Lots and lots of people to thank, but I won't do that right now. I'll wait to the very end. Deandra, Pedro, HJ, everybody, the whole team who's put all of this program together is phenomenal. Yesterday, our new head of IR, Kamil Mielczarek, if you want to stand up, started yesterday. If it goes well, it's because, you know, everybody did a great job. If it doesn't, it's all his fault. Listen, thanks, everyone. My colleague, not my partner in crime, but my colleague here, Alphonse Valbrune, our Chief Legal Officer, will very briefly go through these items.
I have the easiest job in the house today. I just have to be sociable and listen to the great program and remind you that 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, intentions, and expectations, including in relation to business outlook, future financial and product performance, expectations for the acquisitions of Enfusion, Beacon, and Bistro, and their expected benefits, are forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the risk factor 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 today's presentations, except as required by law.
For more information, please refer to the cautionary statement included at the beginning of our Investor Day deck, which you see here, which will be posted on our website. Lastly, all metrics discussed on this day are presented on a non-GAAP or adjusted basis unless otherwise noted.
Thanks, Alphonse. And so we'll walk through the agenda here. Clearwater and the market since we last met. We did this a couple of years ago in September 2023, and really proud of the results that have happened. Sandeep Sahai will cover that, then powering growth. Subi and Scott will step through that. Our new capabilities in the right to win, as well as technology. Souvik Das and Kirat will come up and speak about that. And then I'll finish with some information on financials and folks. With that, and with the legend, the greatest, the walk-on music for Sandeep Sahai.
Only Jim can do that. You know, I've always found that maybe a CRO could do it. It'd be fine. A CMO could do it. It'd be fine. We have the only CFO in the world, I think, who can put it out like that. So look, thank you all for coming. I really appreciate it. I know that there are many companies out there you can choose to follow. And the fact that you choose to come and listen to us, invest in us, write reports about us, means a lot. So thank you. Look, this is a super exciting time for all of us. You know, we're trying to bring together Clearwater with Beacon, with Blackstone's Bistro and Enfusion. I've always felt that you act when you're strong.
The Clearwater platform has done really well in the past few years, as we will show you. We really have strong expectations of what it will do next year, the year after that, and three years. When you have strength and belief in your core proposition, that's when you act. I don't think you act when you're sort of weak. We are really excited to bring these companies together. What's also true is it would be really easy for us to say, "Oh, Clearwater's acquired Enfusion. Let's just roll it in." Clearwater has acquired Beacon. Let's just roll it in. I think we would do disservice to those platforms if we did that. When it comes to hedge funds and asset managers, Enfusion was a leader in the market.
When it comes to Beacon and the most sophisticated risk calculations, Beacon is a leader in the market. And so we thought that when you're bringing leadership platforms together, you sort of come up with a new name, which sort of embodies the best of all of them instead of it all becoming Clearwater. So that's my pitch for this new logo. I hope you saw it outside. It was brilliant. When the banner goes up, it's a lot of fun. So who are presenting today? Obviously you got me here. You're going to hear from Subi Sethi. She's a Chief Operating Officer. You're going to hear from Scott Erickson, who's the CRO. You're going to hear from Jim, as you've already done, as CFO. Souvik Das, who's our CTO, and Kirat Singh, who's the President of Risk and Alternatives.
We also have from the executive team, Alphonse, whom we just saw, and we got Cindy Blendu. Cindy's right there. The thing is, this team hasn't changed a lot. I think someone was asking me about, "Wow, who are the new people in your executive team?" I'm like, "Oh, crap. We don't have any. We just have Kirat, which is great," so this is a team which has, you know, was here about two years back when we presented to you. So what I thought we would start with is, what have we done when we, since the time we met you two years back? And I think it's very easy for chief executives or CROs and all of those roles to talk a big game about the future. I, I like to talk a lot about the past. What have we done?
Did we do what we said we would do, and I think you should judge teams based on what they have done and then the vision, the layout. So we thought we'll spend a few minutes just talking about the past. The last time we met, we forecast a 20% revenue growth. So really what you should have expected was $364 million in 2023. You should have expected $437 million in 2024, and so on and so forth. What did we deliver? We delivered a 21% growth in that year, a 23% growth in 2024, and a 23% growth in the first half of the year. It's not about the future, what we will do. This is what we have done compared to what we talked about. I feel like there's $14 million of revenue extra last year.
