We achieved an EBITDA of $41 $7 million with a record high EBIT margin of 33% that beat our guidance for the quarter by $3 $2 million.
Jim: Achieving an impressive triple digit.
Jim: In Clearwater clients with over $1 million in Arrow.
Jim: We expect to further increase these record breaking numbers in the future as we continue to both win new logo clients and also wind cross sell initiatives and layer on additional assets with existing clients as well as cross sell additional products to obtain more of our clients' wallet share.
Speaker Change: Our strong margin expansion path was also reflected in our gross margin with a record high.
Speaker Change: 78, 2%.
Speaker Change: Gross margin for the full year 2024.
Jim: The program, we call 1% to four Bips.
Speaker Change: In Q4, 2024, and gross margin of 78, 8%.
Jim: Now, let's turn to profitability.
Speaker Change: This consistent achievement in margin expansion underscores the continued profitable unit economics efficacy of our growth initiatives and the strong value add that we provide to our clients.
Jim: We've continued our strong margin expansion path by delivering $145 $7 million in EBITA in the full year 2024.
Jim: With an impressive year over year growth rate of 37, 6%.
Speaker Change: While free cash flow in the quarter was a negative $29 $8 million in December 2024.
Jim: And an EBIT margin for the full year of 32, 2% comfortably, beating our guidance for the full year 2024.
Speaker Change: Unaffiliated shareholders approved the one time payment to terminate the company's tax receivable agreement.
Jim: In Q4 2024.
Jim: We achieved an EBITDA of $41 $7 million with a record high EBIT margin of 33% that beat our guidance for the quarter by $3 $2 million.
Speaker Change: Which was.
$72 $5 billion, plus approximately $6 $5 million in third party expenses.
Speaker Change: Absent that change our working capital continues to noticeably improve with our day sales outstanding decreasing to 77 days in Q4 from 86 in Q4 of last year.
Jim: Our strong margin expansion path was also reflected in our gross margin with a record high.
Jim: 78, 2%.
Jim: Gross margin for the full year 2024 in Q4, 2024, and gross margin of 78, 8%.
Speaker Change: As a result, we ended Q4 with $285 $8 million in cash cash equivalents and investments.
Jim: This consistent achievement in margin expansion underscores the continued profitable unit economics efficacy of our growth initiatives and the strong value add that we provide to our clients.
Speaker Change: Current total debt is $45 $9 million and that results in net cash holdings of approximately $240 million.
Speaker Change: I previously mentioned, we increased our net revenue retention rate to 116% from the prior year's 107%.
Jim: While free cash flow in the quarter was a negative $29 $8 million in December 2024 are unaffiliated shareholders approved the one time payment to terminate the company's ex receivable agreement.
Speaker Change: This really represents a significant achievement.
Speaker Change: Especially gratifying given in a current 12 months ahead of our original scheduled target date of the end of 2025.
Jim: Which was.
Jim: $72 $5 million, plus approximately $6 $5 million in third party expenses.
Speaker Change: Cheap at these results starts with our world class and consistent gross revenue retention, which was 98% again with Q4.
Jim: Absent that change our working capital continues to noticeably improved with our day sales outstanding decreasing to 77 days in Q4 from 86 in Q4 of last year.
Speaker Change: So of the core platform across clients was very strong at nearly 7%.
Speaker Change: While new product cross sell was 3% of the growth. This year, we yielded nearly 5% price increases across the portfolio.
Jim: As a result, we ended Q4 with $285 8 million in cash cash equivalents and investments.
Speaker Change: While AUR expansion provided.
Speaker Change: <unk> the growth from 98% at gross retention.
Jim: Current total debt is $45 $9 million and that results in net cash holdings of approximately $240 million.
Speaker Change: 260%.
Speaker Change: Net revenue retention.
At Clearwater It is incredibly important to set out and achieve ambitious goals and so we are very proud to have achieved this goal for the first time.
Jim: As I previously mentioned, we increased our net revenue retention rate to 116%.
Jim: The prior year's 107%.
Speaker Change: However, the goal was not to achieve <unk> 115, once but to achieve it reliably and consistently with the durability or investors expect in all aspects of our business and we know there is more work to do to deliver these results consistently.
Jim: This really represents a significant achievement.
Jim: Especially gratifying given in a current 12 months ahead of our original scheduled target date of the end of 2025.
Jim: Cheap at these results starts with our world class and consistent gross revenue retention, which was 98% again with Q4.
Speaker Change: In addition to the terrific revenue and non-GAAP results, we achieved GAAP net income.
Jim: So of the core platform across clients was very strong at nearly 7%.
Speaker Change: And a pretty impressive wanted that we.
Speaker Change: We reported $423 million for GAAP net income in Q4 that.
Jim: While new product cross sell was 3% of the growth. This year, we yielded nearly 5% price increases across the portfolio.
Speaker Change: That compares to a GAAP net loss of $3 $4 million in Q4 of 2023.
Jim: While AUR expansion provided.
Speaker Change: As much as we appreciate the very large GAAP net income it was created by the release of the deferred tax valuation allowance in Q4.
Jim: <unk> of the growth with 98% at gross retention.
Jim: 260%.
Jim: Net revenue retention.
Speaker Change: At Clearwater It is incredibly important to set out and achieve ambitious goals and so we are very proud to have achieved this goal for the first time.
Speaker Change: We now have approximately $600 million deferred tax asset on our balance sheet.
Speaker Change: And as a result, our cash tax payments will be very limited over the next few years.
Speaker Change: However, the goal was not to achieve <unk> 115, one.
Speaker Change: Now, let's turn to guidance for the full year 2025, we expect revenue to be.
But to achieve it reliably and consistently with the durability or investors expect in all aspects of our business and we know there is more work to do to deliver these results consistently.
Speaker Change: <unk>.
Speaker Change: $535 $5 billion to $542 million on a standalone basis, representing an initial year over year growth rate of approximately 19% to 20%.
Speaker Change: In addition to the terrific revenue and non-GAAP results.
Speaker Change: GAAP net income.
Speaker Change: We currently expect the infusion acquisition to close in the second quarter of 2025, and we will update all our full year guidance to reflect the combined company at that time.
And a pretty impressive wanted that.
Speaker Change: We reported $423 million for GAAP net income in Q4.
Speaker Change: That compares to a GAAP net loss of $3 $4 million in Q4 of 2023.
Speaker Change: For the full year 2025, we expect EBIT.
Speaker Change: As much as we appreciate the very large GAAP net income it was created by the release of the deferred tax valuation allowance in Q4.
Speaker Change: To be a $180 million to $285 million, representing an adjusted EBITA margin of 34% for the year for the first quarter of 2025, we expect revenue to be $125 million, representing a year over year growth rate of approximately 22%.
Speaker Change: We now have an approximately $600 million deferred tax asset on our balance sheet.
Speaker Change: As a result, our cash tax payments will be very limited over the next few years.
Speaker Change: Which is a strong start to the year for year over year growth.
Speaker Change: Now, let's turn to guidance for the full year 2025, we expect revenue to be between five.
Speaker Change: Note that approximately $3 million of revenues and associated expense related to the <unk> project expected to be recognized in Q1 of 2025 was recognized in Q4 2024.
Speaker Change: 535, $5 billion to $542 million on a standalone basis, representing an initial year over year growth rate of approximately 19% to 20%.
In terms of adjusted EBITDA guidance for the first quarter of 2025, we expect EBITDA to be 41 $5 million, representing an adjusted EBITDA margin of 33, 2% or approximately 200 basis points higher than the prior year Q1 for the year.
Speaker Change: We currently expect the infusion acquisition to close in the second quarter of 2025, and we will update all our full year guidance to reflect the combined company at that time.
Speaker Change: For the full year 2025, we expect to EBIT.
Speaker Change: Year, we currently expect equity based compensation and related payroll taxes to be $106 million basically flat for the third year in a row.
Speaker Change: To be $180 million to $285 million, representing an adjusted EBITA margin of 34% for the year for.
Speaker Change: With our continued revenue growth, we expect equity based compensation will now represent less than 20% of revenues for 2025.
Speaker Change: For the first quarter of 2025, we expect revenue to be $125 million, representing a year over year growth rate of approximately 22%.
Speaker Change: Depreciation and amortization before considering the impact of the infusion acquisition will be $13 million in 2025.
Speaker Change: Which is a strong start to the year for year over year growth.
Speaker Change: Please note that approximately $3 million of revenues and associated expense related to the <unk> project expected to be recognized in Q1 of 2025 was recognized in Q4 2024.
Speaker Change: Although we will pay only a limited amount in cash taxes, we will continue to utilize non-GAAP tax rate of 25% for 2025.
Speaker Change: Lastly, we expect our share count for the year again absent the impact of acquisitions to be 263 million shares on a fully diluted basis with that I'll turn it over to Cindy to provide some closing thoughts before questions.
Speaker Change: In terms of adjusted EBITDA guidance for the first quarter of 2025, we expect EBITDA to be 41 $5 million, representing an adjusted EBITDA margin of 33, 2% or approximately 200 basis points higher than the prior year Q1 for the.
Cindy: Thank you Jim.
Cindy: This quarter's stellar performance and record revenue growth bolstered by a 116% MLR.
Speaker Change: Year.
Speaker Change: We currently expect equity based compensation and related payroll taxes to be $106 million basically flat for the third year in a row.
Cindy: It reflects a remarkable execution of our strategic initiatives and the trust that our clients place in us.
Speaker Change: With our continued revenue growth, we expect equity based compensation will now represent less than 20% of revenues for 2025.
Cindy: We're not only responding to market needs.
Cindy: But also actively shaping the future of investing with a powerful scalable platform.
Speaker Change: Depreciation and amortization before considering the impact of the infusion acquisition will be $13 million in 2025.
Cindy: I'm proud of our team's dedication and a shared commitment.
Cindy: Through operational excellence.
Speaker Change: Although we will pay only a limited amount in cash taxes, we will continue to utilize non-GAAP tax rate of 25% for 2025.
Cindy: Which positions us for sustained revenue growth and value creation for our clients employees and shareholders alike, but the acquisition of infusion.
Speaker Change: Lastly, we expect our share count for the year again absent the impact of acquisitions to be 263 million shares on a fully diluted basis with that I'll turn it over to Cindy to provide some closing thoughts before questions.
Cindy: We are bringing together two very strong companies.
Cindy: And we plan to build a truly transformative platform for the investment management industry.
Cindy: We look forward to building on this momentum and delivering on our plans in the quarters and years to come. Thank you.
Cindy: Thank you Jim.
Speaker Change: This quarter stellar performance and record revenue growth bolstered by a 116% MLR.
Cindy: We will now begin the Q&A session.
Speaker Change: If you'd like to ask a question. Please dial star one on your telephone keypad. If for any reason you need to remove your question you can dial star two.
Speaker Change: It reflects a remarkable execution of our strategic initiatives and the trust that our clients place in us.
Speaker Change: We are not only responding to market needs.
Again to ask a question dial star one.
Speaker Change: As a reminder, if you are using a speakerphone on today's call. Please remember to pick up your handset before asking your question.
Speaker Change: But also actively shaping the future of investing with a powerful scalable platform.
Speaker Change: I am proud of our team's dedication and a shared commitment.
Speaker Change: The first question is from the line of Richie Deloria with RBC. Your line is now open.
Speaker Change: Through operational excellence.
Speaker Change: Which positions us for sustained revenue growth and value creation for our clients employees and shareholders alike, but the acquisition of infusion.
Richie Deloria: Wonderful. Thanks, so much for taking my questions nice to see a continued solid execution I've got two first I wanted to start with just kind of the upcoming infusion deal I understand obviously, you're limited in what you can do but sandeep and Jim as you've been talking to your existing customers and including these.
Speaker Change: We are bringing together two very strong companies.
Speaker Change: And we plan to build a truly transformative platform for the investment management industry.
Richie Deloria: Impressive new logos that you been landing what is been early feedback from those customers around the potential to have the two of you together the potential to bring some of the front office solutions and retool them and integrate them any color you can share there would be helpful. And then I've got a quick follow up.
Speaker Change: We look forward to building on this momentum and delivering on our plans in the quarters and years to come.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Right.
Richie Deloria: Yeah.
Richie Deloria: Yes, Thank you Rishi.
Speaker Change: We'll now begin the Q&A session.
Richie Deloria: So the first thing is that.
Speaker Change: If you'd like to ask a question. Please dial star one on your telephone keypad. If for any reason you need to remove your question you can dial star two.
Richie Deloria: People are generally very excited about what we have done.
Richie Deloria: So what are they excited about you know we have talked about 1% to four bps for a long time and our ability to bring our market leaders such as infusion into the play is I think very exciting for our clients.
Speaker Change: Again to ask a question dial star one.
A reminder, if you are using a speakerphone on today's call. Please remember to pick up your handset before asking your question.
Richie Deloria: So we feel that it does accelerate a 1% to four <unk> journey is.
Speaker Change: The first question is from the line of Richie Deloria with RBC. Your line is now open.
Richie Deloria: Not super easy, though we obviously have integration work to do but the point here is that from a customer point of view to get both pre trade and post trade from the same window.
Richie Deloria: Wonderful. Thanks, so much for taking my questions nice to see a continued solid execution I've got two.
Speaker Change: First I wanted to start with just kind of the upcoming infusion deal I understand obviously, you're limited in what you can do but sandeep and Jim as you've been talking to your existing customers and including these impressive new logos than you've been landing what is been early feedback from those customers around the potential to have the two of you to.
Richie Deloria: It is just very very interesting and exciting.
Richie Deloria: Got it thanks, that's really helpful.
Richie Deloria: And then maybe I just wanted to think about margins here.
Richie Deloria: You're showing continued nice margin expansion I know you've talked in the past about leveraging AI to drive greater efficiency and margin expansion, maybe two pieces to this number one as we think about the glide path towards our long term margins and we can leave infusion IV discussion for right now, but you should think about that.
Speaker Change: Either the potential to bring some of the front office solutions and retool them and integrate them any color you could share there would be helpful. And then I've got a quick follow up.
Speaker Change: Yes, Thank you Rishi.
Speaker Change: So the first thing is that.
Speaker Change: People are generally very excited about what we have done.
Speaker Change: How do you think about maybe the potential headwinds that you may get from Gen. AI over time as you incorporate more of the technology and product ties it.
Speaker Change: So what are they excited about we have talked about 1% to four bps for a long time and our ability to bring our market leaders such as infusion into the play is I think very exciting for clients.
In the set of solutions, especially just given how resource intensive the technology is and maybe related to that and if you made a comment in your prepared remarks about how sometimes you find projects that you deemphasize because they are not demonstrating ROI can you give an example, maybe what has been one of those projects historically.
Speaker Change: So we feel that it does accelerate a 1% to four bit journey.
Speaker Change: That's super easy, though we obviously have integration work to do but the point here is that from a customer point of view to get both pre trade and post trade from the same window.
Speaker Change: How you come to make that decision. Thank you.
Speaker Change: It is just very very interesting and exciting.
Speaker Change: Yes. Thank you look Q4 margin was 78, 8% right. So that is.
Speaker Change: Obviously very close to <unk> 79.
Speaker Change: Got it thanks, that's really helpful.
Speaker Change: Long term target was.
Speaker Change: And then maybe I just wanted to think about margins here.
Speaker Change: 80%.
Speaker Change: And so we feel we don't find it very challenging to to tell you that it's going to be north of 80% now is it going to be much higher I think that is something time will tell but I do think that the comment of our journey II.
Speaker Change: You're showing continued nice margin expansion I know you've talked in the past about leveraging AI to drive greater efficiency and margin expansion, maybe two pieces to this number one as we think about the glide path towards our long term margins and you know we can leave and seasonality discussion for right now, but you should think about that.
Speaker Change: We feel it pays back very very quickly often within the year.
Speaker Change: So when it comes to margin expansion, we don't think theres any headwind at all.
Speaker Change: How do you think about maybe the potential headwinds that you may get from Jenny I overtime as you incorporate more of the technology and product is there.
Speaker Change: In terms of journey is sort of a.
Lowering the margin profile of the company. So that's how we think about no way did we get.
Speaker Change: In the set of solutions, especially just given how resource intensive the technology is and maybe related to that and if you made a comment in your prepared remarks about how sometimes you find projects that you deemphasize because they are not demonstrating ROI can you give an example, maybe what has been one of those projects historically.
Speaker Change: Improvement because of these initiatives and these R&D investments are.
Speaker Change: Everything that was adjacent Rishi worked well and.
Speaker Change: And everything which was sort of two steps removed.
Speaker Change: Did not do well.
Speaker Change: And so at a broad level, that's how we.
Speaker Change: And how you come to make that decision. Thank you.
Speaker Change: Sort of allocated resources in 2025.
Speaker Change: Yeah. Thank you look Q4 margin was 78, 8% right. So that is.
Speaker Change: I want to make one final point is.
Speaker Change: The R&D investments, we make in dollar terms continues to grow.
Speaker Change: Obviously very close to <unk> 79.
Speaker Change: Long term target was.
Speaker Change: But honestly, we had approximately 60% of those investments focused on roadmap and new product.
Speaker Change: 80%.
Speaker Change: And so we feel we don't find it very challenging to to tell you that it's going to be north of 80% now is it going to be much higher I think that is something time will tell but I do think that the comment of our journey.
Speaker Change: Fault current clients all clients here just one so I do feel we have lots of room to invest in innovation.
Speaker Change: We feel it pays back very very quickly often within the year.
Speaker Change: As long as that is driving growth, we are happy more than happy to continue to make them. So I do feel our investments are well timed but this comment about.
Speaker Change: So when it comes to margin expansion, we don't think there is any headwind at all.
Speaker Change: In terms of Jenny I sort of.
Speaker Change: Unfunded things that don't work. We are also very very stringent about that if some program runs for six to nine months.
Speaker Change: Lowering the margin profile of the company. So that's how we think about where did we get.
Speaker Change: The improvement because of these initiatives and these R&D investments.
And doesn't get customer traction that's it.
Speaker Change: We're going to cut it and so we feel that we have a good path right now.
Speaker Change: Everything that was adjacent Rishi worked well.
Speaker Change: And everything which was sort of two steps removed did not do well.
Speaker Change: Good balance if you will between investments and returns from a shareholder point of view, but also from a client point of view.
Speaker Change: And so at a broad level, that's how we.
Speaker Change: Yeah.
Speaker Change: Sort of allocated resources in 2025.
Speaker Change: Thank you.
Speaker Change: The next question is from Brian Schwartz with Oppenheimer. Your line is now open.
Speaker Change: I want to make one final point is.
Speaker Change: The R&D investments, we make in dollar terms continues to grow.
Brian Schwartz: Yeah, Hi, Thanks for taking my questions. This afternoon and congratulations on a real strong finished to the year Sandy.
Speaker Change: But last year, we had approximately 60% of those investments focused on roadmap and new product.
Speaker Change: Sandy if I wanted to ask you about the <unk>.
The rags.
Speaker Change: Fault current clients all clients here just one so I do feel we have lots of room to invest in innovation.
Speaker Change: The effectiveness and that core insurance market I'm, just wondering if that mandate is still going to be a tailwind for replacement activity or other aspects of the business in 2025 or did that demand booth, mostly play out.
Speaker Change: As long as that is driving growth yeah happy more than happy to continue to make them. So I do feel our investments are well timed, but this comment about <unk>.
Speaker Change: In 2024.
Speaker Change: And funding things that don't work. We are also very very stringent about that if some program runs for six to nine months.
Speaker Change: Yes, Thank you Brian.
Speaker Change: Regulatory reporting has always been a bit of a tailwind for us as has compliance as has additional assets being brought in because of acquisitions. So we do think of regulatory reporting is a big tailwind and we continue to make investments in that space I think what Jim was referring to was you.
Speaker Change: And doesn't get customer traction that's it.
Speaker Change: And so we feel that we have a good path right now.
Speaker Change: Balance if you will between investments and returns.
Speaker Change: From a shareholder point of view, but also from a client point of view.
Speaker Change: Usually this is pretty broad base every country is doing something every region is doing something.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: The next question is from Brian Schwartz with Oppenheimer. Your line is now open.
Speaker Change: NTIC made a massive change this year and so that was that felt a little bit one time ish and Thats why I think Jim called out that there was $3 million of revenue, which we've talked would come in in Q1 actually came in Q4 and so we felt it was.
Yeah, Hi, Thanks for taking my questions. This afternoon and congratulations on a real strong finish to the year.
Speaker Change: Sandeep I wanted to ask you about the NII.
Speaker Change: Rags kind of deal.
Speaker Change: Different enough that we wanted to call it out but do we expect to continue to see regulatory changes all through 'twenty five 'twenty six.
Speaker Change: Fact of notes in that core insurance market I'm, just wondering if that mandate is still going to be a tailwind for replacement activity or other aspects of the business in 2025 or did that demand boost mostly play out in.
Speaker Change: Heck yeah absolutely.
Speaker Change: It doesn't mean it will be more regulations in every country, but.
Speaker Change: Changes are literally done all the time I don't know, Jeff the only thing I would add Brian is that this tailwind I think it persists right and here's why it persists.
Speaker Change: In 2024.
Speaker Change: Yes, Thank you Brian.
Speaker Change: Regulatory reporting has always been a bit of a tailwind for us as has compliance as has additional assets being brought in because of acquisitions. So we do think of regulatory reporting is a big tailwind and we continue to make investments in that space I think what Jim was referring to was huge.
Speaker Change: With newer face if you were at Clearwater client and you were faced with this significant and AIC change.
Speaker Change: We solved it for you.
Speaker Change: If you werent to Clearwater client.
Speaker Change: Yeah.
Speaker Change: You probably had to do a bunch of it I'm.
Speaker Change: Actually this is pretty broad based every country is doing something every region is doing something.
