Good evening. Thank you for attending today's Clearwater Analytics Fourth Quarter and Full-Year 2021 Earnings Conference Call. My name is Selena, and I will be your moderator. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end, if you'd like to ask a question, . I would now like to pass the conference over to our host, JR. Ritchie, Head of Investor Relations. Please go ahead.

Thank you, and welcome, everyone, to Clearwater Analytics fourth quarter 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 up to a question-and-answer session. I'd like to remind all participants that during this conference call, any forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Expression of future goals, including business outlook, expectation for future financial performance and similar item, 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 the conference call, except as required by law. For more information, please refer to the cautionary statements included in our earnings press release. Lastly, all metrics discussed in this call are non-GAAP, unless otherwise noted. A reconciliation can be found in the earnings press release that we have posted to our Investor Relations website. With that, I'll turn the call over to our Chief Executive Officer, Sandeep Sahai.

Thank you, JR, and welcome everyone and thank you all for your continued interest in Clearwater. We finished 2021, strong revenue for Q4 was 69.8 million, which constitutes a year-on-year growth of 27%. For the full-year, revenue grew 24%, which is a very nice re-acceleration to our historic growth rates. Gross revenue retention remains consistently strong at 98%. And I'm very happy to note that our net revenue retention increased to a 111% in Q4, up 210 basis points year-over-year. We have continued to execute well, resulting in a gross margin of 75.5%, which in turn helped drive strong profitability in the quarter. We added 97 net new clients last year, and approximately 45% of them left to legacy competitor to move to our platform. Some who were on a legacy platform for over a decade or more, while others barely finished implementations just a few years back. We also won across the spectrum of clients. We now have 59 clients within the auto of at least $1 million. I would be remiss if I did not acknowledge another very significant win for us in Europe in the fourth quarter. Athora is a leading, fast-growing, and acquisitive European insurer that has assets across many countries in Europe and we're delighted to welcome them to the Clearwater platform. To understand this continued transition to Clearwater I would like to talk about the value we bring to our customers. Simply put, Clearwater provides clients with a comprehensive, reconciled view of the global portfolio every day while trying to invest in a wide variety of asset classes across many geographies and have reporting requirements across multiple regulatory regimes around the world. Providing a comprehensive view is a complex endeavor. Single clients can have investments in 60 different asset classes, 40 different currencies, and…

Thanks, Sandeep. And thank all of you for joining us today. We are very pleased with what can only be described as stellar financial performance for both the fourth quarter and full year. The fourth quarter exceeded our guidance for revenue and adjusted EBITDA margin on the strength of continued robust client demand, as well as an acceleration of client on-boarding activity. As for my specific remarks today, I'll start with a review of our financial results for the fourth quarter and full year 2021, then wrap up with guidance for the first quarter, as well as full year 2022. Before detailing our core financial results, I'll first address two items impacting the year-over-year comparability of our fourth-quarter. First, you will notice that we recorded at $49 million one-time recapitalization compensation expense charge in the fourth quarter of 2020. During November 2020, we completed a recapitalization transaction on behalf of the existing unitholders at that time. The transaction allowed these existing unitholders to sell their units to new investors. In connection with the transaction, selling unitholders contributed $49 million towards bonuses paid to employees and related payroll taxes. Next, following the completion of a comprehensive review of sales tax reporting obligations across multiple jurisdictions in late 2020, we recorded a provision of $9.1 million to cover historical sales tax liabilities in many states, all of which was recorded in general and administrative expense in the fourth quarter of 2020. Throughout 2021, we began collecting and remitting sales tax to jurisdictions on behalf of our customers, contacting existing customers, and executing voluntary disclosure agreements across many state jurisdictions. Some customers were able to prove usage outside of the taxing jurisdiction, ultimately leading to a $2.0 million reduction in this outstanding liability during the fourth quarter of 2021. Without the benefit of…

Thank you, Jim. As you can see, we continue to run a strong, disciplined, crew of 50 plus company. We are proud of the many achievements we made throughout 2021, including ending Q4 on a strong note and going public in Q3 without letting the process slow our business. We believe that we have a disruptive platform in an industry that is right for change. And we plan to methodically march down the three parts of growth that we have outlined. We're looking forward to 2022, continuing to execute, continuing to delight our customers, and continuing to build a special company that all of us are proud to call our own. With that, let me turn it over to the operator for questions.