It becomes harder now because you've got the acquisitions, so it becomes harder to track, but yes, going back two years, you can look at this and say, they did what they expected, what we were expecting from them, and the next thing which matters a lot to me is unit economics. Why does that matter? It just shows you, are you selling at the right price, or are you having to discount to sell it? And then are you efficient in how you deliver this, so it matters quite a lot when you think about unit economics. Are you doing a better job there or not, and what you should have expected again was 76% in 2024, 76.5%, and 77%. What did we deliver? We delivered 170 basis points versus the 50 basis points people should have expected, and this is not happenstance. It just doesn't happen.
It happens because you execute it. You look at the two years, we delivered 240 basis points on unit economics versus the 100 people should have expected. Now, granted, we didn't have generative AI as a big deal at that time, but the fact is this is solid execution, in my opinion. Then we talked about EBITDA, and a lot of you said 200 basis points a year. That's, that's a little too aggressive. A lot of you in this, in this room here said, "Try and do 100." And we said, "No, we think we can do 200 because of the efficiency we expect to get," and the point is, what did we deliver? In the first year, we delivered 300 basis points against that goal of 200 basis points. What did we deliver in two years? We delivered 650 basis points versus the 400 you should have expected.
So the point is that I do think that the core business has done a lot better than we said it would do. And that is very strong execution when you look at this chart. Our gross revenue retention, 98%, 25 out of the 26 quarters. We always felt that one quarter we could have done something more, but it just wouldn't have looked cool. This just looks better. Yeah, there's a little bit of a variance. And there are some 99%s in there too. But this doesn't come easy. When you want to retain 98% or 99% of your client base every year, quarter after quarter, you got to have excellent client focus. You got to have client delight. It cannot be client satisfaction. So I feel like when you look backwards, the other thing we focused on, many of you talked about these things as concerns.
And you talked about the TRA. Again, not easy to get extinguished. It's not like the shareholders are waiting for us to say, "Why don't you just buy this and be done with it?" It was a lot of work. But I understood as an investor that, yeah, I would not want this hanging out there as it would change optionality. A lot of you had questions about governance. We're on 10 votes to one. How does that work? How does that influence what the private equity companies do and don't do? And that has changed. A lot of you talked about overhang. And that is a two-sided story. Because the good news is that over the last several months, there have been 119 million shares. Let me just repeat that. 119 million shares that our sponsors have sold out. So I thought, "This is a great thing.
It gets rid of the overhang." Well, you know, there's this daft thing called supply demand, which has really, I think, hurt us a little bit. But the point is there's less than 2% shares held by the sponsors now. So from a shareholder point of view, I think it has made the environment a lot more stable as you look out. It made the governance a lot more stable as you look out. So I do think that, you know, this is something which you sort of take upon yourself. And I say that, you know, Clearwater, I think, has executed over the last two and a half, three years, from the time of IPO, if you go back and look at what we said at the time of IPO, we have executed for the last four years.
I feel that gives us the right to try and do something bigger than where we started. We started with investment accounting. So we believe we have some degree of right to go after the entire investment life cycle. It doesn't mean that the market for investment accounting is going away. Is that a $4.5 billion market, TAM, or is it five? How does it matter? We were at 500 million. What does it matter? Many, many clients do want to see the entire investment life cycle in one spot. No one, no one can provide that today. I think Clearwater has a chance, and we'll talk about that. This, after this, I'll switch into what our thinking is about the business and what we think the vision for our business is.
I just think we got to just level set first. When you think about investment management, what is changing? I think point number one, all of us can quickly agree on. Alternatives is growing dramatically. And somebody may say, "Oh, what's the big deal?" It's massively opaque compared to equities and fixed income and bonds. You think about bank loans, private credit, private debt, derivatives. These are much more opaque instruments to understand and trade in. And that is a change which is occurring on a daily basis. How do we know? Not by reading reports. It's on our platform. We have $10 trillion on our platform, and we can see what people are buying, what are they selling, what's the trend line. So this is a trend which is not going away. The second one is global portfolios.
