Abstract
Clearwater Analytics Holdings, Inc. will report quarterly results on February 18, 2026 Post Market, and this preview synthesizes last quarter’s performance alongside current-quarter consensus for revenue, margins, and earnings per share, while incorporating recent institutional ratings and transaction developments to frame the key drivers for the upcoming print.
Market Forecast
Consensus for the current quarter points to revenue of $216.66 million, an 80.10% year-over-year increase, with EBIT estimated at $66.95 million, up 81.69% year-over-year, and adjusted EPS projected at $0.15, up 32.57% year-over-year. Margin forecasts are not broadly published, but the company’s historical profile of high gross margin and a recent GAAP net loss frame the expected mix of growth scale-up and ongoing operating investment, with investors looking for clearer signals on near-term operating leverage.
The primary commercial engine remains the core Clearwater platform that consolidates investment data and reporting across large client estates, with performance last quarter supported by a 65.56% gross margin and outperformance versus revenue expectations. The most promising growth vector in the near term appears to be large-enterprise European deployments—highlighted by a new multi-year onboarding in Germany—layered on top of the 80.10% year-over-year revenue growth outlook; while revenue attribution by region or sub-product is not separately disclosed, this cohort should begin contributing to implementation and subscription revenue within the forecast period.
Last Quarter Review
In the previous quarter, Clearwater Analytics Holdings, Inc. delivered revenue of $205.11 million, a 77.08% year-over-year increase, generated a 65.56% gross profit margin, reported a GAAP net loss attributable to the company of $10.34 million with a net profit margin of -5.04%, and posted adjusted EPS of $0.14, up 16.67% year-over-year. Revenue exceeded consensus by $1.46 million, while adjusted EPS was approximately $0.01 below expectations.
A notable financial highlight was EBIT of $70.73 million, which increased 84.49% year-over-year and surpassed expectations by $14.82 million, suggesting meaningful operating scale even as GAAP profitability remains constrained by investment and non-operating items. On the commercial front, the core platform’s scale-up continued to underpin top-line momentum, with total revenue of $205.11 million rising 77.08% year-over-year and reflecting broad demand across the company’s consolidated client workflows.
Current Quarter Outlook
Core Platform Revenue Trajectory and Earnings Sensitivities
Clearwater Analytics Holdings, Inc.’s current-quarter revenue is projected at $216.66 million, up 80.10% year-over-year, indicating that the company’s core platform remains on a rapid scaling path. The adjusted EPS estimate of $0.15, up 32.57% year-over-year, coupled with an EBIT forecast of $66.95 million, up 81.69%, suggests that operating leverage remains a tangible opportunity, though the mix of implementation, ongoing client expansion, and expense timing could influence incremental margins. The company exited the last quarter with a 65.56% gross margin, buttressing the case for continued scaling of contribution margin as service delivery and platform utilization ramp across larger client estates.
Despite the high gross margin profile, the prior-quarter GAAP net loss of $10.34 million and net margin of -5.04% indicate that non-GAAP improvements are still working through below-the-line items and investment cadence. The path to GAAP profitability will be watched closely this quarter, particularly if management signals sustained expense normalization against the growth envelope. Investors will also parse the relationship between top-line trajectory and adjusted earnings growth, mindful that last quarter’s revenue exceeded expectations while adjusted EPS missed by roughly $0.01—an indication that cost timing, stock-based compensation, or other non-operating factors may remain relevant in the short term.
Given the revenue scale implied by consensus, the quarter may pivot on whether the company can convert robust bookings and implementations into in-quarter revenue recognition while maintaining or expanding gross margins. Any qualitative commentary on client retention, wallet expansion, or cross-sell could set the tone for the next few quarters of net expansion and EPS cadence. With EBIT expected to be strong on a year-over-year basis, the equity story may benefit if GAAP profitability inflects meaningfully or if management guides to a clearer bridge from EBIT growth to adjusted EPS and GAAP net results.
European Enterprise Deployments and Near‑Term Contribution
Recent updates point to a multi-year enterprise onboarding in Germany, a development that should support both implementation and future subscription revenue as the client ramps. This type of deployment typically begins with process standardization, integration work, and data migration before settling into normalized subscription usage, creating a two-stage revenue pattern: near-term services or implementation contributions followed by recurring expansion as additional modules and workflows come online. In the context of current-quarter expectations, investors will look for signs that European onboarding cycles are translating into recognized revenue within the period while also building visibility into annualized revenue contribution across the next year.
The quarter’s narrative may also hinge on the cadence of cross-organizational rollouts and governance timelines within large enterprises. If initial phases hit milestones on schedule, the company could demonstrate a stronger alignment between bookings momentum and recognized revenue, adding confidence to the 80.10% year-over-year revenue growth projection. Management’s commentary on regional go-live dates, utilization pacing, and the balance between implementation services and recurring subscriptions will be useful markers for understanding how quickly recent wins translate into margin-accretive revenue.
