Clearwater Analytics Holdings, Inc.CWAN
Clearwater Analytics Holdings, Inc. Stock Compensation Disclosure
Equity-Based Compensation
In September 2021, the Board of Directors of the Company (the “Board”) adopted the Clearwater Analytics Holdings, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”), pursuant to which employees, consultants and directors of our Company and our affiliates performing services for us, including our executive officers, are eligible to receive awards. The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards intended to align the interests of participants with those of our shareholders. A total of 57,197,804 shares of common stock are authorized for issuance under the 2021 Plan. In connection with the approval of the 2021 Plan, the 2017 Equity Incentive Plan (the “2017 Plan”) was terminated and all outstanding stock options and RSUs were transferred to the 2021 Plan.
On April 21, 2025, in connection with the Enfusion Acquisition, each outstanding restricted stock unit granted under the Enfusion 2021 Stock Option and Incentive Plan (the “Enfusion Plan”) was assumed by the Company and converted into a restricted stock unit of the Company. A total of 1.9 million RSUs were issued.
Options
The following table summarizes the stock option activity for the years ended December 31, 2025, 2024 and 2023 (in thousands, except per share data):
| Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Balance - December 31, 2022 | 17,754,770 | $ | 8.47 | 7.06 | $ | 183,315 | |||||||||||||||||
| Exercised | (3,016,765) | 6.90 | 33,792 | ||||||||||||||||||||
| Forfeited | (1,492,651) | 13.12 | |||||||||||||||||||||
| Balance - December 31, 2023 | 13,245,354 | $ | 8.31 | 6.65 | $ | 155,438 | |||||||||||||||||
| Exercised | (3,139,347) | 7.15 | 49,438 | ||||||||||||||||||||
| Forfeited | (591,266) | 12.58 | |||||||||||||||||||||
| Balance - December 31, 2024 | 9,514,741 | $ | 8.42 | 5.13 | $ | 181,714 | |||||||||||||||||
| Exercised | (1,955,194) | $ | 5.72 | $ | 35,852 | ||||||||||||||||||
| Forfeited | (12,317) | $ | 13.93 | ||||||||||||||||||||
| Balance - December 31, 2025 | 7,547,230 | $ | 9.11 | 4.33 | $ | 113,270 | |||||||||||||||||
| Options vested - December 31, 2025 | 7,515,230 | $ | 9.10 | $ | 112,895 | ||||||||||||||||||
No stock options were granted during the years ended December 31, 2025, 2024 and 2023. The aggregate intrinsic value disclosed in the above table is based on the difference between the exercise price of the stock option and the estimated fair value of the Company's common stock as of the respective period-end dates. As of December 31, 2025, the total unrecognized compensation expense related to unvested options is immaterial.
In general, options which vest over a four year period are subject to time-based vesting conditions based on continuous employment over the four year period:
Time-based vesting – 25% of the units awarded are eligible to vest on the first anniversary of employment, and 75% are subsequently eligible to vest on a monthly basis over the remaining three-year period, subject to continued employment.
RSUs
The summary of RSU activity is as follows (in thousands, except per share data):
| Units Activity | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value | |||||||||||||||
| Unvested units as of December 31, 2022 | 9,527,348 | $ | 18.32 | $ | 178,638 | ||||||||||||
| Granted | 7,421,772 | 18.70 | |||||||||||||||
| Released | (1,966,153) | 18.20 | |||||||||||||||
| Canceled | (1,262,830) | 17.60 | |||||||||||||||
| Unvested units as of December 31, 2023 | 13,720,137 | $ | 18.61 | $ | 278,519 | ||||||||||||
| Granted | 4,063,202 | 20.02 | |||||||||||||||
| Released | (4,394,452) | 18.62 | |||||||||||||||
| Canceled | (1,213,177) | 18.20 | |||||||||||||||
| Unvested units as of December 31, 2024 | 12,175,710 | $ | 19.12 | $ | 335,076 | ||||||||||||
| Granted | 7,426,566 | 21.57 | |||||||||||||||
| Released | (6,479,261) | 18.43 | |||||||||||||||
| Canceled | (1,222,125) | 19.02 | |||||||||||||||
| Unvested units as of December 31, 2025 | 11,900,890 | $ | 21.03 | $ | 287,049 | ||||||||||||
The aggregate intrinsic value disclosed in the above table is based on the closing stock price on the NYSE on December 31, 2025, 2024 and 2023. As of December 31, 2025, there was $152.9 million of unrecognized equity-based compensation expense related to RSUs, which is expected to be recognized over a weighted average period of 2.3 years.