Thank you. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The first question comes from Kevin McVeigh with Credit Suisse. Please proceed.

Thank you so much, and congratulations. Really, really exceptional results. I guess, Sandeep or Jim, in terms of the 2022 guidance, can you help us understand what type of AUM is embedded in that? And I know it's probably difficult, but is there any way to think about what type of interest rate assumptions are in there just because it sounds like you're getting that question a little bit in terms of what type of rate assumptions are factored into the guidance.

Sure, Kevin, thanks. This is Jim. Let me just start with Q1, regarding the 23% revenue growth. And we're actually picking a single point, $70 million for Q1, which is unusual. That's the acknowledgment that we're further into the quarter and our confidence levels are naturally higher. The full-year guide to 302 to 304 I think is $7 million more than the street consensus for 2022 at the midpoint there. and it's totally consistent with our growth rate of being greater than a 20% grower. You reference interest rates, but that's one of really just a totally handful of things that you make these really unusual times. We have the invasion in Ukraine, volatility in equity and commodity markets, inflationary pressures, as well as the 25-basis-point change in the interest rates and let's not forget about COVID, who thought that would drop off the list. So the macro environment's pretty difficult to read, two or three quarters into the future, and so we really wanted to stand by guidance that we could stand behind in light of that uncertainty. And so when you think about that AUM, and remember, we have a variety of minimums and things within our contracts. We've really looked at that guidance and contemplated what we see within our business model and our pipeline today. And today, we have not seen changes that business model or platform. So we would expect they continue the AUM growth that we've seen through adding new customers, growing with our existing customers, and doing more for our clients as we roll forward. I guess the last thing I'd say is when you think about like this is -- please go ahead, Sandeep.

No, please go ahead.

Please.

What I was going to say, Kevin, was if you got a client fees, is the whole investment strategy revolves around protecting the asset pool driven that for the think. And so traditionally we've had very low one utility. And you may recall during the IPO Roadshow, I think, we had gone through the 2020 what happened, which was frankly a big disruption at that time. But the impact on our assets under management was minimal and interest rates started the chain of the expectations that being started to change in November of last year. And we launched it expecting big change in our system and didn't see it. We continue to watch it. But like Jim said, we just don't notice it, and clients are moving assets a little bit, and we sort of see whether they're moving it. But the volatility continues to be really low.

And I would almost think, Sandeep, given that kind of full lens you have across the platforms, it's probably going accelerate the demand for what you're providing, if we do see some incremental volatility. We're thinking about that, right?

Yeah, I give you one more thing, Kevin, if you think about it. Whenever there's uncertainty, favorable cost base, right? And that accelerates movements to cloud, movement to managed services, and things of that ilk, because that's really what you'd want if you were the user on the other side, right?

I totally agree. Thanks so much. Great job.

Thanks.

Thank you, Kevin. The next question comes from Michael Turrin with Wells Fargo. Please proceed.

Michael, are you on mute?

Hello?

Michael, are you there?

We can hear you, go ahead.

We can hear you now.

This is Michael Berdock for Michael Turrin. Congrats again on a fantastic end to the year and first couple of strong quarters of the public company. One thing I want to try and double-click on is if you -- looking at the numbers from guidance and your color commentary on expenses in fiscal '22 makes it seem like a pretty sizable step-up in sales and marketing expense, is there anything in particular you're investing for, you mentioned customer on-boarding, but any geos or verticals to think about for your investing in sales and marketing, and can we think about that potentially driving higher growth above the 20% level maybe for it.

Sure, Michael, that's -- go ahead, Sandeep.

