Three-statement model example: a take-private's filings

Putting the three financial statements’ historicals side by side is usually the first step in a modeling exercise: it gathers everything the filings say about the company in one place before anything is forecast. This page does it for Clearwater Analytics, which Permira and Warburg Pincus took private at $24.55 a share in 2026, and projects all three statements to 2030 on management’s case. The LBO model, debt schedule and returns on this deal run off it.

Three things about Clearwater shape the model. It sells investment accounting and reporting software to insurers, asset managers, banks and other institutions: over 2,500 clients and over $10 trillion of assets on its platform at the end of FY2025. It is paid mostly in basis points on those assets, invoiced monthly in arrears. And in April 2025 it bought two companies, Enfusion and Beacon, partly with borrowed money.

The income statement

Stock-based compensation is the largest add-back. In FY2025 it was $127.9 million, 17% of revenue, across more than 3,000 employees: about $43,000 a head. As at many listed software companies, a meaningful part of pay is in restricted stock units, and it is spread across the business: $33.8 million in R&D, $37.4 million in sales and marketing (up from $15.3 million in FY2024) and $40.2 million in G&A, a function of 229 people. Enfusion’s awards were converted into 1.9 million Clearwater RSUs, and $152.9 million of RSU expense was still to be recognized at the end of FY2025, over about 2.3 years. Management’s forecast holds the charge flat at $127 million while revenue more than doubles, taking it to 7% of revenue by 2030; with that much already granted, the flat line is one of the larger judgments in the forecast.

FY2025 growth was mostly driven by inorganic growth. Revenue grew 61.9%; taking Enfusion’s and Beacon’s contribution from the 10-K, organic growth was 18.8%, a little slower than the 21% to 23% of the two years before.

Projecting revenue: the ARR build

Retention is the anchor. Clearwater has disclosed gross revenue retention of at least 98% in 27 of its last 28 quarters, and organic net revenue retention was 113% in FY2025; the model holds both. Because fees are basis points on clients’ assets, net retention can move with markets as well as with what clients buy. New ARR is set at 8.4% of the beginning base so that revenue reaches management’s $1,807 million in 2030, and Enfusion and Beacon’s ARR runs on its own rows, so organic growth stays visible.

Projecting costs to net income

R&D and sales and marketing are built from Clearwater’s disclosed headcount: 937 in product and engineering and 299 in sales and marketing at the end of FY2025, about $170,000 and $311,000 a head. Heads grow at the rate that reaches management’s spend, with cost per head rising 3% a year.

Taxes are where Clearwater’s history matters most. Its FY2024 net income of $428 million came almost entirely from releasing the valuation allowance on its US deferred tax assets, and those assets, $696 million at the end of FY2025, shelter the forecast: a 25% cash rate, with deferred tax assets offsetting up to 80% of taxable income, leaves cash taxes at $10 million in FY2026 and $34 million in FY2030. Interest is 6% on the average term loan and 4% on average cash, both assumptions; interest on average balances makes the model circular, with a single breaker cell.

The balance sheet

The Enfusion and Beacon purchases change the balance sheet’s shape. Goodwill went from $71 million at the end of FY2024 to $1.27 billion a year later, acquired intangibles from $31 million to $688 million, and debt from $46 million to $823 million. A company with $240 million of net cash had $731 million of net debt a year later, 2.9x adjusted EBITDA.

Three lines are specific to Clearwater:

• Deferred revenue is small, $22 million against $731 million of revenue, because clients are invoiced monthly in arrears. Receivables carry the working capital, and a fall in client assets reaches cash within a month or two.
• Deferred tax assets of $696 million have been on the balance sheet since the FY2024 valuation allowance release, and are why cash taxes stay low in the forecast.
• The tax receivable agreement from the IPO, which required Clearwater to pay the TRA parties 85% of certain tax benefits it realized, was amended in November 2024 to one-time settlement payments of about $72.5 million; the model carries no further TRA payments.

Projecting the balance sheet

Most lines follow revenue or a schedule; two carry most of the change. Cash goes from $91 million at the end of FY2025 to $2.39 billion in FY2030: the forecast has no acquisitions, buybacks or dividends, and the term loan only amortizes, so $731 million of net debt becomes about $1.6 billion of net cash. That build-up belongs to the standalone forecast; under the buyers, the same cash flow services the acquisition debt, which the LBO model takes up. The deferred tax asset falls from $696 million to $316 million as it shelters taxable income, which is what keeps cash taxes low. Goodwill holds at $1.27 billion, and intangibles amortize from $688 million to $161 million.

The cash flow statement

The cash flow statement shows the 2025 acquisitions from the other side: $1.07 billion paid in FY2025, funded by $925 million of new borrowing and cash on hand. Excluding them, the business generated $164 million of free cash flow, more than its $120 million of adjusted EBITDA after stock-based compensation. On the forecast, free cash flow reaches $727 million in 2030, 95% of adjusted EBITDA.

Checking the model

• The balance sheet balances in every year, FY2021 to FY2030.
• Cash ties: the cash flow statement’s ending cash is the balance sheet’s cash line by reference.
• Historicals are sourced: every figure is cited to its 10-K or 10-Q page, and each year’s adjusted EBITDA ties to the company’s own reconciliation.
• The forecast ties to management: revenue and adjusted EBITDA match the proxy’s management case in every year, to within rounding.
• Free cash flow ties to the proxy: unlevered free cash flow is within $0.7 million of the proxy’s every year; the proxy treats the $127 million of stock-based compensation as a cash cost.
• No typed forecasts: every projected line is a formula off the Assumptions tab; the only typed figures in the forecast columns are the proxy’s own numbers, held for comparison.
• The circularity converges: the breaker is on, interest is non-zero in every year with debt, and the workbook recalculates to the same values in a second calculation engine.

Methodology. Every historical figure is from Clearwater’s 10-K and 10-Q filings, the merger proxy (DEFM14A, April 8, 2026) and the Enfusion merger prospectus, cited in the workbook to document and page. The Base case reproduces management’s forecast in the proxy; where the proxy gives no driver, the driver is either taken from Clearwater’s own record or set so the Base case ties to management’s figures, and each is labeled as such. The Upside and Downside cases are stated assumptions. Organic growth compares FY2025 organic revenue with all of FY2024 revenue, with Wilshire’s first year carried as organic. The model was built in Compound; it rebuilds work a deal team could have done and is not the buyers’ model.

The download is Compound’s completed workbook from this run, with Clearwater’s figures and every formula live.

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