With all the fun we have on the political side, this changes every day. This country is good. This is bad. Guess what? You have to understand your portfolio and the risk on your portfolio if you're going to act with any degree of confidence. Number three, I think, is the speed at which you have to make these changes. Legacy stuff just cannot keep up. You really can't say, "Oh, these three countries are going to be doing well for the next six months." No, no, no. They could be good today, bad tomorrow. Crypto could be good today, bad tomorrow, really bad day after tomorrow, and really good fourth day. People who have a full comprehensive view can act with confidence. And if you don't, you get slowed down. And GenAI, how can you not talk about GenAI when you have a technology conference presentation?
We're going to talk about GenAI. I'll just go into this a little quickly and perhaps talk about it. Look, alternative assets should just change. We shouldn't call them alternative anymore. They are now making up 25, 30, 40% of people's portfolios. At that point, they're not alternative. They're just like fixed income or they're like equities. The problem, the problem with this is if you process $1 billion worth of bonds and you process $1 billion of private credit, it takes 7x the effort. Business leader may say, "You know, my portfolio was $10 billion, it's still $10 billion." And the amount of work and the cost associated with that could be 7x depending on the mix of assets they invest in. Alternatives is something which is growing. There isn't like another way to look at that.
If you look at people investing globally, U.S. investors now invest 40%, 39.2% of their assets abroad, and that is changing on a daily basis, so you have to be able to handle that, so just to switch gears, I've been talking at a high level, and you're like, "Fine, this is, that makes sense," well, just think about one area, say fixed income. Fixed income, you got to have portfolio construction, portfolio management, order execution, accounting, and you have to do all of these steps through regulatory reporting, compliance reporting, and you have different systems for each one. You could do this, but this is not the problem. The problem is you've got asset class after asset class after asset class, and in each one of these, you have to do exactly the same thing.
You got to do portfolio construction, portfolio management, order execution, accounting, compliance, and that's why it gets so complicated. And people spend days and days trying to understand what they have, what the risk is. So really this summer, a $40 billion-dollar European multi-asset manager gave us this quote. Every new asset or jurisdiction, same asset, different jurisdiction we enter brings new manual workarounds. We're juggling over a dozen systems, and I can tell you a dozen is low. We've had clients who've got 100 systems across the globe for investment accounting, and none are built for today's regulatory complexity. I think he said it, which is why he didn't want to name on it. He said, "We are not just inefficient, we are exposed. We don't understand our risk." That is the problem our industry faces. And people may agree with it, disagree with it, it doesn't matter.
This is what they face. Alternatives are growing, globalization is growing. Guess what? You have to understand it. So from a technology side, let's talk about tech for a little bit. You have to do all these steps for, let's say, equities. You got to do pre-post trade compliance. Can you do this trade or not? You got to do an order management system and a portfolio management system, IBOR. You got to look at your whole portfolio. You got to look at risk and performance, and you look at client reporting. The trouble is, if you look at any of the competitors today, they'll have different systems for each one of these things. So you could buy a software from them which does pre-trade and OMS PMS. And then you would have a different system for accounting and a different system for risk and performance.
And if I can just sort of just stay with this for another second here. The trader only needs seven things about a bond. That's all they need. And they'll trade. Then it comes to the middle office, and they can't do with just seven. They need 21 more things. They redo those seven because these two systems don't talk. And they come to the accounting people, "We want 40 more fields, which tax slot, which we got 40 more things we need." And we built it ourselves. We create a brand new security master, so to speak. And therefore that gets to talk to this one and this one. Every one of them are different when it's the same security. It is the same exact security. But every one of these systems will model it differently. Everyone will get data differently. And this is on equities.
As all of us know, it's not just about equities. There's fixed income and alternatives. And the chart wasn't big enough to show you that it's not alternatives. It is derivatives, mortgages, private credit, private debt. Yeah, best of luck. Making sense of all of this together in one spot. How do you do it? And this is also not the story. The story is actually this. The same asset in the U.S. is completely different from that asset out in Europe and then Asia. Best of luck. Try trading in Japan and then Hong Kong and Taiwan and Malaysia. Everyone's got their own systems. And this is why people have dozens and dozens and dozens of systems. This just doesn't compute. It makes no sense. And if you talk to technology executives, I think everybody will accept this, that this is a real core issue.