Speaker Change: Im not exactly sure what you had to do but I'm reasonably certain it was gymnastics and they may still be doing it and so I think when you think about being on a modern platform.
Speaker Change: NTIC made a massive change this year.
Speaker Change: So that was that felt a little bit one time ish and Thats why I think Jim called out that there was $3 million of revenue, which we've talked would come in in Q1 actually came in Q4 and so we felt it was different enough.
Speaker Change: A single instance, multi tenant solution, where you can make these changes across.
Speaker Change: The entire ecosystem of your clients.
Speaker Change: The benefits of that.
Speaker Change: Our meaningful of course people may switch in order to solve that problem.
Speaker Change: We wanted to call it out but do we expect to continue to see regulatory changes all through 'twenty five 'twenty six.
Sandeep Side: But I think as Sandeep mentioned Theres always the next problem.
Speaker Change: Heck yeah absolutely.
Sandeep Side: And so understanding the pain of that and then realizing that you don't have to feel that pain.
Speaker Change: It doesn't mean, there will be more regulations in every country, but.
Speaker Change: Changes are literally done all the time I don't know Jim.
Brian Schwartz: It's at Clearwater client, we think will continue to be a tailwind into the foreseeable future, yes, Brian I would just add that if you talked with Clearwater clients and you also talked with other mid size insurers.
Speaker Change: The only thing I'd add Brian is this tailwind I think it persists strike and here's why it persists.
Speaker Change: When your face if you were at Clearwater client and you were faced with this significant and AIC change.
Brian Schwartz: I think the clear what a client would tell you yes.
Speaker Change: We solved it for you.
Brian Schwartz: The change was a non event it just got done while the other will not pure clients will definitely tell you that Oh my Lord there's so much work to be done and I would tell you today. Many many of them have still not completed.
Speaker Change: If you werent to Clearwater client.
Speaker Change: You probably had to do a bunch of it I'm.
Speaker Change: I'm not exactly sure what you had to do but I am reasonably certain it was gymnastics and they may still be doing it and so I think when you think about being on a modern platform.
AIC work at all so I do feel that ways over time to say, if you're working with the client and you continue to see regulatory changes around the world.
Speaker Change: A single instance, multi tenant solution, where you can make these changes across the.
Speaker Change: The entire ecosystem of your clients.
Brian Schwartz: It just is a better platform for handling those things.
Speaker Change: The benefits of that.
Switching gears for my follow up question, just one on infusion sandeep.
Speaker Change: Our meaningful of course people may switch in order to solve that problem.
Speaker Change: But I think as Sandeep mentioned Theres always the next problem.
Speaker Change: Faster you think you can get going I'm working to achieve the synergies of the deal rationale or the reason I ask is there something about the similarities of your two businesses or maybe the familiarity as competitors that could speed up the synergies achievement when the deal closes.
Speaker Change: And so understanding the pain of that and then realizing that you don't have to feel that pain.
Speaker Change: Asset Clearwater client, we think will continue to be a tailwind into the foreseeable future, yes, Brian I would just add that if you talked with Clearwater clients and you also talked with other mid size insurers.
Brian Schwartz: Thanks for taking my questions.
Brian Schwartz: Yes, Brian.
Brian Schwartz: I don't know, whether I should say this but starting off.
Speaker Change: I think the Florida client would tell you yes.
Brian Schwartz: Acquisitions always look really good on excel spreadsheets, it's nice and easy, but I do want to say that we have had really detailed meetings.
Speaker Change: IC change was a non event it just got done while the other will not clear what our clients would definitely tell you that Oh my Lord there's so much work to be done and I would tell you today. Many many of them have still not completed the AIC work at all so I do feel that ways over time to say.
Brian Schwartz: With the infusion leadership.
Brian Schwartz: And I'll tell you the knowledge the quality of the platform is very very impressive.
Brian Schwartz: I do think that the integration.
Speaker Change: If you work with a client and you continue to see regulatory changes around the world.
Brian Schwartz: As hopefully easier because we have both cloud native single instance, multi tenant platforms.
Speaker Change: It just is a better platform for handling those things.
Brian Schwartz: The technologies, we use is very very similar so we feel very confident that we can get things done done relatively quickly I.
Speaker Change: Switching gears for my follow up question.
Speaker Change: Just one on infusion sandeep.
Speaker Change: Faster you think you can get going on working to achieve the synergies of the deal rationale or the reason I ask is there something about the similarities of your two businesses or maybe the familiarity as competitors that could speed up the synergies achievement.
Brian Schwartz: I do think we have provided guidance around our growth expectations and around margin expansion.
Brian Schwartz: And everything we have seen till now just allows us to say that we absolutely believe that those are completely doable.
Brian Schwartz: Average it whether you would add another concept yes.
Speaker Change: When the deal closes thanks for taking my questions.
Brian Schwartz: Yes, Brian.
Brian Schwartz: I don't know, whether I should say this but starting off.
Brian Schwartz: Thank you.
Speaker Change: Acquisitions always look really good on excel spreadsheets, it's nice and easy, but I do want to say that we have had really detailed meetings.
Speaker Change: The next question is from Kevin Mcveigh with UBS. Your line is now open.
Speaker Change: Great. Thanks, so much and I'll add my congratulations as well.
Brian Schwartz: With the infusion leadership.
Speaker Change: Jim I think you talked about kind of the EIC was about $3 million.
Brian Schwartz: I'll tell you the knowledge the quality of the platform is very very impressive.
Speaker Change: I think exceeded at least the street by 7 million is that.
Brian Schwartz: I do think that the integration.
Speaker Change: That incremental for anything to call out there that that drove the incremental $4 million revenue.
Brian Schwartz: As hopefully easier because we have both cloud native single instance, multi tenant platforms.
Speaker Change: Yes.
Speaker Change: Yeah, I think we had we had a nice bookings quarter in the in the fourth quarter and I think we've been very pleased with how our bookings are converting into revenue.
Brian Schwartz: The technologies, we use is very very similar so we feel very confident that you can get things done done relatively quickly I.
Speaker Change: And we focused on that for a long period of time to.
Brian Schwartz: I do think we have provided guidance around our growth expectations and around margin expansion.
Speaker Change: To try and get that faster and faster we started to see that growth. We also obviously the NR <unk> is obviously helpful and better then.
Brian Schwartz: And everything we have seen till now just allows us to say that we absolutely believe that those are completely doable.
Speaker Change: If you recall just last quarter it's.
Speaker Change: Hi, Roger whether you would add.
Speaker Change: Couple of points better than that and so going into the quarter, we wouldnt necessarily expect that to improve but we were hopeful and pleasantly surprised by that as well.
Roger: Thank you.
Speaker Change: The next question is from Kevin Mcveigh with UBS. Your line is now open.
Speaker Change: I think it was a very solid b.
Speaker Change: Under any circumstance.
Speaker Change: Yeah, Kevin I would add that obviously, Joe and I went to the board in reported results for Q4.
Kevin Mcveigh: Great. Thanks, so much and I'll add my congratulations as well.
Speaker Change: Jim I think you talked about kind of the AIC was about $3 million.
Speaker Change: And if you really think about it obviously, but thinking about one 2014, we got 116 that gives you 2% and that's real money.
Speaker Change: I think exceeded at least the street by $7 million is there incremental for anything to call out there that drove the incremental $4 million revenue.
Speaker Change: And the conversion from booking was very strong I think the Onboarding was very strong so literally every element of the business outperformed what our expectation was so bright.
Speaker Change: Yeah.
Speaker Change: Yeah, I think we had we had a nice bookings quarter in the in the fourth quarter and I think we've been very pleased with how our bookings are converting into revenue.
Speaker Change: By thrilled with what we were able to deliver in Q4.
Speaker Change: Which is a fantastic outcome and then.
Speaker Change: And we focused on that for a long period of time.
Speaker Change: Sandeep I know you talked about the $1 16, a year early nobody think about what drove that relative to your expectations.
Speaker Change: To try and get that faster and faster we started to see that growth. We also obviously the NR <unk> 16 is obviously helpful and better then.
Speaker Change: Turning to the upside and any thoughts.
Speaker Change: If you recall just last quarter it's.
Speaker Change: Yeah, I think that the main driver that was.
Speaker Change: A couple of points better than that and so going into the quarter, we wouldnt necessarily expect that to improve but we were hopeful and pleasantly surprised by that as well.
Speaker Change: Obviously, we have teams that are prosecuting against this but was was a very pleasant piece was and I mentioned it in the results is the upsell of the Clearwater platform across to other divisions, and the and helping our clients grow with 7% that.
Speaker Change: Yes.
It was a very solid b.
Speaker Change: Under any circumstance.
Yeah, Kevin I would add that obviously, Joe and I went to the board in reported results for Q4.
Speaker Change: That would be.
Speaker Change: Helpful and frankly are higher than what we would probably put in our base algorithm for that.
Speaker Change: And if you really think about it obviously, but thinking about 114, we got 116 that gives you 2% and that's real money.
Speaker Change: We see and some of that like obviously, that's really hard work, but you're also a little.
Speaker Change: And the conversion.
Speaker Change: Booking was very strong I think the Onboarding was very strong so literally every element of the business outperformed what our expectation was so by thrilled with what we were able to deliver in Q4.
Speaker Change: Reliance upon your clients to win that business to grow to do those acquisitions and those activities that they do.
Speaker Change: The other piece that I'm proud of.
Speaker Change: Brian is is that 3% of cross sell right. So that's kind of we talked about the go initiatives in all of these different initiatives and we're seeing that back into into our base I think the thing to remember about these new products is we're also selling them.
Speaker Change: Which is a fantastic outcome and then.
Speaker Change: Sandeep I know you talked about the $1 16, a year early when you think about what drove that relative to your expectations.
Speaker Change: Within our new logos as well and so so don't underestimate the power of these additional products flowing through I don't have the number in front of me, but I think it was.
Speaker Change: From here, the upside and any thoughts.
Speaker Change: Yeah, I think the main driver that was.
Obviously, we have teams that are prosecuting against this but was was a very pleasant piece was and I mentioned it in the results is the upsell of the Clearwater platform across to other divisions, and the and helping our clients grow with 7%.
Speaker Change: 28% or something like that of bookings.
For the year was in these additional products, which is meaningful when you think about growing 20% that's a meaningful growth driver for that so those those were the pieces that worked well I'd also say that I'm very proud of the team that executes price increases we have normalized price increases across the entire portfolio.
That would be.
Speaker Change: Helpful and frankly are higher than what we would probably put in our base algorithm for that.
Speaker Change: We see and some of that like obviously, that's really hard work, but you are also a little <unk>.
Speaker Change: We havent asked for more from clients or asking for it from all of our clients consistently and we're doing it in an automated and regular way and so that is feels very sustainable.
Speaker Change: Reliance upon your clients to win that business to grow to do those acquisitions in those activities that they do.
Speaker Change: The other piece that I am proud of.
Speaker Change: Brian is is that 3% of cross sell right. So that's kind of we talked about the go initiatives in all of these different initiatives and we're seeing that back into into our base I think.
Speaker Change: Yeah.
Speaker Change: Thank you.
The next question is from Michael Infante with Morgan Stanley. Your line is now open.
Thing to remember about these new products is we're also selling that.
Michael Infante: Hi, guys. Thanks for taking my question, Matt as well.
Speaker Change: Within our new logos as well and so so don't underestimate the power of these additional products flowing through I don't have the number in front of me, but I think it was.
Speaker Change: I just wanted to ask on that.
unknown: Jimmy Obviously, you gave some color on cross selling price, but at a higher level.
unknown: Earlier, you just in terms of tapping cross sell and levering price across the base. It seems like the third quarter was really the first quarter, where it started to have a noticeable impact on the P&L and we clearly had some nice flow through in the fourth quarter. So just any high level thoughts there would be helpful. And then I have a quick follow up.
Speaker Change: 28% or something like that of bookings.
Speaker Change: For the year was in these additional products, which is meaningful when you think about growing 20%. That's a meaningful growth driver for that so those are those were the pieces that worked well I'd also say that I'm very proud of the team that executes price increases we have normalized price increases across the entire portfolio.
unknown: Yeah, I think that you know.
unknown: When I think of the sustainability of NR $1 15, I think we'd like to see that cross sell the higher than 3%, we'd love for upsell to be 7% and cross sell to be 7% then everything is easy.
Speaker Change: We havent asked for more from clients or asking for it from all of our clients consistently and we're doing it in an automated and regular way and so that is feels very sustainable.
unknown: At that point.
unknown: But I do think it.
unknown: The teams have become energized around it they understand.
Speaker Change: Okay.
unknown: The value of it and and <unk>.
Speaker Change: Thank you.
Speaker Change: The next question is from Michael <unk> with Morgan Stanley. Your line is now open.
unknown: And obviously seeing the benefits of it so I think.
Speaker Change: Yes.
unknown: We're pretty pretty optimistic about our ability to execute against.
Speaker Change: Hi, guys. Thanks for taking my question, Matt as well.
unknown: Against those plans going forward.
Speaker Change: I just wanted to ask on that.
Jim: As Jim laid out look.
Jimmy: Jimmy Obviously, you gave some color on cross selling price, but at a higher level.
Jim: It is what does it depend on depends on good retention start from there and then Jim laid out additional assets new products price and some of your AUM growth.
Jimmy: Earlier, you just in terms of tapping cross sell and levering price across the base. It seems like the third quarter was really the first quarter, where it started to have a noticeable impact on the P&L and we clearly had some nice product around the fourth quarter. So just any high level thoughts there would be helpful. And then I have a quick follow up.
Jim: And our job I think is to make sure all of them.
Jim: Ken can operate at full potential while we don't expect all of them to work every quarter and if all of them work that'd be great. We get to a really high number but the point here is we werent trying to deliver 115 on a consistent and durable way and with most happy to see additional assets at seven 8% in new products that are similar.
Jimmy: Yeah, I think that you know.
Jimmy: When I think of the sustainability of NR $1 15, I think wed like to see that cross sell the higher than 3%, we'd love for upsell to be 7% and cross sell to be 7% then everything is easy.
Jim: Number and.
Jim: That's what we hope to get I did want to just sort of add one more point.
Jim: We really part.
Jimmy: At that point.
Jimmy: But I do think it.
Jim: New products would mostly go towards an IRR.
Jimmy: The teams have become energized around that date.
Jim: We have found is.
Understand.
Jim: A lot of it was used to drive new logos and Thats just not what we had expected we had toward new products would first go to current clients and then new clients would sort of incorporate them in there and what they were buying but we are really seeing a pretty strong.
Jimmy: The value of it and.
And.
Jimmy: And obviously seeing the benefits of it so I think.
Jimmy: We're pretty pretty optimistic about our ability to execute against.
Jimmy: Against those plans going forward.
Jim: Uptick from their business on from new clients.
Jim: As Jim laid out look.
Jim: It is what does it depend on depends on good retention start from there and then Jim laid out additional assets new products price and some of your AUM growth.
Brian Schwartz: Very helpful. Sandeep, just another quick follow up on infusion will be good to get your preliminary thoughts on how youre thinking about the pricing model, there and how it may evolve.
Jim: And our job I think is to make sure all of them.
Jim: Ken can operate at full potential while we don't expect all of them to work every quarter and if all of them work that'd be great. We get to a really high number but the point here is we werent trying to deliver 115 on a consistent and durable way and with most happy to see additional assets at seven 8% and new products are similar.
Jim: If I think about the hedge fund industry broadly.
Jim: In general price on seats, and we've seen what our incremental expansion in head count in the industry over the last couple of years, but I'm curious if you sort of think.
Jim: Think about some of the early work that you've done and the ACB differential of infusion versus some of the incumbents in the space, whether or not that affords you the opportunity to begin to explore a pricing on assets for <unk> without any meaningful uptick in churn. Thanks guys.
Jim: Number.
Jim: Thats, what we hope to get I did want to just sort of add one more point.
Speaker Change: We really talk.
Speaker Change: New products would mostly go towards MRO.
So what we have found is.
A lot of it was used to drive new logos and Thats just not what we had expected we had toward new products would first go to current clients and then new clients would sort of incorporate them in there and what they were buying but we are really seeing a pretty strong.
Jim: Yes. Thank you that's that's a really good question.
Jim: I think I'll, just start by saying that infusion delivers an absolutely industry, leading platform for the hedge fund industry. It absolutely does that number two is the client servicing and the operations team have really improved I think over the next over the last seven eight quarters.
Speaker Change: Uptick from their business on from new clients.
Jim: And is very close to being world class. So I think those two things are just happened to be true.
Speaker Change: Very helpful. Sandeep, just another quick follow up on fusion will be good to get your preliminary thoughts on how you're thinking about the pricing model, there and how it may evolve.
Jim: I do think the commercial model.
Jim: Could you give us a lot of help.
Jim: I do think that if we look at Clearwater, we executed on that.
Speaker Change: If I think about the hedge fund industry Broadway and general price on seats, and we've seen what our incremental expansion in head count in the industry over the last couple of years, but I'm curious if you.
Jim: Very swiftly and very.
Jim: I think in a very responsible way in 2022.
Jim: And so in all of our discussions with the infusion leadership, we have discussed how we might think about the commercial model, but I do think it needs to evolve.
Speaker Change: Think about some of the early work that you've done and the ACB differential of infusion versus some of the incumbents in the space, whether or not that affords you the opportunity to begin to explore pricing of assets for sale without any meaningful uptick in churn. Thanks, Yes, yes. Thank you that's that's a really good quest.
Jim: Obviously, we want to evolve it in a responsible way in a thoughtful way such that clients see the value of it but I do think that the current model.
Jim: Just has room to to drive an IRR.
Speaker Change: <unk>.
Speaker Change: I think I'll, just start by saying that infusion delivers an absolutely industry, leading platform for the hedge fund industry. It absolutely does that.
Jim: And driving <unk>.
Jim: Within the infusion client base is sort of a really important objective we have and so today I Couldnt tell you what exactly we might do at the commercial model, but it will be done obviously in partnership with infusion leadership, but we do have lots of ideas. We have worked on and frankly <unk>.
Speaker Change: Number two is the client servicing and the operations team have really improved I think over the next over the last seven eight quarters and is very close to being world class. So I think those two things are just happened to be true.
Jim: As testimony that it works.
Speaker Change: I do think the commercial model.
Jim: And it works in a sustainable way so we expect to expect to discuss it and execute on it in the coming quarters.
Could you give us a lot of help.
Speaker Change: I do think that if you look at Clearwater, we executed on that.
Speaker Change: Very swiftly and very.
Jim: Thank you.
Speaker Change: I think in a very responsible way in 2022.
Speaker Change: Next question is from Alexia <unk> with Jpmorgan. Your line is now open.
Speaker Change: So in all of our discussions with the infusion leadership, we have discussed how we might think about the commercial model, but I do think it needs to evolve.
Jim: Yeah.
Speaker Change: Hello, everyone.
Speaker Change: My congratulations with Great results and then Jim I was wondering if.
Speaker Change: Obviously, we want to evolve it in a responsible way in a thoughtful way such that clients see the value of it but I do think that the current model.
Speaker Change: You have any.
Speaker Change: For us in terms of FX headwinds that you're incorporating into your 2025 guidance.
Speaker Change: Just has room to to drive an IRR and driving <unk>.
Speaker Change: What would your growth outlook be in constant currency basis, both on revenue and EBITDA.
Speaker Change: Within the infusion client base is sort of a really important objective we have and so today I Couldnt tell you what exactly we might do at the commercial model, but it will be done obviously in partnership with the infusion leadership, but we do have lots of ideas we have.
Speaker Change: Thanks Alexie so.
Speaker Change: Although 18% 19% of our revenues are international the vast majority of.
Speaker Change: Those revenues are in U S. Dollar currency there are some in euros and some in pounds. How we think about it Alexia is looking at the currencies as well as the costs that we aligned to those and so.
Speaker Change: Both Don and frankly.
Speaker Change: <unk> 16 is testimony that.
Speaker Change: Works.
Speaker Change: And it works in a sustainable way so we expect to.
Speaker Change: We expect to discuss it and execute on it in the coming quarters.
Speaker Change: We create kind of a natural hedge between the revenues of clients in that currency and the expenses within those countries. So it's de Minimis on.
Thank you.
Speaker Change: The next question is from Alexia <unk> with Jpmorgan. Your line is now open.
Speaker Change: As it relates to EBITDA okay.
Speaker Change: Okay.
Speaker Change: Hello, everyone.
Speaker Change: Then in addition, I think it's we are not impacted so much by FX on a revenue basis.
Speaker Change: My congratulations with Great results and then Jim I was wondering if.
Speaker Change: You have any.
Speaker Change: As we think about it because we billed monthly.
Speaker Change: For us in terms of FX headwinds that you're incorporating into your 2025 guidance.
Speaker Change: And so therefore, I think our views on that.
Speaker Change: We will change, but obviously it is a slight headwind as we as we sit here today, but we would hope that rates would would revert more to me.
Speaker Change: What would your growth outlook be in constant currency basis.
Speaker Change: Both on revenue and EBITDA.
Speaker Change: Yeah.
Speaker Change: Thanks, Alexia so.
Speaker Change: Throughout the year, and so that would ameliorate over the over the year.
Speaker Change: Although 18% 19% of our revenues are international the vast majority of.
Speaker Change: Just wanted to add that we are now have a stigma.
Speaker Change: Significant number of employees in India.
Speaker Change: Those revenues are in U S. Dollar currency there are some in euros in southern power, how we think about it Alexia is looking at the currencies as well as the costs that we aligned to those and so.
Speaker Change: And.
Speaker Change: As you might know even infusion has a significant workforce.
Speaker Change: Presence in India.
Speaker Change: Is it currency does strengthen as it has I think that will that will obviously help the cost base because we don't have revenue of India in the matching format and with Jim just spoke about and that.
Speaker Change: We create kind of a natural hedge between the revenues of clients in that currency and the expenses within those currencies. So it's de Minimis on.
Speaker Change: Matching format works for Europe, and other locations, but.
Speaker Change: Given the significant presence of India, I do expect it to be a magnitude but.
Speaker Change: As it relates to EBITDA okay.
Speaker Change: Then in addition, I think it's we are not impacted so much by FX on the revenue basis.
Speaker Change: Okay. Thank you Sandeep, Thank you Jim and Sandeep.
Speaker Change: For you.
Speaker Change: You listed a number of <unk>.
Speaker Change: As we think about it because we billed monthly.
Speaker Change: New clients in the quarter.
Speaker Change: And so therefore, I think our views on that.
Speaker Change: Maybe you can give us a few more use cases from what you do for those clients and we're.
Speaker Change: We will change, but obviously it is a slight headwind as we as we sit here today, but we would hope that rates would would revert more to me.
Speaker Change: Specifically interested in open AI that you included can you elaborate what exactly you do for them.
Speaker Change: Yeah. So.
Speaker Change: The thing about Alex is we don't do anything different for any of these clients. We do the same data ingestion for them.
Speaker Change: Throughout the year, and so that would ameliorate over the over the year.
Speaker Change: Just wanted to add that we are now have.
Speaker Change: Do the same data reconciliation, we do the accounting we do the reporting so I wish I could give you some nuggets about what is different.
Speaker Change: A significant number of employees in India.
Speaker Change: <unk>.
Speaker Change: As you might know even infusion has a significant workforce.
Speaker Change: <unk>.
Speaker Change: For open AI or any of these corporate clients, we do exactly the same thing for them now how they use it and what they use it for differs.
Speaker Change: Presence in India.
Speaker Change: Is it currency does strengthen as it has I think that will that will obviously help the cost base because we don't have revenue of India in the matching format and with Jim just spoke about.
Speaker Change: So for example, when you look at asset managers. They use it very heavily for third party client reporting.
Speaker Change: <unk> format works for Europe, and other locations, but.
Speaker Change: People in the insurance industry may use it very much for reporting and regulatory reporting and compliance.
Speaker Change: Given the significant presence presence in India, I do expect it to be a magnitude but.
Sandeep: Okay. Thank you Sandeep, Thank you chairman Sandeep.
Speaker Change: Corporates may do it for corporates.
Speaker Change: <unk> like <unk> use it for.
Up for you.
Speaker Change: Just consolidated reporting from multiple multiple managers.
Speaker Change: You listed a number of <unk>.
Sandeep: New clients in the quarter.
Sandeep: Maybe you can give us.
Speaker Change: But the work Clearwater does and the platform what it does for them is really not different at all.
Sandeep: A few more use cases, so what you do for those clients our specific interest.
Sandeep: Open AI that you included can you elaborate what exactly you do for them.
Speaker Change: So again narrow nuggets here now over time, and let's see we do build.
Sandeep: Yes.
Speaker Change: Visualization for other clients. So for example, if we go to the government sector do you see things a little bit differently. So we may build visualization for them about how they like to do reports how they like to think about returns and how they wanted.
Sandeep: The thing about Alexey as they don't do anything different for any of these clients. We do the same data ingestion for them. We don't do the same data reconciliation, we do the accounting we do the reporting so I wish I could give you some nuggets about what.
Speaker Change: On that so you may change that but even there nothing has changed in how we ingest data reconcile it account for it.
Sandeep: It is different for.
Sandeep: Open AI or any of these corporate clients, we do exactly the same thing for them now how they use it and what they use it or differs.
Speaker Change: If we go to other industries in Europe, and they may want to see some things that are different in the U S. They might want to see NTIC differently, but the platform is already doing all of those calculations. The question is what do clients.
Sandeep: So for example, when you look at asset managers. They use it very heavily for third party client reporting alright.
Sandeep: Alright.
Sandeep: People in the insurance industry may use it very much for reporting and regulatory reporting and compliance.
Speaker Change: Normally like to see so yeah, nothing different from any of the other listed corporate clients. We're doing four open open there.
Speaker Change: Corporates may do it for.
Sandeep: <unk> use it for.
Sandeep: Just consolidating reporting from multiple multiple managers.
Thank you.
Speaker Change: The next question is from Michael <unk> with Wells Fargo. Your line is now open.
Sandeep: The work Clearwater does and the platform what it does for them is really not different at all.
Speaker Change: Hey, great. Thanks, very much I appreciate you taking the questions.
Sandeep: So again narrow nuggets here now over time, let's see we do build.
Speaker Change: Sandeep I want to ask the infusion question from a high higher level and maybe just listen to articulate how you ensure you can continue to execute and keep momentum on the core business that we're seeing moving in a good direction. While also working to integrate a larger acquisition than you've historically done at the same time, one of the things that you kind of make.
Sandeep: Visualization for other clients. So for example, if we go to the government sector do you see things a little bit differently. So we may build visualization for them about how they like to do reports how they like to think about our returns and how they wanted one report.
Speaker Change: Sure in place. So you can continue to walk and chew gum throughout this.
Sandeep: On that so you may change that but even there nothing has changed in how we ingest data reconcile it account for it.
Speaker Change: Jeff. This is look I just wanted to say that this is obviously meaningfully bigger than anything we've ever done.
Sandeep: If we go to other industries in Europe, and they may want to see some things are different in the U S. Tim I want to see NTIC differently, but the platform is already doing all of those calculations. The question is what do clients.
Speaker Change: And so what do we expect on what do we think number one is.
Speaker Change: We only did this because we think.
Speaker Change: Our core business is working well.
Sandeep: Normally like to see so yeah, nothing different from any of the other listed corporate clients, we are doing for them and open them.
Speaker Change: And without that I think it would be far too risky a proposition. So what makes the difference is is our operations working well is the sales engine working well is the enabling functions working well is the technology and the platform working well and thats in the answer to those as very quickly, yes, yes, yes, and yes. So that is a found.
Sandeep: Thank you.
Michael <unk>: The next question is from Michael <unk> with Wells Fargo. Your line is now open.
Sandeep: Yeah.
Speaker Change: Hey, great. Thanks, very much I appreciate you taking the questions.
Nation for me.
Speaker Change: Sandeep I want to ask the infusion question from a high higher level and maybe just listen to articulate how you ensure you continue to execute and keep momentum on the core business that we're seeing moving in a good direction. While also working to integrate a larger acquisition than you've historically done at the same time one of the things that you are kind of may.
Speaker Change: And then you have to sort of think about is this strategically.
Speaker Change: A really compelling proposition and I've got to tell you that the.
Speaker Change: The more I learn about infusion what they've built.
Speaker Change: It was absolutely the right decision.
Clients do want a front to back solution and they just simply does not exist when you think about public and private assets.
Speaker Change: Sure in place. So you continue to walk and chew gum throughout this.
Speaker Change: Some exists for the private side or the public side pardon me on the front office and a lot of solutions for the back office again for either the privates or publics, but ability to bring those together I think is.
Speaker Change: Yes. This is look I just wanted to say that this is obviously meaningfully bigger than anything we've ever done.
Speaker Change: So what do we expect on what do we think number one is.
Speaker Change: We only did this because we think.
Strategically such a big deal for our industry. So I feel really good about the strategic intent here now the third thing is what are we going to do differently. One is.
Speaker Change: Our core business is working well.
Speaker Change: And without that I think it would be far too risky a proposition. So what makes the difference is is our operations working well as a sales engine working well is the enabling functions working well is the technology and the platform working well and thats in the answer to those as very quickly, yes, yes, yes, and yes. So that is a found.
Speaker Change: We've had really good meetings about.
Speaker Change: Joined teams going after work streams, we have a really strong PMO function, we have a function for each of these items. We have talked to you all about accelerating revenue growth cross selling improving margin and G&A operating margin each of them.
Speaker Change: Nation for me.
Speaker Change: And then you have to sort of think about is this strategically.
Speaker Change: A really compelling proposition and I've got to tell you that the.
Speaker Change: Work stream leaders with leaders from both sides, creating we one of the plants and we expect veto over the next several weeks and we three over the weeks after that so I do think we are approaching this as a very.
Speaker Change: The more I learn about infusion what they've built.
Speaker Change: It was absolutely the right decision.
Speaker Change: Clients do want a front to back solution and they just simply does not exist when you think about public and private assets.
Speaker Change: Important and giving it the right attention.
Speaker Change: Finally.
Speaker Change: It is important for us to continue to run their own business well. So what we have done is taken out people from the current business. So that the rest of them are focused entirely on the Clearwater platform for the next several months and quarters, while we take out several leaders and have them focus on working jointly.
Speaker Change: Some exists for the private side or the public side pardon me on the front office and a lot of solutions for the back office again for either the privates or publics, but ability to bring those together I think is.
Speaker Change: Strategically such a big deal for our industry. So I feel really good about the strategic intent here now the third thing is what are we going to do differently. One is <unk>.
Speaker Change: With infusion.
Speaker Change: And I would just sort of add that the infusion leadership and operations in the sales teams in the technology teams are all very impressive and so so we feel really good about their ability to drive growth. So it's a question of.
Speaker Change: We've had really good meetings about.
Speaker Change: Joined teams going after work streams, we have a really strong PMO function.
Speaker Change: Working together what can we do what can we build and that's where frankly the excitement excitement comes from.
Speaker Change: We have a function for each of these items, we have talked to you all about accelerating revenue growth cross selling improving margin and G&A operating margin each of them.
Speaker Change: Yeah.
Speaker Change: Great color, Jim just a quick quantify may could you just help frame what you're assuming in terms of the initial guide you're executing well growth stepped up in <unk>, you're guiding for 19% to 20 to start the year, maybe just frame what you're assuming in terms of expansion or some of the drivers that you're executing on.
Work stream leaders with leaders from both sides, creating we one of the plants and we expect veto over the next several weeks and we treat over the weeks after that so I do think we are approaching this as a very.
Speaker Change: Important.
Speaker Change: And giving it the right attention finally.
Relative to the base case for guidance. Thank you.
Speaker Change: It is important for us to continue to run their own business well. So what we have done is taken out people from the current business. So that the rest of them are focused entirely on the Clearwater platform for the next several months and quarters, while we take out several leaders and have them focus on working jointly.
Speaker Change: Okay.
Speaker Change: Yeah, I think we.
Speaker Change: Targeted NR 115 as of the end of the year and so we think about that.
Speaker Change: Yeah.
Speaker Change: Is something that is.
Speaker Change: <unk> is a north star element for Us I would say.
If you understand.
Speaker Change: With infusion.
Speaker Change: And I would just sort of add that the intrusion leadership and operations in the sales teams in the technology teams are all very impressive and so so we feel really good about their ability to drive growth. So it's a question of.
Speaker Change: Clearwater historically right we.
We like to make sure that we're highly confident in our guide and build throughout the year and so I think we.
Speaker Change: Hum.
Speaker Change: Anticipated growth metrics and the evolution.
Speaker Change: Working together what can we do what can be built and that's where frankly the excitement excitement comes from.
Speaker Change: The.