In general, RSUs are either subject to time-based vesting conditions, or both time-based vesting conditions and performance-based vesting, in each case based on continuous employment of the employee.
Time-based vesting – units awarded are eligible to vest in substantially equal annual installments on each anniversary from the grant date over a four year period.
Performance-based vesting – units awarded are eligible to vest in equal three annual installments upon the achievement of annual targets tied to annual revenue growth. All terms of performance conditions are established on grant date.
Employee Stock Purchase Plan
In September 2021, the Board adopted the Clearwater Analytics Holdings, Inc. 2021 Employee Stock Purchase Plan (“ESPP”). As of December 31, 2025, a total of 6,914,977 shares of Class A common stock were available for issuance under the ESPP. The offering periods are scheduled to start on June 1 and December 1 of each year. Eligible employees may purchase the Company's common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six-month offering periods. An employee's payroll deductions under the ESPP are limited to 10% of the employee's compensation and an employee may not purchase more than $25,000 of stock during any calendar year in which the employee’s option to purchase stock under the ESPP is outstanding at any time.
On May 31, 2025, a total of 168,910 shares were issued to employees for the offering period ended May 31, 2025. On November 30, 2025, a total of 177,032 shares were issued to employees for the offering period ended November 30, 2025. As of December 31, 2025, total unrecognized equity-based compensation costs related to ESPP were $1.3 million, which is expected to be recognized over the remaining current offering period ending May 31, 2026.
On May 31, 2024, a total of 173,268 shares were issued to employees for the offering period ended May 31, 2024. On November 30, 2024, a total of 117,998 shares were issued to employees for the offering period ended November 30, 2024. As of December 31, 2024, total unrecognized equity-based compensation costs related to ESPP were $1.1 million, which is expected to be recognized over the remaining current offering period ending May 31, 2025.
On May 31, 2023, a total of 189,390 shares were issued to employees for the offering period ended May 31, 2023. On November 30, 2023, a total of 147,792 shares were issued to employees for the offering period ended November 30, 2023. As of December 31, 2023, total unrecognized equity-based compensation costs related to ESPP were $0.7 million, which is expected to be recognized over the remaining current offering period ending May 31, 2024.
ESPP payroll contributions accrued at December 31, 2025 and 2024 totaled $0.8 million and $0.5 million, respectively, and are included within accrued expenses in the consolidated balance sheets. Employee payroll contributions used to purchase shares under the ESPP will be reclassified to stockholders' equity at the end of the offering period.
The fair value of the purchase right for the ESPP is estimated on the date of grant using the Black-Scholes model with the following assumptions for the year ended December 31, 2025:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Expected volatility | 40.5 - 41.6% | 26.5 - 42.6% | 26.5 - 52.8% | ||||||||||||||
| Risk-free interest rate | 3.8 - 4.3% | 4.4 - 5.4% | 4.6 - 5.4% | ||||||||||||||
| Expected term (years) | 0.5 | 0.5 | 0.5 | ||||||||||||||
Share Repurchase Program
In August 2025, the Board of Directors authorized a program to repurchase up to $100.0 million of the Company’s Class A common stock (the “Share Repurchase Program”). The Share Repurchase Program does not have a fixed expiration date and does not obligate the Company to acquire any specific number of shares. The timing, quantity and price of any share repurchase may vary. Shares may be repurchased through open market purchases or privately negotiated transactions, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. As of November 7, 2025, we suspended repurchase activity under this program in contemplation of the Merger detailed in Note 19 “Subsequent Events”.
During the year ended December 31, 2025, the Company repurchased and subsequently retired 966,603 shares of Class A common stock for $18.1 million. All repurchases were made in open market transactions. As of December 31, 2025, $81.9 million of the Company’s Class A common stock remained available and authorized for repurchases under the Share Repurchase Program.
The Company records repurchases of its shares of common stock on the trade date of each transaction. Shares purchased and retired are deducted to the extent of their par value from common stock and from additional paid-in capital for the excess over par value. Direct costs incurred to acquire the shares are included in the total cost of the shares purchased. Repurchases that are executed and unpaid are included in accrued expenses and other current liabilities on our consolidated balance sheets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 3, 2023 | |
| 2021 | Mar 16, 2022 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.