It's not complicated to know this, that if it's the same security, why can't we have one model for it? And the trading people just use seven of that model. The next group uses 10 more, and the accounting use the 14, but it's the same one singular model for a given security. You got mortgages, it's one security. You got bank loans, one security. Some of the private equity sponsors are here. What about their reporting? This is whatever they want. They'll just send you a 15-page document. Best of luck figuring that out. And everybody looks at that and makes their own summaries and their own data points. Why can't we come up with something which says, "Private equity should report like this when you're buying it, when you're investing in it?" What is different? The fee may be different and all that. Okay, that's simply configurable.
But reporting on performance should not be this big an issue. Data system, all of us don't have to go ingest the same damn data, reconcile the whole data. If it was all easy, I would have let it go. But we have hundreds, hundreds of people doing data reconciliation. Every customer does it separately. It makes no sense. Accounting changes. It changes every day. Regulatory reporting, you could have 600 changes in a given year across the globe. Everyone has to make that change. Really? When you look at Salesforce, you look at Workday, you look at all of these modern SaaS platforms, they make a change one time, it ripples to everybody instantaneously. It's not like they're sending you a damn patch, go change it. It just is an archaic way our industry works, we think.
So then I'm sort of winding down a little bit and talk about why we did this. And I want to talk about this concept of capability. I think you'll hear us say, "Oh, we do front office. We do some risk. We do some." Everybody, go to the website. Everybody does everything. Really? So then there's a notion we have of no capability, limited capability at market and above market. But if we don't stress it like that, you're just going to get everybody saying they can do OMS, PMS, all of it. The question is, how good is it? And do you have 20 clients who will stand up and say, "You're better than market," or "You're at market"?
And if you look at Clearwater, I think what we did well was the middle back office. We are, I think most people would quickly agree, by far the next generation disruptive platform there is. I mean, nobody went to Boise looking for an accounting software, let's be really clear. People went there because that platform was disruptive and it solved a massive problem. But did we do some OMS? Yes, a little bit. Did we do some PMS? Yes, a little bit. So if you asked us to put a check mark, we may have said, "Yep, we do all of these." But the capability of it was very limited when you look at somebody like an Enfusion, which is a leader in the front office systems. Are they the best at everything? They're not. But do they do accounting?
Yes, but very little accounting, very little compliance and regulatory reporting. And both of us were missing this massive issue around risk. Why does risk matter? As you get more and more opaque, as you increase the amount of derivatives you trade and the bank loans you trade and the commodities you trade, understanding risk becomes more and more important. Just think about it. If today you wanted to take down your exposure to Germany, you first have to understand your exposure to Germany. Equities are not that hard. When you look at a derivative, you have to see what's underlying. If you have an LP, you have to see what's underlying. You got a mortgage pool of mortgages, what's underlying? How do you know that? They're based in different systems around the world, and you can't pull it all together to get a comprehensive view.
Clearwater, I think, can do is really build this architecture, which I would like to suggest that many other companies can't even start to try. Enfusion is a single instance multi-tenant modern platform. Clearwater is a single instance modern cloud platform. Beacon is on the cloud single instance platform. All three of us were built like Salesforce is built or Workday is built. And I would challenge you all to think about in your own mind, just think about our competitors. How many of them actually have a single instance multi-tenant platform? Are they on the cloud? Yeah. It's like saying, "I'm taking a walk." Are you on the cloud? Is it single instance multi-tenant? And if you don't have it, what is the problem with it? You got to continue to upgrade separately. You got to do your own data ingestion.
You got to make your accounting changes differently. So people say cloud, and they're sort of trying to associate that with single instance multi-tenancy. It's just not true. If you have a single security master for all asset classes across every country, then you could put a single accounting engine around it, which Clearwater already has. Then you can put a layer of AI around it and put this around it. Clearwater already has this architecture. Enfusion already has this architecture. Beacon already has this architecture. It doesn't mean that it's really easy to do this. Bring all three companies together. It is really hard. I don't want to stand here and say, "Just because we bought these three pieces, guess what? We're all done." Not at all. Because between these three, we represent the same asset in different security masters.
And so you got to merge all three security masters and make it one. But if you can do that, I believe you'll transform the entire industry. You make something, a trade happen. It will immediately show up event-based in the middle office. It'll immediately show up in the risk calculation and in the client reporting. There's no translation. The efficiency and speed, there's no reconciliation. It's the same system. We believe this has a chance to completely transform how the industry does work. And that's why we believed you had to do these deals. Kirat is here. He's going to talk a little bit later. I bought him more lunches than I care to imagine. "Hey, why don't you come partner with us? Why don't you do this?" And he'll be like, "Go away, go away." And finally, I think he got sick of me.
And he said, "Okay, fine. We'll do something." But the point is, this is not easy to put together, this intellectual property, and I think we have. Is it open? We already connect to 25 other portfolio management systems today. Single security master, Clearwater has. You get the network effect. And I'm sure you guys know the network effect. But by definition, my data is going to be better than all of my clients. And why is that? Because we manage the entire data ingestion and aggregation and reconciliation process. So when a client finds something wrong with their data, they can't fix it. They have to call me. When they call me, though, I'll investigate it, and I may fix it. But if I fix that data, it fixes it for all of our clients at that same time.
So just by definition, when you think about it, anything our 1,400 clients find on the accounting side, we will fix, and we'll fix it for everybody at that same time. It doesn't wait for end of month. It doesn't wait for end of quarter. It's done every day. It's just fundamentally a superior way of thinking about the business. I do think that many of you generate alpha because you think you have the right models better than the more generically applied risk models. Our platform allows. The Beacon platform allows extensibility. You can bring your own models. You can test it against the models that are already there. But it allows you. It stays open. And an open architecture is really important. Eventually, though, it becomes a marketplace for other regulatory changes, analytical engines.
If someone has a great engine out in Switzerland, they can bring it in and sell it off our platform. So I just wanted to. I get excited about talking about this. But I do want to stress that it's not there yet. It's not like right away we have everything working together, one security master, one accounting. It's not there. But one of the largest asset managers. This is a quote from him. And I think it sums it up really nicely. I called him to get permission to put this up. But what he has written, I think, completely encapsulates what I think, which is, "I'm intrigued to see what you guys can do to build a game-changing platform. It is the Holy Grail. But I haven't seen anyone bring this home yet.
It says, "You have the intellectual firepower and some key capabilities, so you have earned the right to try," and that's all there is. I do think you'll hear from my colleagues about we have the pieces of intellectual property to try and build what the industry has tried to build many, many years back, but a whole business model does not sit on that happening two years from now or one year from now. As Scott and Subi will come here and talk, we want to continue to do what we are doing, just a little bit better. There was nothing wrong with the Clearwater story. We were growing at 20%. Our gross margin, we said 50 basis points. It was improving much faster than that. We said EBITDA 200 basis points. It was much faster than that.
So if we can just go back to doing what we were doing, just incrementally better. Why better? Because we lost some deals because of risk. Now we have risk. We lost some deals because we didn't have the front office. Now we have that. So can we just do what we were doing just a little bit better? And the same thing for the other parts of the business. If we can do this, it will alter how this industry operates. I do think we could be the Salesforce. It took time. Now we think Salesforce has always been there for some of you who are older. Far too many of you are very young. But for those of you who are older, you'll remember. People used to say, "Oh, Salesforce is only for 10-man shops, small shops," but not for the large enterprise-class company.
That went on for 10 years, and today, I don't think you'll hear someone say, "Oh, why not go back to Siebel?" So I think this is the last few slides is technological, just the architecture we just talked about. You're going to hear from our CTO too, so I feel weird. But if we're just going to look at the bottom, it's cloud native. What does that really mean for you? It is the last upgrade you will ever need. When is the last time you upgraded Salesforce? Every day. It just does. When is the last time you think about our competitors? Every six months, every one year, every two years, six-month, one-year program to migrate to this new, whatever it is, version, and my question is, between that version and this version, who the hell's minding the shop here?
What happened to the regulatory changes that happened in the middle here? What happened to the accounting changes? What happened to the new asset classes which have come up? It is the last upgrade you will ever need, any of these three platforms. It's a single security master, one integrated source of truth, the network effect. Our data is always, by definition, going to be better than all of our clients put together. We future-proof regulation and compliance. We make these changes every day. We deploy literally thousands of times a year. There is no notion of I'm one version behind or two versions behind or something fancy like that. That's when I was much, much younger. That didn't happen anymore. Just we talk about architecture. I just wanted to say this. Every other industry, just think about every other industry. They operate like that.
They operate like single instance multi-tenancy where people make the changes, and you log in and do your work. What's wrong with us? