Thank you and welcome everyone to Clearwater Analytics fourth quarter and full year 2022 financial results conference call. Joining me on the call today are Sandeep Sahai, Chief Executive Officer and Jim Cox, Chief Financial Officer. After their remarks, we will open the call to a question-and-answer session. 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 1995. Expressions of future goals, including business outlook, expectations for future financial performance, and similar items, including without limitation, expressions using the terminology may, will, can, expect and believe and expressions, which reflect something other than historical facts are intended to identify forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the Risk Factors section of our filings with the SEC. Actual results may differ materially from any forward-looking statements. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events that may arise after this conference call, except as required by law. For more information, please refer to the cautionary statement included in our earnings press release. Lastly, all metrics assessed on this call are non-GAAP, unless otherwise noted. A reconciliation can be found in the earnings press release that we have posted to our Investor Relations website. With that, I will turn the call over to our Chief Executive Officer, Sandeep Sahai.

Thank you, Joon, and welcome, everyone. Let’s start with the numbers because we are delighted to share robust results for both Q4 and the full year 2022. Revenue for the full year grew 20.4%. Gross revenue retention stayed at 98% for the 16th straight quarter. Net revenue retention climbed to 106%. Gross profit was 75.7% in Q4. EBITDA margin for Q4 was 29.4%. We generated free cash flow of $16.6 million in this quarter. And in the last 100 days of 2022, two more of the 20 largest insurers in North America chose to move to the Clearwater platform. That, I hope you will agree, is very compelling execution. Looking back at the year, I could not be more proud of our team. As all of you know, like other fintech firms, we faced headwinds throughout the year, and I believe the urgency and effectiveness with which we reacted and executed was very strong. And we didn’t just address the challenges we faced. In fact, we made our business stronger and more resilient by working with our customers to craft a modified commercial model. Given what we accomplished in 2022, we have renewed confidence that our overall plan, our commitment to building disruptive technology, our product strategy and our customer-centric approach will stand the test of time. Let’s dig a little deeper into the fundamentals of the business. When we completed our IPO in September 2021, we laid out five pillars to guide us, and we continue to build upon them throughout 2022. Given the New Year, we want to provide an update on those pillars, which are largely unchanged. Pillar number one is consistent, reliable and durable growth. This is the first pillar for a very good reason. We want an ever-increasing number of clients to choose our platform. And for those who already own our platform, we want them to grow. Consistency and predictability in our growth is important to our ability to invest in the medium and long term. Our Q4 revenue was $82.7 million and full year revenue was $303.4 million, which represented year-over-year growth of 20.4%. This accomplishment in a turbulent and challenging time is testament to the resiliency of our business and the ability of the team to navigate challenges as they arise. With strong booking in Q4, booking for the year 2022 exceeded the budget we had laid out in the beginning of the year. That allows us to look forward to 2023 with confidence in our plans, and we expect to deliver another year of 19% to 20% growth. We continue to watch the economy and the market conditions and will remain vigilant and agile in our response. More specifically, we will look to our booking to guide our continued investments. Pillar number two is our sizable total addressable market. We have always approached the sizing of the market opportunity with a lot of rigor because our GTM investments are determined by it. We have built a detailed view of our TAM by market, submarkets and geographies and have previously communicated a market opportunity of over $10 billion. In addition to using our own team to validate this on a continuous basis, we work with leading consulting firms to further validate and refine this estimate. More importantly, they help us define areas for TAM expansion. It is easy to be content with the long runway we have in our current markets, but our ongoing investments in R&D serve to find adjacencies that can continue to enhance the TAM on an ongoing basis. An example of actions related to this effort is our acquisition of JUMP Technology. Not only does it double our European presence, but it also enhances our TAM by $1 billion by allowing us to deliver front office systems, including order and portfolio management to current and new clients. 157 new logos went live on our platform in calendar year 2022 and is proof of our ability to capture them. In addition to the two large insurers we spoke about earlier, our new customer wins from Q4 include Adventist Health System, Bimini Advisors, Homestead Advisers Corp, Meeder Investment Management, Payden & Rygel, Robinson Capital Management, and WestCap Management, just to name a few. Geographically, we are encouraged with our early continued successes in Asia, and in Q4, we signed Avallis Investments in Singapore, MSIG Insurance in Thailand, and PT Asuransi MSIG in Indonesia. These organizations joined our growing group of clients in Asia and Australia. In the majority of these cases, we continue to replace legacy solutions and provide a daily reconciled comprehensive view of the portfolio across asset classes and geographies. This is where our third pillar comes in: our competitive next-generation platform with deep competitive moats. Across the industry, investment and operations teams face real challenges when they deliver to the businesses. They have to deal with multiple systems that are narrowly focused on a given geography, a given asset class or a business function like risk. They have to bring all that together for the business who want to see a comprehensive view of the assets. Then there is data quality. They have to ingest and reconcile and keep track of ever-changing regulations and regulatory reporting requirements. Operations teams need to manage all of that and deliver on time. Our single-instance multi-tenant architecture is truly the next-generation technology that has been proven in industry after industry. The value of the single instance architecture results in a constantly updated software platform that keeps pace with changes in accounting and regulations, obviating the need for costly and time-consuming upgrades. Clients no longer need to track the tens of thousands of regulatory alerts that come out every year. They simply rely on Clearwater. I was speaking to a client recently who left the competitor to join us and asked why. They said they have been following our regulation and compliance advice for years. So they concluded that they would benefit from it being integrated into our software. Multi-tenancy is changing the data quality landscape. Our platform fosters a network effect that allows for the highest data quality. Since each client has to ingest and reconcile their own data, we do it once for everyone. But we are not complacent about our position. We continue to invest in our product to further deepen our competitive moat. In 2022, we invested 25% of revenue in R&D and plan to continue this level of investment in 2023 before moderating that in subsequent years. Moving to our fourth pillar: expanded product offering. We believe that the continued and sustained investment in R&D allows us to bring additional products to market. When you first met us, Clearwater was predominantly a single product company, but that has and will continue to evolve as we build a best-in-class commercial model. Today, we offer multiple adjacent products, which can be used independently of Clearwater core. Clearwater Prism continues to gain market acceptance, Clearwater JUMP OMS, PMS, for order and portfolio management. Clearwater JUMP for the full investment management life cycle. We offer add-on modules, which can be used alongside Clearwater core such as Clearwater LPx, Clearwater LPx Clarity, Clearwater Performance Plus, and Clearwater unit-linked funds. Let’s take them one by one, starting with Prism. We are proud to announce that in Q4, two of our largest clients, Nationwide and JPMorgan Asset Management, chose to use Clearwater Prism. The Clearwater platform combined with Clearwater Prism aggregates data, performs a series of calculations and validations, and generates reports that allow JP Morgan Asset Management to comply with their daily regulatory reporting obligations. We are also excited to share that we have signed our first significant seven-figure Prism deal in Europe, expanding our offering for one of our largest clients. This client will be able to use Prism to generate reporting for their end clients, representing over $290 billion in AUM. Next is JUMP. As you will recall, we closed the JUMP acquisition in November of 2022. In December, we sold the JUMP platform to Luxembourg-based insurance provider, Cardif Lux Vie. This is a key new client win and demonstrates that the combination of Jump and Clearwater constitutes an attractive offering to the European asset management market. We look forward to supporting Cardif Lux Vie with their investment performance, regulatory compliance, and reporting needs. We also expect additional customers in our core markets to be attracted to our combined product offering. In addition to JUMP standalone offerings, we have integrated Clearwater and JUMP’s development and product teams for defined products so that we can offer integrated solutions for unit-linked funds and an enhanced feature-rich performance module to existing Clearwater clients. This brings us back to nearby products like Clearwater LPx. Clearwater LPx, our product focused on limited partnerships, is well received and gaining traction with both existing clients and new logos in the market. We added more than 40 clients to the Clearwater LPx offering in 2022. As you can tell by its rising popularity, the solution is being selected because it helps organizations dig deep into their private equity investments, providing them the visibility to understand long-term returns. Clearwater LPx Clarity takes it one step further to convert unstructured data to structured data to provide our clients’ front-office teams with underlying portfolio exposure and look-through, including investment and risk analytics. Prism was our first adjacent product, and it is now starting to deliver meaningful bookings and revenue. We similarly expect our other expanded product offerings to create increasingly higher impact in 2023 and beyond. The fifth and final pillar is Clearwater’s client-centric approach. The ultimate value of any tech platform rests in the value delivered to clients, the impact it has on the business and overall client delight. In Q4, we received an NPS score in excess of 60%. That is simply the best in the industry. We work hard to ensure that our tech and our global teams are working towards the singular goal of client delight. Truly, client satisfaction is at the heart of everything that we do. In Q4, as a testament to this fact, Clearwater won numerous awards, the Tech Provider of the Year Award for Excellence from InsuranceAsia News, the best Redtech Solution from Insurance POST, and the Technology Firm of the Year from Insurance Asset Management. These awards acknowledge the profound impact Clearwater is having on our clients’ investment operations in the U.S., Europe, and the Asia Pacific region. We are happy to report that Clearwater’s CMO and CHRO both won awards for their leadership in marketing and HR innovation, respectively. Now looking forward, many of you might ask how we expect macroeconomic conditions to impact our business. We are not reacting by laying people off. Rather, we are growing in line with our business. We are not cutting corners in R&D. Rather, we are consistently investing. We are not afraid to expand geographically or through acquisition. But rest assured, we are watchful of the economy and the markets. We will be led by bookings and not by economic forecasts about what might or might not happen in the coming quarters. We stand steadfast on our pillars: consistent, reliable, durable growth, focus on TAM, enhancing our SaaS platform, innovating our product offering, and dedication to clients. Little has changed in our philosophy, approach or culture, except that after weathering 2022, we have proven our resiliency and therefore, have even higher conviction. Before returning with a few closing thoughts, I would now like to hand the call over to our Chief Financial Officer, Jim Cox, to provide more details on our fourth quarter and full year financial performance as well as updated guidance for our first quarter and full year 2023.

Thanks, Sandeep, and thank all of you for joining us. It is rewarding to report on our Q4 and full year 2022 results. I plan to spend our time summarizing a few items from our Q4 results and then explain the financial impact of the JUMP acquisition, which closed on November 30, the tax receivable agreement or TRA expense, update you on the continued progress of our transition to the base plus model, and then conclude by providing color on our 2023 guidance. Please note that our results will be discussed on a non-GAAP or adjusted basis and include the results of JUMP since the acquisition unless otherwise noted. Turning to Q4 and 2022 results, let me start with the top line and the metrics that drive revenue. In 2022, we are especially proud to have delivered 20.4% year-on-year revenue growth in an otherwise challenging market environment. Q4 revenue was $82.7 million and full year 2022 revenue was $303.4 million. Q4 revenue included $2.7 million of revenue from JUMP in December, which was roughly $1.5 million higher than we expected when we provided our Q4 guidance. JUMP’s revenue included a perpetual license agreement with Cardif Lux Vie, which closed in December. We were happy to see that the combination of Clearwater’s scale and JUMP’s functionality achieved success with a large European client so quickly. Annualized recurring revenue, or ARR, at the end of December 2022 was $323.5 million and included $6.4 million of ARR related to the JUMP acquisition. The insurance vertical comprises 52% of ARR. The asset management vertical comprises 33% with corporates, government, and other entities comprising 15% of ARR on December 31, 2022. As of December 31, 2022, the Clearwater platform processes and reports on $6.4 trillion in assets daily, up from the $5.9 trillion at the end of 2021. This increase reflects business growth from new clients and existing clients that more than offset the market decline from lower equity and fixed-income prices caused by the significant increases in interest rates throughout 2022. The bedrock of our business continues to be our client-focused approach, which has led to best-in-class customer satisfaction and an industry-leading 98% gross revenue retention for the 16th straight quarter. In the fourth quarter, net revenue retention increased to 106%, a nice uptick from the bottom we predicted in Q3 of 103%. The 106% net revenue retention shows the positive impact our commercial model transition has had on our business. Let me highlight more in relation to our commercial model transition. As a reminder, we have historically charged our clients a fee, primarily based on the assets they manage on our platform, subject to contracted minimums. A significant majority of the assets on the platform are high-grade fixed income assets, which had historically led to very low levels of volatility and predictable revenue streams. With the significant market volatility in both equity and fixed income in the first half of 2022, we evaluated our commercial model. We transitioned our contracting structure to a framework we now describe as base plus. A base plus contract framework includes a base fee for prospective clients existing book of business, plus an incremental fee for increases in assets on the platform. The base plus model includes annual increases in the base fee and enables us to charge additional fees for supplemental services or additional products should the client subsequently select to utilize those services. This base plus structure limits the downside volatility in our asset-based fees. I am happy to share that since July, 100% of our new clients with contracts greater than $500,000 in expected annual revenue are using the base plus commercial model. We also made significant progress with the commercial terms across our existing client portfolio. In 2022, clients representing 80.1% of ARR either agreed to modify contracts or price increases in their existing basis point contracts. This is precisely on target with our goals. We simply would not be able to make these changes if we did not have exceptional client servicing and a market-leading solution for these clients. Going forward, we aim to have a vast majority of new customer contracts on the base plus model. Additionally, we will continue engaging with the remaining clients to transition them to the base plus model. Within one small portion of our client base, we do plan to maintain an AUM-based pricing model. Our largest asset management clients have historically relied on Clearwater to be an enabler of their growth. For those clients, their NRR growth rates were consistently higher than our reported NRR. For those clients, we will continue to focus on growing with them as their assets grow. Now let’s turn to profitability. We reported $81.1 million in EBITDA for the full year 2022 and $24.3 million in EBITDA for Q4, which both exceeded the midpoint of our guidance by $1.6 million. EBITDA margin was 26.7% for the year, our first full year as a public company. Q4 EBITDA margins were 29.4% as our better revenue performance, combined with a more cautious hiring approach, resulted in a 60 basis point improvement over that margin from Q4 2021, which was our first full quarter as a public company. Gross profit in the quarter was $62.6 million, and gross margin came in at 75.7%. Gross margin continues to be resilient even as we continue to execute on building operations for new client growth, including our investment in international markets, where