Speaker Change: New products that we're driving as well as the markets, where we exist there while giving ourselves room.
Speaker Change: Yeah.
Speaker Change: Great color, Jim just a quick one if I may could you just help frame what you're assuming in terms of the initial guide you're executing well growth stepped up in <unk> youre guiding for 19 to 20 to start the year, maybe just frame what you're assuming in terms of expansion or some of the drivers that you're executing on.
Vis vis <unk> <unk>, we have assumed no one a tailwind.
Speaker Change: Built into this guidance or.
Speaker Change: 2025.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Relative to the base case guidance. Thank you.
Speaker Change: The next question is from Andrew Schmidt with Citigroup. Your line is now open.
Speaker Change: Okay.
Speaker Change: Yeah, I think we.
Speaker Change: Yeah.
Speaker Change: Hey, Jim Thanks for taking my questions and congrats on the results here.
Speaker Change: Targeted NRI 115 as of the end of the year and so we think about that.
Speaker Change: Apologies I hopped on a little late sorry, if this has been asked but going back to Clearwater connect obviously big focus on CW IC.
Speaker Change: It.
Speaker Change: That's something that.
<unk> is a north star element for Us I would say if you understand.
Speaker Change: Curious to hear how the demand for that product has been trending since launch and how.
Speaker Change: Clearwater historically right we.
Speaker Change: We like to make sure that we're highly confident in our guide and build throughout the year and so I think we.
Speaker Change: How that plays into the sort of the cross sell opportunity in 25, maybe its little bit early but I'm just curious about the potential for that product. Thanks. So much.
Uh huh.
Speaker Change: <unk> growth metrics and the evolution of the.
Speaker Change: Thank you for the question look the biggest result, which you can sort of see is in the improvement of gross margin throughout this whole year and frankly, the last year the second half of last year.
Speaker Change: New products that we're driving as well as the markets, where we exist there while giving ourselves room.
Speaker Change: Vis vis <unk> <unk>, we have assumed no one a tailwind.
Speaker Change: Q4 gross margin was 78, 8%. So we feel like while we were able to get a lot of a lot of mileage from that investment.
Speaker Change: Built into this guidance or.
Speaker Change: 2025.
Speaker Change: Revenue side, which is what I think youre talking about is how.
Speaker Change: Okay.
Speaker Change: Huh.
Speaker Change: How much are customers paying for that so I would just say to you that we have.
Thank you.
Speaker Change: The next question is from Andrew Schmidt with Citigroup. Your line is now open.
Speaker Change: More than 10 clients, who are all using it but it's still early I don't want to give the impression that it is a major contributor of revenue growth. It is not do we expect that to be a major contributor of revenue growth in 2025, we don't do we expect it to be a major contributor 26 and 27, absolutely we do.
Speaker Change: Yeah.
Thanks, Sandeep Hi, Jim Thanks for taking my questions and congrats on the results here.
Speaker Change: Apologies I hopped on a little bit late sorry, if this has been asked but going back to Clearwater connect obviously big focus on CW IC.
Speaker Change: Curious to hear how the demand for that product has been trending since launch and how.
Speaker Change: But not from selling quick CW IC it is from.
Speaker Change: The marketplaces and the insights business, we want to build and drive. So I think quick is more of an enabler of businesses and of operational efficiency and of Onboarding, but quick by itself is the infrastructure piece and I think what Youll see is other parts of our business.
Speaker Change: How that plays into the sort of the cross sell opportunity in 25, maybe its little bit early but I'm just curious about the potential for that product. Thanks. So much.
Speaker Change: Thank you for the question look the biggest result, which you can see is in the improvement of gross margin throughout this whole year and frankly, the last year the second half of last year.
Speaker Change: Drive revenue growth using it.
Speaker Change: Q4 gross margin was 78, 8%, so we feel like well be able to get a lot of a lot of mileage from that investment.
Speaker Change: Got it. Thank you so much for that Sandeep, maybe I could I know there's been a lot of questions on infusion, but maybe I can ask one more and apologies nitty gritty.
Speaker Change: The revenue side.
Speaker Change: What I think youre talking about is how.
Speaker Change: Can you just talk about sort of end state data architecture.
Speaker Change: How much are customers paying for that so I would just say to you that we have.
Speaker Change: I know obviously the.
Speaker Change:
Speaker Change: More than 10 clients, who are all using it but it's still early I don't want to give the impression that it is a major contributor of revenue growth. It does not do we expect that to be a major contributor to revenue growth in 2025, we don't do we expect it to be a major contribute in 'twenty six 'twenty seven absolutely we do.
Speaker Change: One source of truth for data is important.
Speaker Change: The infusion engine has sort of a real time risk Decisioning, how do you see.
Speaker Change: What's the data strategy when all this comes together when we think about just.
Speaker Change: One source of truth or would there have to be sort of multiple systems running thanks. So much.
Speaker Change: But not from selling quick CW IC it is from.
Speaker Change: Yes look I think that's a really really good question. Thank you. Thank you for asking it.
Speaker Change: The marketplaces and the insights business, we want to bring them drive. So I think quick is more of an enabler of businesses and of operational efficiency and of Onboarding, but quick by itself is the infrastructure piece and I think what Youll see is other parts of our business.
Speaker Change: The way to think about this as phase one phase two phase III eventually though.
Speaker Change: Okay.
Speaker Change: Having a single data claim.
Speaker Change: Having a single data ingestion mechanism.
Speaker Change: A reconciliation mechanism, obviously makes the most sense.
Speaker Change: Should you try and think about a single security Master of course, it makes the most sense right.
Speaker Change: Drive revenue growth using it.
Speaker Change: Got it. Thank you so much for that Sandeep, and maybe I know theres been a lot of questions on infusion, but maybe I can ask one more and I apologize maybe greedy.
Speaker Change: If we can achieve that in some reasonable timeframe you would create a complete game changer in our industry.
Speaker Change: Because then the data and the pre trade systems would flow directly.
Speaker Change: Can you just talk about sort of end state data architecture.
Speaker Change: And without touch into the Middle back office systems. So that's where you want to go.
Speaker Change: I know obviously the.
Speaker Change:
Speaker Change: One source of truth for data is important.
Speaker Change: What we don't want to do though is just get locked into that goal.
Speaker Change: The infusion engine has sort of a real time decisioning, how do you see.
Speaker Change: What we wanted to do is think about what your current clients need.
Speaker Change: What's the data strategy when all this comes together when we think about just.
Speaker Change: And so those are asset owners.
Speaker Change: Who want front office applications, let's go cross sell to them and what does that need.
Speaker Change: One source of truth or would there have to be sort of multiple systems running thanks. So much.
Speaker Change: So that feels like phase one to me.
Speaker Change: Yeah look I think that's a really really good question. Thank you. Thank you for asking it.
Speaker Change: And then phase two might be integration on the data side and the security Masters side.
Speaker Change: The way to think about this is phase one phase two phase III eventually though.
Speaker Change: So I really like the question because that is the promise the promises we can have a single data layer.
Speaker Change: Okay.
Speaker Change: Having a single data plane.
Speaker Change: Having a single data ingestion mechanism and the data reconciliation mechanism, obviously makes the most sense.
Speaker Change: With absolutely free flowing data back and forth this concept of.
Speaker Change: Wipe Burlington wipe and then repopulate it makes no sense when we should have.
Speaker Change: Should you try and think about a single security Master of course, it makes the most sense right.
Speaker Change: One set of Golar truth, but those are that is a longer project and so we think we will do it in phases, but that's absolutely where we want to go.
Speaker Change: If we can achieve that in some reasonable timeframe you would create a complete game changer in our industry.
Speaker Change: Because then the data and the pre create systems would flow directly.
Speaker Change: Thank you.
Gabriela Borges: The next question is from Gabriela Borges with Goldman Sachs. Your line is now open.
Speaker Change: And without touch into the Middle back office systems. So that's where you want to go.
Gabriela Borges: Hey, good afternoon, Thanks for taking my question.
Speaker Change: What we don't want to do though is just get locked into that goal.
Gabriela Borges: I Wonder why the conversations on the planet right now.
Speaker Change: What we wanted to do is think about what your current clients need.
Gabriela Borges: Like if you think about macacos.
Speaker Change: And so those are.
Gabriela Borges: What extent current wireless in the more by the timing of parsing out I call them, how you position yourself to be in the best competitive position when the.
Speaker Change: Asset owners.
Who want front office applications, let's go cross sell to them and what does that need.
Speaker Change: So that feels like phase one to me.
Gabriela Borges: The album as contracts come up suddenly or whatnot.
Speaker Change: And then phase two might be integration on the data side and the security Masters side.
Gabriela Borges: But love to hear a Halloween time, now two and a half turn years ago last night.
Speaker Change: So I really like the question because that is the promise the promises we can have a single data layer.
Gabriela Borges: Control in your control that you.
Gabriela Borges: Control like on one of the things that helps thanks.
Speaker Change: With absolutely free flowing data back and forth this concept of.
Gabriela Borges: Thanks, so much.
Gabriela Borges: Gabriel Thank you for the question I think it's.
Speaker Change: <unk> wide and then repopulate it makes no sense when we should have.
Speaker Change: Really interesting to discuss the evolution of this and when you think about our business. We've always taught that what drives it is operational efficiency.
Speaker Change: One set of Golden truth, but those are that is a longer project.
Speaker Change: So we think we will do it in phases, but that's absolutely where we want to go.
Speaker Change: And then we said nothing about what drives it is regulatory reporting and the needs around it.
Speaker Change: And then we said no you should add compliance.
Thank you.
Speaker Change: The next question is from Gabriela Borges with Goldman Sachs. Your line is now open.
Speaker Change: And the need for compliance and then we said no you need to add risk for that so what we have tried to build over time.
Gabriela Borges: Hey, good afternoon, Thanks for taking my question.
Speaker Change: Is continuing reasons for clients to move to Clearwater.
Speaker Change: I Wonder if I have the conversation from the pilot right now.
Speaker Change: What are you trying to build.
Speaker Change: As we went into this 1% to four bps.
Speaker Change: Like if you think about macacos.
Speaker Change: Word.
Speaker Change: Got it.
Speaker Change: We sort of said what clients really want is pre trade.
Speaker Change: <unk>.
Speaker Change: By the time, you're parsing out I call them, how do you position yourself to be.
Speaker Change: Platforms, which can integrate seamlessly with mid office and back office applications and platforms like we have.
Speaker Change: Being the best competitive position.
Speaker Change: But adam as contracts come up.
Speaker Change: Would love to hear a Halloween now two and a half turn years ago last night.
So our ambition about a year and a half back changed.
Speaker Change: We said, we want to address the entire investment lifecycle.
Speaker Change: Control AUR controlling that like you.
Speaker Change: Control I call him one of the things that Charles Thanks, So much.
Speaker Change: And that was a big change now.
Speaker Change: Some companies and some clients will say if you can do all of it.
Speaker Change: Yes. Thank you for the question I think so.
Speaker Change: I don't want to sweat just too hard.