We did. This is the last time we're both doing this? Yes, totally agree. So we feel really good about the opportunities we have and so as you think about where are we investing? We last year, we continue to accelerate our investments internationally. We saw great returns on that so we continue to lean in as we mentioned in the prepared remarks, we had the leadership teams in place and we'll be able to drive those teams throughout the year and will continue to build there. We also are leaning in on our marketing spend. We have a great new CMO and she's doing a great job, and we have the event in London for our European clients in April of this year and we're going to lean in on unrelated marketing spend that we have throughout here. We also obviously, have done a bunch of investment throughout 2021 to build out those teams. So part of that expansion year-over-year is nearly the annualization of those times.

I'll just add a few more things, Michael, to that. One is the investment obviously is consistent with the Q4 levels. When we spoke to you all in Q2 -- Q3 actually, if you remember, we said we're going to invest more in the operation side one more time. And frankly, you saw back. So you saw in Q4 those numbers are really good. I do also just want to just quickly mention that a lot of these offices we set up in continental Europe and in Asia still have to blossom fully. It's not like we are contributing very much of the 2021 growth because they were set up in the May, June, July time frame of last year. So we expect them to contribute to growth in '22 and definitely contribute to growth in 2023. So we still feel there's 13%, 14% investment in sales and marketing, I think is good. We continue to believe that we can manage EBITDA at the levels we would like. Why are we making that investment? Also because gross margin is steady, so why not?

Got it. Thank you. And one quick follow-up. Did you quantify the number of quota carrying reps and if not, could you?

We have not historically disclosed that. So we'll probably --

Michael, I should tell you lots of money being spent on it. Good Lord, I look at that answer, oh my God. We're adding a number of choosers and some build-up to obviously be effectively on-boarded and contribute to growth, so we look forward to them doing that in '22, and like I said, have a much larger impact in '23.

Great. Thank you. And congrats again.

Thank you, Mike.

Thank you. The next question comes from Jackson Ader with JPMorgan. Please proceed.

Hey, guys. Thanks for taking our questions. I want to ask about the on-boarding investments that you made. I'm just curious, because I think a lot of times you sign a customer and you will run Clearwater in parallel for some pilot time-frame next to their Legacy systems. And I'm curious, do the on-boarding investments try to drive faster time to that parallel running, or were they trying to shorten the amount of time that that pilot period would last? I'm just trying to get the sustainability here of that on-boarding tailwind to growth.

Jackson, this is Sandeep. Thanks for your question. I think when you think about on-boarding, the first thing is you can't cheat time. You can get things on-boarded really quickly and yet you have to do the pattern alone to be confident about the role of the system worldwide. So you can't cheat that time. Secondarily though, if you don't build a really solid organization, linear ability to execute around the world for us, and as you know, we want some deals a little bit ahead of time. We'd like to sort in Asia and in Europe. That's the deal Jim was talking about building out. Today if we get programs and projects literally anywhere in Europe and in Asia, I think we can execute them and we can execute them with speed. So are we trying to become a little bit more efficient, incrementally? Yes, that's always the case. But do we now have leadership which knows how to execute very large programs? And the answer is yes. We now have leadership at the -most level, at the next level, and those have been built out. They've been in the organization for reasonable periods of time that we feel a lot more confident about programs of any size, like the Athora. I mean, we send out a press release and have seen about Athora. It's a really significant win in Europe, and we feel completely comfortable that we can implement that. Jim, anything you would add to that?

Got you. Okay. Okay. All right, great. And then just a quick follow-up. Is there any seasonality and market that we should think about in terms of RFP cycles? Is it just your typical fourth quarter which tends to be the heaviest or is there anything we should be thinking about as we head into '22 on replacement cycle?

Not familiar really diligently as no real reach them to do it at a certain time or not. Right? I do think all of these, I'm not quite sure I can point to any seasonality about decision-making. I don't know with you.

The only thing I would caveat Sandeep for that is using the natural thing that happens across a lot of software in SaaS business is Europe in the third quarter gets a little quieter. And then, because we're doing accounting and people are moving out over on the on boarding process. There's also people like clean years. And so, that were, we've been able to kind of manage through that process. People who want to full-year update on the platform.

Jackson, you're still talking about we're talking about is the quality is not the revenue because the revenue sort of follows, right. So, it's not like Q4 will naturally have higher revenue. That's not the case.