Execution in multi-entity European clients can also have implications for resource allocation and short-term expense levels. If staffing costs and delivery investments are weighted toward earlier phases of a rollout, consolidated gross margin could see modest variability even while long-term unit economics remain attractive. The equity market will likely focus on whether the company can maintain its high gross margin profile in the midst of these deployments, as this will shape the extent to which the strong top-line outlook converts into sustained EBIT and EPS expansion.
What Could Move the Stock This Quarter
Three themes appear most likely to drive the stock reaction around the print: revenue growth durability at scale, signals on GAAP profitability, and management’s guide for the near-term margin trajectory. A revenue outcome close to or ahead of the $216.66 million consensus, paired with a constructive view on forward billings and expansions, would reinforce the top-line narrative and may outweigh mixed signals from last quarter’s small revenue beat but EPS shortfall. Conversely, if adjusted EPS again trails expectations while revenue meets or beats, investors may recalibrate toward a more cautious stance on near-term operating leverage.
GAAP profitability will be a second focal point. The prior quarter’s net margin of -5.04% highlights the gap that remains between the non-GAAP and GAAP views of earnings strength, and a narrower GAAP loss—or a path toward break-even—would likely be taken positively. Commentary that ties cost discipline, stock-based compensation trends, and efficiency improvements to the trajectory of GAAP earnings could reduce uncertainty and buffer reactions to any transient expense spikes related to client implementations or product enhancements.
Finally, guidance strategy and qualitative color on capital deployment will shape the setup for the next few quarters. Explicit targets or qualitative guardrails on gross margin and operating margin can help the market extrapolate the pace at which EBIT strength manifests in EPS and GAAP net income. Any granular disclosures on the timing and magnitude of revenue from large new deployments—especially in Europe—would improve visibility on quarterly variability and may help investors assess whether current consensus already embeds a conservative or optimistic stance on contribution timing. The combination of revenue trajectory, margin signals, and guidance philosophy thus forms the core of the short-term stock thesis into and out of the event.
Analyst Opinions
Within the January 1, 2026 to February 11, 2026 window, the balance of institutional commentary skews cautious: two noted institutions moved to more neutral stances and no upgrades were recorded in the same period, indicating a majority bearish-to-cautious bias heading into the February 18, 2026 event. Specifically, Wells Fargo shifted its view to Equalweight with a $24.55 price target on January 8, 2026, citing a more balanced risk-reward, and UBS followed on January 26, 2026 by downgrading to Neutral with a $24.55 price target. With no offsetting upgrades in this window, the ratio is tilted toward caution, and the prevailing framing emphasizes execution proof points on growth durability and a clearer pathway to profitability.
The rationale behind this cautious tone appears consistent with the company’s recent financial pattern: while revenue has repeatedly scaled—with last quarter’s $205.11 million up 77.08% year-over-year and the current consensus calling for an 80.10% increase—the GAAP net loss of $10.34 million and net margin of -5.04% underline that the earnings bridge remains in progress. Analysts focused on valuation often look for signs that high gross margins are translating into sustained operating leverage and GAAP earnings inflection; the adjusted EPS of $0.14 last quarter, up 16.67% year-over-year but slightly below expectations, reinforces that incremental costs and the timing of investments can offset some of the benefit from top-line outperformance in the short term. The current-quarter EPS estimate of $0.15, up 32.57% year-over-year, offers a constructive directional signal; however, the market may reserve judgment until reported figures and forward commentary clarify how rapidly EBIT strength converts to adjusted EPS and GAAP profitability.
Institutional notes in this period also reflect sensitivity to how quickly new enterprise wins translate into recognized revenue, especially in large European deployments with multi-phase rollouts. While such engagements can anchor multi-year subscription growth, the near-term contribution can vary with implementation scope and client-side readiness. Given that EBIT is forecast to increase 81.69% year-over-year to $66.95 million, a result in line with or above that range—paired with a steady or improving gross margin—could soften cautious stances by demonstrating that operating leverage remains intact despite the upfront investment cadence associated with large implementations.
From a positioning perspective, the majority of recent institutional commentary invites confirmation that the company can deliver both on the top-line growth that consensus embeds and on incremental profitability. A revenue beat without margin and EPS follow-through could perpetuate the cautious tone that drove the recent downgrades to Neutral/Equalweight, while balanced execution—revenue near or above $216.66 million, clear gross margin resilience relative to the prior quarter’s 65.56%, and an adjusted EPS outcome at or above $0.15—would likely challenge the current cautious consensus. The qualitative guidance will be equally significant; if management outlines a credible framework linking ongoing expense discipline and deployment timing to near-term margin expansion, it could recalibrate the majority view toward a more constructive stance.
In summary, the predominant institutional view in the immediate pre-report window is cautious, with formal recommendations shifting toward neutral and price targets clustered around the mid-$20s. Analysts center their expectations on a high-growth revenue print, stronger EBIT, and a measured trajectory for adjusted EPS and GAAP profitability. Delivering on these markers—especially a credible bridge from strong gross margin to sustained earnings scale—would be the most effective counterpoint to the prevailing caution and could set up a more favorable recommendation mix in subsequent updates.