we are onboarding clients in Singapore, Thailand, Hong Kong, Australia, Japan, France, the UK, and Netherlands, to name a few. Research and development expenses in the quarter were $20.1 million or 24.3% of revenue, an increase of $0.2 million from Q3. Sales and marketing expenses in the quarter were $10.4 million or 12.5% of revenue, an increase of $0.2 million from Q3. General and administrative expenses in the quarter were $7.8 million or 9.4% of revenue, a decrease of $600,000 from Q3. These strong results reflect our continuing focus on execution and efficiency while also successfully integrating JUMP. Let’s talk about JUMP. After closing the JUMP acquisition on November 30, we began the process of integrating JUMP into Clearwater with the creation of joint teams to merge our development efforts and provide a single solution for our business functions, like performance or regulatory reporting, as Sandeep described. JUMP doubles our European presence with over 100 employees and ramps up our expansion efforts in Europe, extending our offering to our existing clients as well as providing full investment life cycle functionality to the investment management industry. We already have opportunities to enhance the performance reporting for current clients and add trade order management to their existing Clearwater solution. We’re also excited about several European prospects where JUMP will be the solution for unit-linked funds and Clearwater will be the solution for the rest of their investment book because this validates our acquisition hypothesis and shows the esprit de corps celebrated by the combined team. JUMP has historically been a perpetual license business and recorded its results under IFRS, not U.S. GAAP. Throughout 2023, in addition to merging the go-to-market teams and bringing their product to the cloud, we also plan to harmonize JUMP’s offering into a recurring revenue model, consistent with Clearwater. At year-end, JUMP had $6.4 million in ARR. Given the joint selling motion, the transition to U.S. GAAP and product integration, we will generally not report JUMP results separately. As we migrate the JUMP business to a recurring revenue model, we expect the transition will reduce our overall EBITDA margins in the first half of 2023 and then improve margins as new recurring revenues from JUMP layer into the financials. Since JUMP is less than 10% of our overall cost structure, we continue to expect consolidated EBITDA margins to increase in 2023 compared to 2022. Moving to the tax receivable agreement expense, you’ll see that we incurred $5.9 million in tax receivable agreement expense in Q4 and $11.6 million for the year. These expenses are incurred in lieu of tax expense when we utilize tax deductions subject to our TRA. Although we reported a GAAP pretax loss, we would have had taxable income in 2022, primarily because of the capitalization of R&D expenses and lower stock-based compensation tax deductions. Absent the Up-C structure and tax receivable agreement, we estimate that the income tax expense would have increased by $14 million. The recording of the TRA expense did not impact operating cash flow in 2022. However, we expect to have to pay the liability related to the 2022 expense in Q4 2023. Let’s turn to the balance sheet and cash flow. We ended the quarter with $255.6 million in cash, cash equivalents, and short-term investments and $50.5 million in total debt, resulting in net cash holdings of approximately $205 million. Even with the JUMP acquisition in Q4, the ending cash, cash equivalents and short-term investments at the end of 2022 was still $1 million higher than at the end of 2021. Free cash flow for the fourth quarter was $16.6 million, reflecting a conversion of EBITDA to free cash flow of 68% and included $1.9 million of capital expenditures. Now let’s turn to guidance. For most of 2022, we hired in advance of our growth. For 2023, we plan to more tightly align our headcount growth to our new business growth. Therefore, we expect modest EBITDA margin expansion in 2023. For the full year 2023, we expect revenue to be in the range of $361 million to $364 million, representing approximately 19% to 20% year-over-year growth. We expect our adjusted EBITDA to be in the range of $97 million to $98 million, which is 20 basis points better than the 2022 adjusted EBITDA margin. For 2023, equity-based compensation is expected to be approximately $80 million. After 2023, we expect equity-based compensation to decrease as a percentage of revenue. Equity-based compensation related to the JUMP acquisition is expected to be approximately $25 million. Depreciation and amortization expense is expected to be approximately $9 million. Our full-year non-GAAP effective tax rate is expected to be 25%. We project full-year diluted non-GAAP share count to be approximately 255 million shares. Focusing on guidance for the first quarter of 2023, we expect revenue to be $83 million and adjusted EBITDA to be $20 million. In Q1, we expect an adjusted EBITDA margin of 24%. This is impacted by the JUMP transition to recurring revenue. Additionally, annual merit increases impact the Q1 EBITDA margin. As in previous years, we expect to expand margins throughout the year in 2023, resulting in an expansion of EBITDA margin for the full year. After a year of strong execution in 2022, in 2023, we look forward to more of the same: winning new logos, expanding with existing logos, integrating JUMP into our further growth plans.