Right. Right. Yes. I was talking about like deal flow and bookings, contracts. Okay. Thank you.

Thank you Jackson.

Thank you, Jackson. The next question comes from Bhavan Suri with William Blair. Please proceed.

Hey, guys, can you hear me okay?

We can. Loud and clear.

Great. Loud and clear. Congratulations. Great set of results and certain to say about the outlook here. I guess I wanted to touch a little bit on your product side here. You've obviously had, regarding the new CGO a little bit -- a little while ago, as you think about Souvik and you think about the AI and machine learning we've discussed in the past. I'm not getting a sense how keen you were thinking about the potential leverage, some of the AI ML capabilities to gain additional insights from the assets on the platform. Can you talk a little bit of the longer-term plans now with these intended about what you could do with the data and the assets and platforms to drive additional product sets?

Favorite question all night, thank you, Bhavan. It's almost like I called you before this just really. I think -- to be thinking -- no, no. we're thrilled with bringing on Jody Kochansky showing us. They bring really complementary scale. There is a in the market and the industry, there is little Jody didn't quite understand. He does, he's been there for long time, and surely comes from a really strong technology background. And again, in terms of scale, in terms of machine-learning, AI, RPA, those kind of things, and how to really get value from them. So we are really excited about what we're doing here. The one big area, of course, is insights. So what do clients want? They want insights from their data and I just have to say that we're continuing to make really good progress, but one of the biggest ways you get insight, Bhavan, is to bring all the data together in a normalized way and that's why you see Jim and me pushing so much on Prism, because what Prism does is, is on Clearwater, that's easy. But then people have other systems in other countries or there's something else for real estate, there's something else for derivatives perhaps and so what Prism does it brings all of it together and that starts the insights. But I do think that Clearwater's value gets very enhanced, while can get insights into our doable global portfolio. So we continue to contribute or sort of invest in that. And we contribute, do so for all of this year, next year.

Got you.

Let me give you one example.

Yeah, of course.

Sorry. I was just going to give you a little example of like bringing this data together all into one place. I'll give you an example. So on Monday, we asked the data science team what's our exposure to Russian securities? Because we thought maybe someone might ask a question about that. And they were able to come back to us and say, oh, it's 0.03% our securities that are either embodied through the security master in Russia or denominated in Ruple. Try and understand that. So you think about that. That's across the $5.9 trillion in assets on the platform. You can figure those things out. Just turning that one out, that was ad hoc. But that's the benefit of, to your point, talking about what's the opportunity for those insights. That's one little quick example that we went through.

That was actually very helpful. I wasn't going to ask that question, but thank you for answering it and I'm sure someone had. Let's touch on competition really quickly. Just any update in that environment? Is it still status quo? I guess who do you see most in ? Maybe some of win rates would be helpful.

I think you were asking all the questions, so I think we think about -- but I just have to say, if you look at wind rates, just look at the mathematics profits and the analytics, are we really Zane steady at the 80% mark. And this is once a proposal gets written, and how many of those do we win, it's 80%, has been 80% percent for a period of time. It wasn't true for Europe earlier, and now that is true for Europe. So that is one thing. We continue to see -- we're not under the radar anymore, that's obvious. For the last 2, 3 years, I think everywhere we go, there is some competitive pressure about the legacy provider fighting back and that happens very often or applying through an RFP, but there are enough times the clients don't do an RFP, and simply move ahead with Tier-1. So I don't -- we are not seeing any change in any of these sectors in terms of win rates. Now, our job I think is, Bhavan, that 24% of our revenue, we're going to continue to put into R&D, and we want to continue to be more comprehensive. We want to continue to be more comprehensive in asset classes, in countries, in accounting basis. So I'll hold agenda and we heavily continue to push, continue to advance, continue to innovate. And literally as of last month, end of Feb, we haven't seen any competitive wind rate degradation.

Jacek outlets, great guys. Thanks for taking my questions. Thanks for the detailed depth and congratulations.

Thank you.

Thank you, Bhavan. The next question comes from Gabriela Borges with Goldman Sachs. Please proceed.

Good afternoon and thanks for taking my question and congrats on the quarter and wanted to follow-up on the commentary on NRR and specifically NRR in the after magic phase. And then of course we talked about how asset margin is therefore full since signing more firm season lab mix motion, but it sounds like the key things happening not only is asset managers getting figure as a potential sale flea, but it sounds like NRR within asset managers results and serving. So we would love if you could just talk a little bit about what you're seeing and any updated thoughts and higher thinking about modularizing the products, Zach. Thank you.

Hey Gabriela, thank you for the question. Look, I think certainly my remarks were quite excited about these 210 basis point increase in the NRR. So if you think about NRR and why that grew -- so lets talk about each segment. So strategic asset managers just continue to grow with us. As we know that is more of a land and expand strategy, and so the growth happens because of one of two reasons. One is generally growth , that gives you a gentle thing when that's one thing. Second one is, definitely clients are picking into us, into more divisions of the business. As you know, some of these asset managers, broadly speaking, if you call them asset managers, they breed these lines of businesses, expense, . They have all kinds of business functions and so we continue to see growth in that. That's one. The second one that we have, which is very interesting is insurance companies definitely have become more acquisitive. And so Clearwater wins even higher proportion of those, because if you buy -- if you're a U.S. based insurance company and you buy assets in Germany, and Taiwan that reporting is not clear what you would have to build design all of it. Think about all of it, and it will be hard. And Clearwater can just simply turn it on. Obviously doesn't mean it's back quick, but the from exists right off the bat. So we're starting to see NRR growth come from insurance clients as much as we see from us as managers. Having said that, asset managing are meaningfully bigger side, I don't want to equate them. But we continue -- this bump up it will still happened because of insurance clients also buying tools of assets around the world. Jim, would you add into convention.

Yeah. And I think Gabriela you are correct. This is myth. That is a phenomenon that we saw about throughout 2021 to help it them.

That's helpful

you are right. Sorry, I didn't mean -- when we were on the road initially in the IPO, we really did talk about strategic asset management. And this is just as important for global insurance companies who have aspirations to acquiring growth as well.

Got it. That's helpful. Thank you. And as a follow-up, you have a comment in the press release on Odyssey, more than a 100 new clients, nearly 45% left to Legacy competitor. Maybe ground that for us relative to history. How does that 45% compare to a year ago, five years ago? And then the remaining 55% of that, give us a little bit of color on mostly for new customers that are not leaving behind Legacy, better. Is that the money in parallel, a little more or less? Thank you.

Thank you for the question. So look, I do think we have had this half and half sort of way long time. If I didn't like it, right, maybe you get 11% growth from current clients and that's sort of a good situation to be. So the question is if we get 45% from new logos and legacy competitors, then what was the rest of the 55 doing before that? Right and where did they come from? So several of them, one is Asturias, right? So they were getting their accounting from custodians for certain asset class; and another custodian for another asset class. And so they had multiple custodians doing the accounting for them in the transition to Clearwater. So that's one. People have internal systems, so if that happens quite a bit, is that people have just built data warehouses, if you will, to pull all that information and provide some level of reporting there. So that also happens quite a bit. And then, if there's some movement from Excel? Yeah. Believe it or not, especially on the lower end of the segment, people continue to use Excel and really giant Excel macros, and so people transition from that. So I think custodians, internal systems, excel, are the three where you would normally see the other 50% or 55% of logos come from.

And then the last piece within that is really, truly the Greenfield. So these are people who are now investing for the first time. So those IPO companies or someone decides to actually take a different approach in their investment philosophy around our excess cash for corporations, etc.

That makes sense. Thank you.

Thank you, Gabriela.

Thank you, Gabriela. The next question comes from James Faucette with Morgan Stanley. Please proceed.

Thanks a lot. Wanted to -- you talked a lot about grumbling with and growing internationally and international capabilities, etc. I'm wondering if you can talk a little bit about how you're expecting from that the contribution from international to grow. It seems like roughly international still is contributing less than 10% of revenue, but even Europe itself has probably 40% of TAM. So how do you -- how should we think about the international mix and should we expect it to develop first from Europe or Asia or what that composition is likely to look like.

go ahead Sandeep.