Speaker Change: It's really interesting to discuss the evolution of this.
Speaker Change: So they have now one more reason.
Speaker Change: When you think about our business, we've always taught that what drives it is operational efficiency.
Speaker Change: To move to the Clearwater infusion platform.
Speaker Change: And the same thing is true for infusion.
Is that they had many many clients who use them for the front office and they would say look if you don't do the accounting you don't do the regulatory reporting.
Speaker Change: And then we said what drives it is regulatory reporting and the needs around it and then we said no you should add compliance.
Speaker Change: It's not worth the squeeze.
Speaker Change: And the need for compliance and then we said no you need to add risk for that so what we have tried to build over time.
Speaker Change: And our position would be while now you have five more reasons to buy the infusion care, where the platform and so what we are trying to do is continue to show the market that we can build.
Speaker Change: Is continuing reasons for clients to move to Clearwater.
Speaker Change: What are you trying to build.
Speaker Change: As we went into this one to full word.
Speaker Change: The only end to end platform built on a single instance, multi tenant platform architecture, which has a single security master.
We sort of said what clients really want is pre trade.
Speaker Change: Platforms, we can integrate seamlessly with mid office and back office applications and platforms like we have.
Speaker Change: Now do we have that for every of the private asset class we don't.
Speaker Change: And so we continue to try and look at alternative assets private debt private credit and all of those areas to provide a very modular but.
So our ambition about a year and a half back changed and we said we want to address the entire investment lifecycle.
Speaker Change: And that was a big change now.
Speaker Change: Some companies and some clients will say if you can do all of it.
Speaker Change: Very deep insight into each of these asset classes, yes, that's what we're building with alternative asset. So I do think our ambition is to be.
Speaker Change: I don't want to sweat just too hard.
Speaker Change: So they have now one more reason.
Speaker Change: One unified platform.
Speaker Change: To move to the Clearwater infusion platform.
Speaker Change: For private and public assets, we does.
Speaker Change: And the same thing is true for infusion.
Speaker Change: Is that they had many many clients who use them for the front office and they would say look if you don't do the accounting you don't do the regulatory reporting.
Speaker Change: Risk for public and private assets and does.
Speaker Change: Front end.
Speaker Change: Pre trade work for those asset classes and those those personas and we think that we are on the way way to being able to achieve that.
Speaker Change: It's not worth the squeeze.
Speaker Change: And our position would be while now you have five more reasons to buy the infusion Cora platform and so what we are trying to do is continue to show the market that we can build.
Speaker Change: And the first big step we have taken I think is.
Speaker Change: Israeli infusion, which our team changes the game for us so that we're really excited about it because when you just think about what the market needs and you don't think about Clearwater, but.
Speaker Change: The only end to end platform built on a single instance, multi tenant.
Speaker Change: But the market needs does that.
Speaker Change: Architecture, which has a single security master.
Speaker Change: Platform, which addresses the needs across.
Speaker Change: Now do we have that for every of the private asset class we don't.
Speaker Change: And private assets understands the risk can do talk and exposure in all of those things, which any asset manager or CIO of an asset owner should want to see and we think we are on our way to achieve that.
Speaker Change: And so we will continue to try and look at alternative assets.
Speaker Change: That private credit and all of those areas to provide a very modular but.
Speaker Change: Wade deep insight into each of these asset classes, yes, that's what we are building with alternative asset. So I do think our ambition is to be.
Speaker Change: Thank you hesitate tab.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: The next question is from Faith Bruner with William Blair. Your line is now open.
Speaker Change: One unified platform for private and public assets, we does.
Yeah.
Speaker Change: Hey, guys. Congrats again on the quarter and thanks for taking the questions maybe first off high level.
Speaker Change: Risk for public and private assets and does.
Speaker Change: Front end.
Speaker Change: Talk about the different factors that are driving durability demand I know you talked about the ongoing regulation change in serving as a tailwind with some onetime pull forward in a corner, but I guess, what else is feeling demand and its supporting the growth and expansion at these levels.
Speaker Change: Pre trade work for those asset classes and those those personas and we think that we are on the way way to being able to achieve that.
Speaker Change: And the first big step we have taken I think as.
Speaker Change: Israeli infusion, which our team changes the game for us. So that we are very excited about it because when you just think about what the market needs and you don't think about Clearwater, what the market needs is that end to end platform, which addresses their needs across public <unk>.
Speaker Change: So maybe.
Speaker Change: Why don't I start with <unk>, So look I wish I had a really good answer for you, but what I'll tell you what the real answer the real answer is.
Speaker Change: We build many irons in the fire to drive growth.
Speaker Change: And private assets understands the risk can do shock and exposure in all of those things, which any asset manager or CIO of an asset owner should want to see and we think we are on our way to achieve that.
Speaker Change: We don't know what will work in a given quarter or given your somewhat we do have is multiple irons in the fire in one of those it starts number one with retention.
When you have a 99% or 98% retention that is a driver of growth and then you get to the areas Jim talked about which is additional assets do we have dedicated teams that are going from desktop desk and driving additional assets do we have new products. We are investing in to drive additional assets, but also to get.
Speaker Change: Thank you hesitate here.
Speaker Change: Yeah.
Speaker Change: Thank you the.
Speaker Change: The next question is from Faith Bruner with William Blair. Your line is now open.
Speaker Change: Yeah.
Faith Bruner: Hey, guys. Congrats again on the quarter and thanks for taking the questions maybe first off high level.
Speaker Change: New logos and then do you have a commercial model and the pricing model, which is really good.
Speaker Change: And do you have an AUM growth, which can be captured by the new commercial model and I just have to say that.
Faith Bruner: Talk about the different factors that are driving durability demand I know you talked about the ongoing regulation change in serving as a tailwind with some one time called for in the corner.
Speaker Change: Every year and every quarter, it's a little bit different.
Speaker Change: <unk>.
Speaker Change: If some of them show up in a given quarter, we can meet the needs of the quarter and that's what our agenda is is really many irons in the fire is what leads to durability. You may have a spike in a quarter or two that's that's hard to predict but if we want durable growth you've got you've got to have the multiple lines of I'm sorry, Jim.
Faith Bruner: Was this feeling demand and then supporting the growth and expansion at these levels.
Faith Bruner: So maybe.
Faith Bruner: Why don't I start with <unk> look I wish I had a really good answer for you, but I'll tell you what the real answer the real answer is.
Faith Bruner: We build many irons in the fire to drive growth.
Faith Bruner: We don't know what will work in a given quarter or given your so what we do have is multiple irons in the fire in one of those it starts number one with retention.
Speaker Change: You can say the same thing the only thing I would add to that is also geographically yep international.
Speaker Change: Across the World and we're also.
Faith Bruner: When you have a 99% over 98% retention that is a driver of growth and then you get to the areas Jim talked about which is additional assets do we have dedicated teams, which are going from desktop desk and driving additional assets do we have new products. We are investing in to drive additional assets, but also to get to.
Speaker Change: Executing against each of those geographic.
Speaker Change: Locations as well.
Yeah.
Speaker Change: Okay helpful. And then a quick one just to follow up sell.
Speaker Change: Talk about some of the newer products and how they've been driving some of that expansion we saw in the quarter.
Faith Bruner: New logos and then do you have a commercial model in our pricing model, which is really good.
Speaker Change: Prior commentary kind of highlighted insights as somewhat of a sleeping giant so any color there on the contribution of this product.
Faith Bruner: And do you have an AUM growth, which can be captured by the new commercial model and I just have to say that.
Speaker Change: Last couple of quarters, and how you kind of sort of contribution going forward or any way that's dragging on different conversations with customers as they expand the capabilities.
Faith Bruner: Every year and every quarter, it's a little bit different.
Faith Bruner: <unk>.
Faith Bruner: If some of them show up in a given quarter, we can meet the needs of the quarter and that's what our agenda is is really many irons in the fire is what leads to durability. You may have a spike in a quarter or two that's that's hard to predict but if we want durable growth you've got you've got to have the multiple lines to the Fi side.
Speaker Change: Yes look I think that I've said before I think insights and marketplaces is.
Speaker Change: A really really significant initiative for the company.
Speaker Change: I think I've also said very clearly that this is not something which is going to deliver revenue growth and 25 and 26 now what you'll find is our clients very interested in what visibility.
Faith Bruner: You can say the same thing the only thing I would add to that is also geographically international.
Speaker Change: Yes.
Faith Bruner: Across the World and we're also.
Speaker Change: But is it going to be a major contributor to revenue.
Faith Bruner: Executing against each of those geographic.
Speaker Change: I don't think in the 25 timeframe I think we will start to see more in 2006, but I do think if you look out longer term. If you think about three five years.
Faith Bruner: Locations as well.
Faith Bruner: Yeah.
Faith Bruner: Okay helpful. And then a quick one just to follow up sell.
Speaker Change: It could be a very significant part of our business is what I would say, but I do think the other part is our core business just continues to grow very nicely and very quickly so to be a significant.
Faith Bruner: <unk> talked about some of the newer products and how they've been driving some of that expansion we saw in the quarter.
Faith Bruner: Prior commentary kind of highlighted inside there's somewhat of a sleeping giant so any color there on the contribution this product.
Speaker Change: A significant driver of that.
Speaker Change: Nominees to be really high and so that.
Faith Bruner: Last couple of quarters, and how you kind of do the contribution going forward or any way that's driving.
Speaker Change: So the value that creates a pretty high.
Faith Bruner: Different conversations with customers that expand the capabilities.
Speaker Change: Thank you.
Speaker Change: The next question is from RF interim with Piper Sandler Your line is now open.
Faith Bruner: Yeah look I think that I've said before I think insights and marketplaces is.
Speaker Change: Hi.
Faith Bruner: A really really significant initiative for the company, but I think I've also said very clearly that this is not something which is going to deliver revenue growth and 25 and 26 now what you'll find is our clients are very interested in what we're building another painful it yes.
Speaker Change: Thanks, Thanks for fitting me in here.
Speaker Change: It looks like there are not enough questions on the acquisition. So I just wanted to ask one more.
Speaker Change: Yeah.
Speaker Change: I mean, clearly, there's a idiosyncratic value proposition of providing our clients with the combined entity.
Speaker Change: But but what if you all have talked about in the past is.
Faith Bruner: But is it going to be a major contributor to revenue.
Faith Bruner: I don't think in the 25 timeframe I think we will start to see more in 2006, but I do think if we look out longer term. If you think about three five years.
Speaker Change: Because the end markets move at a particular speed in terms of how they decided on and how they kind of work with their partners.
Do you think that this kind of this kind of kind.
Faith Bruner: It could be a very significant part of our business is what I would say, but I do think the other part is our core business just continues to grow very nicely and very quickly so to be a significant.
Kind of combined entity, we were looking at.
Speaker Change: Meaningfully kind of move growth rate for decision, making grids further or do you think you'd still be subject to.
Speaker Change: Kind of kind of the way the.
Faith Bruner: Significant driver.
Speaker Change: The industry makes the decision making.
Faith Bruner: That number needs to be really high and so that.