Thank you, Jim. We appreciate your interest in Clearwater Analytics. Despite some of the pressures that came with an uncertain market environment, 2022 was our strongest year on record, and we ended with great momentum, capturing impressive client wins across the globe and demonstrating just how resilient we are as a business. We enter 2023 with renewed confidence in our ability to capture more TAM, displace legacy vendors, drive R&D and technology innovation and deliver greater value and growth opportunities to our clients. As always, we remain relentlessly focused on our clients’ long-term success and supporting them as they benefit from our technology’s powerful network effect. With that, let me turn it over to the operator for questions.

The first question is from Rishi Jaluria with RBC. You may proceed.

Wonderful. Hi, Sandeep. Hi, Jim. Thanks so much for taking my questions. Nice to see continued resilience in the business. I want to start with the outlook for next year; I mean, really impressive numbers. Maybe two points on that. Number one, can you really help us understand what is giving you the confidence and what is playing out as acceleration relative to the ARR growth that you just put up in Q4? And alongside that, I know, Sandeep, you had mentioned you’re going to invest depending on what you see in your bookings and not on macro assumptions. But as we think about the guidance that you gave us for 2023, are you kind of assuming that macro stays the same? That it improves in the back half of the year? Any insight would be helpful. And then I’ve got a quick follow-up.

Yes. Rishi, thank you for the question. Before I begin, I did want to say that we sort of went on for quite a bit there like 37 minutes, but there was just so much to cover. We thought it would be helpful to get that all out there so that we can proactively answer some of that. But Rishi, just to your question, I do think that when you look at our business, we have a really good sense of the ARR. And then you have net – a gross revenue retention of 98%. So the ability to forecast that is actually quite high. And the second element is bookings we have done in the last 6 months. When you look at that, we have a really good understanding of what revenue will come about from that booking. Obviously, that booking builds up through the year, but we know exactly what the project plans are and how that booking sort of translates to revenue. And that’s why when you hear Jim and me talk, we always say we’re going to let booking guide our investment, not revenue because booking is really for us the forward indicator. So that’s how we think about it. I do also want to make one other point here is Rishi, last year was hard. But if you go back to February of last year and you look at our revenue guidance from last year, it was $302 million to $304 million. With all of the challenges we faced, we delivered $303.4 million. If you look at the EBITDA guidance we gave in the beginning of last year, it was $80 million to $82 million. Then go back in we delivered $81.1 million. So I do think this model works really well. And frankly, we thought we would do better than the numbers we guided to, but all of the headwinds we faced, we still delivered on guidance. So we feel really strongly about what we can do. And our current plan sort of assumes that the macroeconomic condition is not going to improve very much, but it won’t get a whole lot worse like it did last year. Like last year, we felt the interest rate increases were dramatic. We don’t expect dramatic increases, but we do expect continued increases in interest rates. We also assume that inflation is not going to abate. And if those happen, those will be nice tailwinds to further our business. Jim, would you add to those?

It's great.

I know you said you had a follow-up, Rishi, did you want to ask?

Sorry. So my apologies. Yes, just a very quick follow-up. So when I look at the guidance, right, I appreciate that your guidance is stock-based compensation. And stripping out JUMP, it looks like actually SBC in dollar terms is going to come down as well as a percent of revenue. And you’re guiding to kind of a low level of dilution, which I think is great to see in this sort of environment. Can you just speak really quickly to what are the drivers of that and maybe what you’ve done internally and philosophically to bring that level down to a more normalized level? Thank you.

Yes, I think that the key metric to look at is when you look at the diluted share count year-over-year, it’s flat, right? That non-GAAP 252 has stayed consistent. So there really hasn’t been any dilution through that. As we think about stock-based compensation, we’ve isolated the JUMP portion of that. That was all considered as part of that business combination, but they need to earn that over time. And so that’s why it’s going through compensation. For the stock-based compensation related to Clearwater and our guide for this year, it reflects the additional awards in this year that are going to be granted across. And we feel like we’re really well set across the organization to get everyone locked in and really committed to drive for the next extended period of time. And obviously, when you’re growing 20%, 20% plus, you continue to grow through those numbers that we’re trying to keep flat and static. And therefore, we would have kind of increasing leverage as a percentage of revenues of our stock-based comp expense. Again, we looked – we sat down with our compensation consultants and looked to see what are all our peers doing and where do we sit? And we’re incredibly comfortable with where we’re landing relative to our peers. Given how we performed last year, we feel very, very good about that trade-off for shareholders.

Wonderful. Thank you so much, guys.

Thanks, Sandeep, and thank all of you for joining us. It is rewarding to report our Q4 and full year 2022 results.

Hi, guys. It’s Michael on for James. Appreciate you taking our question. I appreciate the color you provided on the stand-alone modules and their relative adoption. I was hoping you could give us some incremental color on some of the Prism wins specifically. I know you mentioned JPM as well as another seven-figure deal. But is there any directional color you could provide us in terms of the ACV expansion you saw in both of those Prism deals?

Hey, Michael, thank you for the question. Look, Prism was the first product we went out with. And so these wins at both JPMorgan and Nationwide are really, really significant. So the question is what was the primary use case, right? In the first case, the situation was there was a client reporting need, which had to be done on a daily basis. They had to bring together data from many spots and merge it all together manually. This is just hard to do when you’re trying to do that manually or with homewritten software. What Prism does is bring data from various sources, pulls it together, ingests, does the calculations, and provides that report to the regulatory body on a daily basis. So that is one way to use Prism. The other one was really about ARR combination. So you have accounting systems of various kinds, some on Clearwater some not. The question is how do you get a comprehensive view of all of your assets? Prism is able to do that. Now I think the interesting thing for us here is, Michael, that initially, we were seeing Prism deals of $300,000 and $200,000 ARR. We have now seen deals of over $1 million ARR, and this one in Europe we just announced or talked about today in the call. So we feel like you have Prism which has become a growing product with significant impact on both booking and ARR. The rest of the products, which we have talked about, they are in the infancy, if you will. They will still take time before they start to deliver significant results in 2023 and beyond.

Great, that’s really helpful. Maybe on pricing, how should we think about the difference in the economics between the customers who are adopting the base plus model versus those who are now commanding – or those who are now adopting a higher take rate? I’m just trying to sort of understand the long-term impact of some of the potential resistance from your wave three customers to sort of transition to that new model fully?

Yes. So the way we think about it and the way the numbers are playing out is that the base plus model doesn’t necessarily impact our NRR number overall. It just takes the volatility out, that downside volatility out. As we kind of – the adoption with all of our new clients, it’s been fantastic when we reflected and saw that 100% of all of our large contracts in the second half of the year were on the base plus model. It made us feel terrific about just how this resonates and makes sense to all of our clients. For those larger strategic asset managers who we are growing with, as I mentioned, they typically had higher NRR rates than what we had reported. We have a go-to-market model with those folks where we’re actively helping them source and grow their businesses. From that perspective, it just made sense to continue aligning with that. So, I would say that to finally get around to answering your question, I’m not sure that the contracting model impacts that NRR or that take rate, and it’s more about the use case with the customers.

Michael, if I can just add to this. Look, I think what happened was some of the largest asset managers' way of allocating Clearwater costs internally to the businesses was driven by AUM in those markets, and that’s how they charge their fees, right? So there, we did have resistance. But over time, if you look at the last 2 years and 4 years and 6 years, that’s been the highest NRR business for us, those large asset managers. So we sort of spoke with them, and were there resistance with that sub-segment? Yes, there was. And so we’ve gone and said, okay, fine, we will live with the current model because we feel the NRR would anyway be the highest there. I don’t know, I wanted to provide the details that you understand why Jim said that we’ve done this with 80.1% of ARR clients representing that much, but we are not pushing to try to get to 100%.

That’s great color. Thanks, Sandeep and Jim.

Hi, thank you for taking my question. I appreciate you breaking down the split between insurers, asset managers, and corporations that seem to be pretty much in line for what it’s been for the past year. Moving forward, do you see any particular growth from any of the verticals, either for 2023 or beyond that? Any place you may be getting share?

I think we are – thanks Ella, it’s good to hear your point. I think we are gaining share in all the verticals. As these percentages change, it’s just about how quickly we are gaining share in each of those. Insurance has been and continues to be about half of our business and is a really large and important piece of our business. With our investments in both Prism and in JUMP, we see greater opportunity as well in asset management. If you just look at our TAM at the highest level, the largest TAM is in that asset management segment. If you were to look out to multiple years into the future, you would assume that asset management would continue to increase on the margin as far as a percentage of overall ARR. Sandeep?

Yes. I think you may see some change in a quarter or two quarters because you get a large deal like we announced: two very large insurers, two more of these insurers who are in the top 20. You may see that bubble up and down, but we don’t expect to win in every segment. We expect to win in every segment. We expect to win in the REIT market, which we haven’t traditionally won in. We expect to continue to grow in every industry. If you look at the TAM, there is runway in each one of them. So, there really isn’t a need to say, hey, we are not going to push that segment; why not, right? We have dedicated teams focused on specific industries and sizes.

Great. That’s very helpful. Thank you. And one other question for me, digging a little deeper into your 20% revenue guidance for 2023, do you have any thoughts about how much of that would come from new logos versus higher pricing?

So, the vast majority would come from adding new business. Those could be both new logos as well as additional products and services to existing clients relative to the price increase absolutely.

So yes, just to give you a sense, Ella, that I think more than 90% – we don’t have an exact number, but I can tell you more than 90% of the revenue would be from current clients whom we have either fully onboarded or we are onboarding. These are deals that have been won. I don’t want to put a number on it, but I do know it will be in excess of 90%. Is it 92%, 93%? I don’t know exactly. We are happy to sort of get back to you. But it is that overall magnitude.

Great. Thank you so much. Appreciate it.

Good afternoon. Congrats on the quarter. Sandeep, I’d love to follow up on your comments that you made in the past on perhaps the business enablement use cases that Clearwater really allows some of the asset manager customers. Give us a little color on what you are seeing in terms of willingness to invest? And specifically, the current play whether it can be tied to our front office business use case, is that allowing you to maybe tap into more budget or happen to more green light projects than if you were solely viewed as an accounting tool? Thank you.

Yes. Thank you, Gabriela for that question. I really think it’s a really important question about why asset managers who are under some pressure, you would agree on cost, would sort of go out and sign up for Clearwater. What I would like to tell you is that almost always, it is because it is seen as a growth enabler. Clearwater helps clients get deals because the reporting and the analytics that we can provide are superior. There are many software products which do that reporting well for a given asset class, and I think that there are many of which provide for a given geography. The reason clients continue to grow with us is that we actually – Gabriela, we go into pitches with them. We will go do joint pitches with asset management clients when they bid on a book of business with a potential client. When you start to be seen as an enabler of growth, I think that changes everything. There is a client obviously probably not appropriate to name, but who really lost several RFPs. When they did the analysis of why they lost the RFPs, they found that other asset managers just had superior reporting online, they had superior analytics, and they had aggregative reporting and accounting functions. That’s why I have always thought that if you go back to 2022 and look at why we won, it is because of that. Even the big Prism deal we announced in Europe, which was over seven figures, we saw there was reporting to their clients. That’s why they bought us. They used to take days and days to get these reports ready for their clients, and they come to Clearwater and we should be able to generate that in a matter of hours. It should be available online. So again, if you think of the proposition not just as an accounting software but as an enabler of growth, that’s why I think we get such traction.

That makes sense. And Jim, a clarification for you on the full-year guide, the implied revenue acceleration in the back half, is that a function of the bookings in the pipeline that you see today plus the JUMP transition? Just a little bit on the moving pieces getting you to that?

Yes. I think it’s the onboarding of the assets from our Q3 and Q4 bookings flowing into our revenue line item. First, we win the business, then we onboard the business. As those assets are being onboarded, they grow, and it takes some time to onboard that. That’s the major element of the growth throughout 2023. There is some impact as well from the transition to term for JUMP.

And Gabriela, if I could add to that, the booking in the second half of 2023 will likely have very little impact on 2023 revenue. What really impacts 2022 revenue is booking in the second half of ‘22 and Q1 and Q2 of 2023. Those three will matter the most.

Great. Alright. Thanks very much for taking my question. I will keep it to one just given the time here. So, we obviously all understand that you just completed the acquisition JUMP, but you are in a good financial net cash position, as you have mentioned. Sandeep, I think you said at the beginning of the – or at some point in your prepared remarks that you are not afraid to make more acquisitions. This suggests you are on the offense. Can you elaborate on what you are seeing out there as it relates to private market valuations and your appetite to invest? I believe on the JUMP acquisition call, you mentioned that you screened over 300 companies in your due diligence process. I would love to hear more on the due diligence process you are going through right now. Thank you.

Yes. Thank you, David. Thank you for that question. Look, I think JUMP I thought was – we are really excited about JUMP. Not just for Clearwater, but for the employees of JUMP themselves and being able to take their brand and what they have developed and take it around the world, I think it’s so exciting, also for our current clients. Our current clients need those modules. We are very excited about what JUMP can bring to us. But I write down what is – what matters. I think Jim is always telling me, the bar is going to be really, really high because we have a good clean business that grows nicely and is highly profitable. So, let’s not do something to jeopardize that. The bar is going to continue to be high. What are we really looking for? One is, if it helps us expand geographically. For example, in the case of JUMP, does that provide us that route? The second would be something that makes our platform more comprehensive. If there are functionalities that clients want which we don’t do well enough or as deeply as we could improve. The third thing is if we can bring more value to our current clients. There is a recognition that investment accounting isn’t working for many clients worldwide. If we can hit in that process of them coming on to Clearwater, I think that would be really interesting. We obviously just did JUMP, and it is going nicely. We will have to see them start to deliver some results. The early sign with Cardif was great. It happened in December. We build – we got that done. We expect that we will continue to look aggressively for acquisitions. There isn’t a goal to do one this year or anything like that. But if we found the right one, we would do it; we would not wait.

Great. Thanks for taking my question. I want to follow up on some of the commentary you made around the module side. I understand that it will take time to see the full impact from the portfolio of up-sell modules. But looking at these products today, how should we think about the ASP difference for an average core plus customer who buys just the core Clearwater platform versus someone who buys the full suite? Is that a 20%, 30% up-sell? And given the strong R&D investments, how can that up-sell percentage grow over the next 1 year to 2 years?

Sure. And this is Jim; let me take that. It’s important to think about – when you are on the core Clearwater platform, you are doing all of the accounting for all of these. At the LPx, we are doing the accounting for those LPs, for you already. That’s being charged as part of your base fee and as all of that grows. Let’s say you say, okay, I want to step through and do LPx and add more visibility into that functionality, more broadly and robustly than just the accounting and reporting functionality and/or LPx clarity. I want to understand the underlyings in this. We would then charge an incremental amount per LP for those on that tier. Obviously, it depends on the functionality. Sandeep spoke about how Prism in that instance was a seven-figure deal. LPx could be a few thousand dollars per LP as an example of the variability between those. It just depends on the specific circumstances of the client.

Kamil, this is Sandeep. The biggest value though is not just in the LP processing. It really is in the – you can get a comprehensive view with the LPs and the mortgages and the derivatives and the equities and the fixed income products. That’s where the real value comes from. I don’t think we do LP accounting any better. Yes, we are trying to improve the look-through so you can see a portfolio better. The value really comes from that whole comprehensive ability.

Yes. Hi. Thanks for taking my question. Congratulations on the quarter. Sandeep, just wanted to ask if you could comment on the trends you are seeing with the top of the funnel and also the pace of conversions that you saw in Q4 compared to previous quarters?

Yes. Brian, thank you for that question. I think we were a little – we said always that we will follow bookings, but not economic forecasts because we just have experienced the difficulties of those forecasts. Q4 was great. We were surprised. As Jim said, we became a cautious in hiring because we started believing the forecast a bit and we did really, really well. So, we have now decided internally to say, no, we are just going to follow bookings because bookings are much better for us; they’re a leading indicator. Do we see the funnel continuing to grow? Absolutely. Do we continue to see very large clients wanting to come on to Clearwater? Yes, we do. And we continue to see smaller clients, but we don’t see the softening quite yet. If our bookings sort of come down just a little, we will re-evaluate. But right now, we just don’t see it. I’m always looking for signs of that based on every report I see, but there is enough pain in the market that people want to continue looking at Clearwater.

Okay, great. I will make this quick. First, congrats on getting to that 80% target mix for the customers on base plus in just two quarters, which is amazing. Do you expect that mix to change much going forward? Just curious if you have any specific target for 2023?

So, for all of our new clients, the other metric that was really terrific was 100% of those clients that signed up for larger contracts in the second half of the year were on the base plus model going forward. As we continue to add customers, the base plus model is the de facto way that we add those customers. As we add those clients over time, that will gradually tick up.

Okay. Great. Maybe I could just – go ahead.

No, go ahead, please.

Maybe I could just squeeze in one more. Sandeep, you mentioned a lot about the momentum you are seeing in Asia. Can you just share what’s going on there in terms of go-to-market and the momentum that you are getting in the Asian market?

Yes. I must admit, I seem to speak too much about it. I think I speak about it because we get surprised by it, right? We don’t have – we have a big office in Europe, and we have made a lot of investments in Europe. So, when Europe goes we are like, okay, this is what we expected. I think Asia, we still have a very limited footprint, and we get surprised when we win there. What we have today, just to be clear, is we now have an operating team there. We have a sales team. We have a pre-sales team. We have – so we now have a full organization there. The problems in Asia are more acute. Every country has its own GAAP. Every country has its own regulatory reporting need. That’s not the case if you have an American client. If that’s American client, guess what, it’s all U.S. GAAP. It’s quite simple. The regulatory needs are understood. When you go to Asia, Thailand is different from Vietnam, which is different from China, which is different from India. Therefore, we believe that the need for a solution like ours is much stronger in Asia. That’s why we are somewhat more excited than the size of our business suggests.

The next question is from Gabriela Borges with Goldman Sachs. You may proceed.

Good afternoon. Congrats on the quarter. Sandeep, I’d love to follow up on your comments that you made in the past on perhaps the business enablement use cases that Clearwater really allows some of the asset manager customers. Give us a little color on what you are seeing in terms of willingness to invest? And specifically, the current play whether it can be tied to our front office business use case, is that allowing you to maybe tap into more budgets or happen to more greenlight projects than if you were solely viewed as an accounting tool? Thank you.

Yes. Thank you, Gabriela for that question. I really think it’s a really important question about why asset managers who are under some pressure you would agree on cost would sort of go out and sign up for Clearwater. And my – what I would like to tell you is that almost always, it is because it is seen as a growth enabler. Clearwater helps clients get deals because the reporting and the analytics that they can provide is superior. I think there are many software products which do that reporting well for a given asset class, many. I think there are many of which do for a given geography. The reason clients sort of continue to grow with us is we actually – Gabriela, we go into pitches with them. We will go do joint pitches with asset management clients when they bid on a book of business with a potential client. When you start to be seen as an enabler of growth, I think that changes who we are. Even the big Prism deal we announced in Europe, which was in excess in seven figures; they come to Clearwater because that’s what they are looking to achieve. So, I have always thought if you go back at 2022 and look at why we won, it is because of that. If you look at JP Morgan Asset Management, they come to us because we can generate the reports that they need to provide on time. That is attractive to them. So, if you think of the proposition not as just an accounting software, but as an enabler of growth, that’s why I think we get traction.

Thank you. That concludes the Q&A session. I would like to turn the call back over to the team for concluding remarks.

Look, I just want to thank everybody for your interest in our company. We are trying to build something special here, and we always appreciate just your engagement. Thank you all. I apologize this ran over just a little bit. Thank you.

This concludes today’s conference call. Thank you for joining. You may now disconnect.