No, you should. Please.

Sure. So you're accurate that the revenues as a percentage of revenues, because that has 20 years of business involved in it. It's less than 10%. But this last year, as a percentage of our new business, it's 20%. Obviously, James, you're right; it's accelerating and we're seeing the returns from the focus and then I think long term, when you think of tam being 40%, that you would see long term that your contributions over time would ultimately move to the relative ratio of your overall total addressable market.

Jim, if I could just add something

The best news that I think we've learned this year is that the needs in Europe, and I think we've learned to a lesser extent that we've also learned in Asia, those needs are consistent with the needs in North America. And so the same drivers that we see, I think we have a lot of conviction around that and so we think that has really great opportunities. Sorry. Sandeep, I'll let you.

Narrow know is going to add James for exactly the point you made Jim is that. If you look at our larger triants, they already have assets around the work. But just not like you'd look at our larger clients and it only investing in the United States and North America will be investing in Europe, investing in Asia already. We've always had a need for the acquire for us. If you look at all of the reporting in continental Europe. All of those have already been built for quite a while back. Now, does that mean we don't have anyone, of course we do. So we just release touch cap for example, and we didn't have done chapel here in high gap. And could we do not high gap low-tier. So I think there's work to be done, but the needs are exactly the same, if not more acute. And that's because when you think about North America, at least it's all one Virginia, if you will, right? But you go to Europe and we got German GAAP and that's happened, but every GAAP a little bit different. And then when you think about Asia, then the need is even more acute because Japanese GAAP and , almost nothing in common, right? Things are really different. So we think the need is more acute on that side. But it takes time though James, it takes time to build it out. And we're going through it very purposefully, we've built out offices, we built out pre -sales capability, delivery capability, locally and otherwise. And so it's a bit of a March.

That makes sense and I guess kind of along similar lines, it seems like at least your Horizon 2 initiatives, particularly as expansion into adjacent end markets in APAC have gained traction earlier than anticipated, or at least earlier than we had anticipated, especially in Asia. While that opportunity was categorized as medium-term in the IPO process, are you now dole tracking those initiatives in a sense, and is that part of where you're -- we should think about the incremental investment going in '22?

I think in 2022, James, you will see a full slides of offer are being setup. It has been set up in each of these locations. Are we going after, for example, street local government? We have a dedicated team which have been working on this for the last 6, 7, 8 months. So I do expect all of these brides into, if you will, to be fully funded and fully working today -- they're working today. Now for the contribution we really hire in '22, probably not, but will they be really significantly in '22, that's our expectation. And so we're not -- we are doing tracking exactly like you laid out. And you see the increase in sales and marketing costs as the result of that, and just that we have EBITDA, we have the growth, and we want to push while maintaining EBITDA, so we don't want it to go down further, but we want to use the growth dollars, if you will, to drive for the goods as we did in Q4. Q4 was a good testimony and we got excited because of that.

That's great. Thanks a lot.

Thank you.

Thank you, James. The next question comes from Rishi Jaluria with RBC Capital Markets. Please proceed.

, nice to see acceleration in the quarter. Two questions I wanted to ask, quick ones. First on gross margins. Maybe, can you talk about the longer term opportunity to see a gross margin expansion in the model. And second, just wanted to maybe philosophically understand how we should be thinking about your philosophy or attitude towards a stock-based compensation, right? Because based on the guidance, SBC is going to go rise to the mid-20s and we're going to see a decent amount of dilution, not unusual per software, but definitely seems like a departure I think from what we may have been expecting. Can you maybe walk us through how you're thinking about SBC and how we should be thinking about that long term? Thanks.