Speaker Change: Yeah, I think the way to think about this is we are providing prospects and clients. So it's one more reason and a very significant reason to move to the Clearwater platform.
Faith Bruner: So the value that creates a pretty high.
Faith Bruner: Okay.
Faith Bruner: Thank you.
Speaker Change: The next question is from <unk> <unk> with Piper Sandler Your line is now open.
Speaker Change: And the reverse.
Speaker Change: People, who were considering infusion at this time, we are providing them with one very big reason to.
Faith Bruner: Hi.
Speaker Change: Thanks, Thanks for fitting me in here.
Speaker Change: To move to the infusion platform.
Speaker Change: It looks like there are not enough questions on acquisitions. So I just wanted to ask one more.
Speaker Change: And that is just at the very basic level is.
Speaker Change: Like I said, if a client is going to move to Clearwater because of.
Speaker Change: I mean, clearly, there's a idiosyncratic value proposition of providing our clients with the combined entity.
Speaker Change: Compliance of regulatory reporting or AUR expansion.
Speaker Change: Right, but what if you all have talked about in the past.
Speaker Change: But didn't want to do it because you know what about the front office.
Speaker Change: It will still have a different platform well now they have a really good reason to do it. So we do think it enhances the growth rates of both organizations and that is really the promise of the transaction then there may be some clients who want only want.
Speaker Change: Because the end markets move at a particular speed in terms of how they decided on and how they kind of work with their partners.
Speaker Change: Do you think this kind of this kind of joke kind of combined entity will be able to kind of.
Speaker Change: Meaningfully kind of move growth rate for decision, making grids further or do you think you will still be subject to.
Speaker Change: <unk> front to back solution.
Speaker Change: And we expect to provide that in the quarters and years to come.
Speaker Change: Kind of kind of the way the industry makes a decision making.
Speaker Change: Joined platform with the shared data infrastructure shared security master and things of that ilk. So I do think all of these three though are additive.
Speaker Change: Yeah.
Speaker Change: The way to think about this is we are providing prospects and clients with one more reason and a very significant reason.
Speaker Change: The company is able to do themselves.
Speaker Change: Move to the cloud platform.
Speaker Change: Yeah, Yeah. That's helpful. I've known him for a couple of decades, and we have seen some times.
Speaker Change: And the divorce for people, who would have considering infusion at this time, we are providing them with one very big reason.
Speaker Change: There is a change in the industry, where once a competitor basically moves that predict resolution it forces.
Speaker Change: To move to the infusion platform.
Speaker Change: And that is just at the very basic level is.
Speaker Change: Others, I mean, the big ones.
Speaker Change: Move to the cloud for instance, right.
Speaker Change: Like I said, if a client who is going to move to Clearwater because of.
Speaker Change: One company thought just kind of forces other than industry to move as well.
Speaker Change: Compliance or regulatory reporting or AUR expansion.
Speaker Change: Is there a solution.
Speaker Change: Write that much value, where it becomes like a cascading effect, where folks will be forced to move to move to you.
Speaker Change: But didn't want to do it because you know what about the front office.
Speaker Change: It will still have a different platform well now they have a really good reason to do it. So we do think it enhances the growth rates of both organizations and that is really the promise of the transaction.
Speaker Change: Yeah.
Speaker Change: The industry really well how much money is spent.
Speaker Change: Reconciling data across all the platforms.
Speaker Change: Then there maybe some clients who want only want.
Speaker Change: Enormous people have thousands of people doing this going to work and what the promise of this transaction is we could have a system.
Speaker Change: Front to back solution and.
Speaker Change: We expect to provide that in the quarters and years to come.
Speaker Change: Which has a pre trade and post trade all of the same data plane.
Speaker Change: Joined platform with the <unk>.
Speaker Change: Sure data infrastructure shared security master and things of that ilk. So I do think all of these three though our attitude towards the company is able to do themselves.
Speaker Change: All of the same security math, so that's a promise of it.
Speaker Change: And you really would take away a very vast amount of reconciliation work, which is what.
Speaker Change: Yeah, that's helpful Saturday I've known him for a couple of decades, and we have seen some times.
Speaker Change: There are legions of people that's all they do to make sure. It all reconciles between the various applications and we can obviate the need for doing that.
Speaker Change: There is a change in the industry, where once a competitor basically moves that predict resolution it forces.
Speaker Change: Once you have it you can use exactly the same data for risk. So you don't have to build lots and lots of systems outside for data being provided to risk systems.
Speaker Change: Others better.
Speaker Change: The big ones.
Speaker Change: Move to the cloud for instance, right.
Speaker Change: One company thoughts kind of forces other than industry to move as well.
Speaker Change: And for compliance system systems and for regulatory reporting system. So I do think it can be a complete game changer, you don't see is pitching that very aggressively today because it takes time it.
Speaker Change: Is this solution going to provide that much value, where it becomes like a cascading effect, where folks will be forced to move to move to you.
Speaker Change: Yeah.
Speaker Change: The industry really well.
Speaker Change: It takes time to realize that vision, but if someone has a chance you've got to believe it's us.
Speaker Change: How much money is spent.
Speaker Change: <unk> filing data across all the platforms.
Speaker Change: Because both of these platforms.
Speaker Change: Enormous people have thousands of people doing this going to work and what the promise of this transaction is we could have a system.
Speaker Change: Our cloud Native single instance, architecture.
Speaker Change: Single Security Master infrastructure, which is very hard to transform from a legacy infrastructure. So I feel we have the right and the license to to build it.
Speaker Change: Which has a pre trade and post trade all of the same data plane.
All of the same security math, so that's a promise of it.
Speaker Change: We feel we are enormously well positioned to build it.
Speaker Change: And you really would take away a very vast amount of reconciliation work, which is what.
Speaker Change: And if we can get some more scale over time.
Relative assets and deeper risks and private assets I think that completes.
Speaker Change: There are legions of people that's all they do to make sure. It all reconciles between the various applications and weaken, albeit the need for doing that.
Speaker Change: The picture of what what the industrial data.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Once you have it you can use exactly the same data for risk. So you don't have to build lots of lots of systems outside for data being provided to risk systems.
Speaker Change: The next question is from <unk>, Kim with loop capital. Your line is now open.
Speaker Change: Okay, Great I'll make it pretty quick sandeep on the drivers behind the gross margin improvement you are seeing right now.
Speaker Change: And for compliance system systems and for regulatory reporting system. So I do think it can be a complete game changer, you don't see is pitching that very aggressively today because it takes time it.
Speaker Change: Also continue to expect.
Speaker Change: Are you also seeing shorter on boarding ramp time, and also is that providing better visibility into your revenue flow.
Speaker Change: It takes time to realize that vision, but if someone has a chance you've got to believe it's us.
Speaker Change: So very short answer yes. It is so we are <unk>.
Speaker Change: Because both of these platforms.
Speaker Change: Very very pleasantly surprised with.
Speaker Change: Our cloud Native single instance, architecture.
Speaker Change: How mature the Onboarding process has become I think a commercial model has also evolved so do we see a shorter period of time between booking and they are absolutely do we see a shorter period of time to go live absolutely and all of that obviously as you can imagine improves not just revenue growth.
Speaker Change: Single Security Master infrastructure, which is very hard to transform from a legacy infrastructure. So I feel we have the right and the license to to build it.
Speaker Change: We are enormously well positioned to build it.
Speaker Change: And if we can get some more scale over time and alternative assets and deeper risks and private assets I think that completes the.
Speaker Change: But also improves the margin profile so we.
Speaker Change: We do think I think Jim and I, both spoke about excellent execution and we feel that team continues to execute very very well.
Speaker Change: The picture of what what the industrial data.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: The next question is from <unk>, Kim with loop capital. Your line is now open.
Speaker Change: Okay, Great and then just one quick follow up with the new year and how should we think about your adult capacity this year and the timing of the ramp up if you were planning to add Pete South routes, especially with the infusion acquisition set to close in Q2.
Speaker Change: Okay, Great I'll make it pretty quick sandeep on the drivers behind the growth margin improvement you're seeing right now and also continue to expect our.
Speaker Change: Are you also seeing shorter on boarding ramp time, and also is that providing better visibility to your revenue flow.
Speaker Change: Yes.
Speaker Change: Quite transparent when our business grows.
Speaker Change: 20, plus percent organically there is a lot of room to make investments. So I would just say our ability to add more money.
Speaker Change: So very short answer yes. It is so we are very very pleasantly surprised with.
Speaker Change: Sales and marketing efforts and frankly, even R&D effort is very high.
How mature the onboarding process has become.
Speaker Change: I think our commercial model has also evolved so do we see a shorter period of time between booking and Iraq, absolutely do we see a shorter period of time to go live absolutely and all of that obviously as you can imagine improves not just revenue growth, but also improves the margin profile. So we.
Speaker Change: Because unit economics are better so once you have 20% growth.
Speaker Change: And improving unit economics, and you think about that.
Speaker Change: You should have a lot of money to invest and so <unk> teams are fully funded not just in North America, but in continental Europe in the UK and in Asia.
Speaker Change: We do think I think Jim and I, both spoke about excellent execution and we feel that team continues to execute very very well.
Speaker Change: To the extent appropriate so we do feel we continue to add add muscle into into the GPM function.
Speaker Change: Yeah.
Speaker Change: Okay, Great and then just one quick follow up with the new year and how should we think about your adult capacity this year and the timing of the ramp up if you work on.
Speaker Change: Thank you.
Sandeep Side: There are no further questions I'd like to hand, the call back over to Sandeep for concluding remarks.
Speaker Change: Planning to add sales reps, especially with the infusion acquisition set to close in Q2.
Yes.
Sandeep Side: I just wanted to take a moment to say thank you to all of the analysts who cover us and the investors who have shown tremendous faith in us over the last several quarters and years. We are very proud of what we've done but we're also very proud of the confidence you're showing us. So thank you. Thank you very much.
Speaker Change: Yes, it does.
Speaker Change: We are quite transparent when our business grows.
Speaker Change: <unk> plus percent organically, there's a lot of room to make investments. So I would just say our ability to add more money to.
Speaker Change: Sales and marketing efforts and frankly, even R&D effort is very high.
Sandeep Side: That concludes today's conference call. Thank you for your participation you may now disconnect your lines.
Speaker Change: Because unit economics are better so once you have 20% growth.
And improving unit economics, and you think about that and they say, yes, you should have a lot of money to invest and so <unk> teams are fully funded not just in North America, but in Continental Europe.
Speaker Change: In the UK and in Asia.
Speaker Change: To the extent appropriate so we do feel we continue to add at muscle into into the GPM function.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: There are no further questions I'd like to hand, the call back over to Sandeep for concluding remarks.
Speaker Change: Yeah.
Sandeep: I just wanted to take a moment to say thank you to all of the analysts who cover us and the investors who have shown tremendous faith in us over the last several quarters and years, we're very proud of what we've done but we're also very proud of the confidence you're showing us. So thank you. Thank you very much.
Sandeep: That concludes today's conference call. Thank you for your participation you may now disconnect your lines.