Sure. So just to start on gross margin, it's something that Sandeep and I focus on a lot and nothing has changed from the way we feel about the long-term opportunity there. It's an 80% gross margin business. That's a very healthy SaaS businesses. It's an 80% plus gross margin business. And we see that. Having said that, that's not the priority. We're building out globally. We're building out the infrastructure and so that's why we are staying consistent at the 75.5%, which is just healthy. As this relates to SBC, I would say that if you look at Q4, the run rate on Q4 was $70 million, so actually 66 is coming down. And the reason why it's coming down is because there's a lot of historical charges. I referenced the recapitalization transaction in Q4 of 2020. That had an impact on revaluing a bunch of options for stock-based compensation purposes, which really has no economic impact and you will see that taper off over a number of years as those amortized. I think we have a philosophy -- I'll let Sandeep speak to the philosophy that we have, but I would say that the nice thing about being a public company as we've been able to expand the pool of employees that are availed equity and I think that that has been very useful in those attracting and retaining employees. And so I think that that has been a great tool, but I would say that we guided to that just so that everyone would know that. But I think there are some historical elements to it that will run out over time. Back to Sandeep.

Really two, three things. One is the talent we are looking for on the tech side is leading edge, if you will, sometime right? And there is a bit of a war for that talent. And what we do is we methodically work with compensation consultants, and so look at these 20 companies or so who are in our space, right? Who sort of divide software of the kind we do. And we will stay very much within that lane. There is nothing extraordinary we feel we want to do or need to do to attract thousands. So we go back and look at these companies and see what they do, how much they -- what are issues that provide people and don't. And we try and, like I said, stay very much within that lane. We don't find the need to do anything extraordinary there, right? So at this point 100% of people in the company have a use and we feel it's nice and sticky, it helps talent, that helps in attracting talent and that's our thinking there. I wish there was something more revolutionary here, there isn't. Our thinking is look at what our competition does, and sort of stay within the lane there.

That's really helpful. Thank you so much guys.

Thank you, Rishi.

Thank you, Rishi. The next question comes from Yun Kim with Loop Capital. Please proceed.

All right. Thank you. Congrats, Sandeep and Jim, on a very strong finish to the year. Have you continued to make progress on the international front? What are you seeing in terms of the overall land and expand motion there? Are you seeing perhaps maybe smaller initial land deal size for just the U.S. and maybe faster expansion velocity afterwards? Thanks.

Thank you for the question. I will point out two things. One is, when Jim said 20% of new business came from Europe, this noise, it is only new business, so it is actually more -- it is definitely more impressive when you think about that. Now, ordinarily when you go to a market, you would think of doing small deals and bigger deals and bigger deals. But we have -- we talked about the leadership of Guide 3. The views in one is significant. We did the press release . That was a significant deal. We did a press release on Egon, I think early in the year. Those are not small deals at all. And so we continue to see traction with very large clients there. Is it a little bit surprising? Perhaps, but we continue to see very significant . If we look at the

The other question that I have is whether or not you can talk about one particular industry, maybe that's asset manager or insurance that is growing faster than your expectations for just a couple of quarters ago. Any meaningful motivational pricing trend that you're seeing in any particular vertical.

Jim, I don't agree with your comment, the pricing specifically don't. So we're able to price what we think is appropriate, and I think as you said, we price a little bit to trying to get to 80% steady-state, and we can achieve that and we haven't seen push on that. So we continue to be able to get this growth rate while continuing to get the right and appropriate gross margin rate. So should we continue to see that. Jim, would you have anything else to add or?

Yeah. I think that that's -- I think it's really the same story. Obviously, we're growing really nicely in insurance, and state and local government has grown really fast off of a much smaller number, and asset management has really continued to grow, that was growing faster when we went public and continues to grow very quickly. It's good news across all those.

Good to hear it. Thank you so much.

Thank you, Mr Kim.

So J.R. Is that our last question?

Yes, that's our last question. Sandeep, if you want to just give a quick closing remarks.

For I was just Sandeep before we do that, I just have one administrative thing to share with everybody is just just our lock-up releases Monday from the IPO. Just wanted to share that at some that was in an 8-K. Go ahead.

Another you I just want to thank all of you clearly, from the questions you all understand our business and we're really happy about that because it allows us to be very transparent about what we're doing and why we're doing it. l hope you continue to support here, I want to thank you all for your questions and we really appreciate it. Thank you.

That concludes for Clearwater Analytics fourth quarter and full-year 2021 earnings conference call. Thank you for your participation, you may now disconnect your line.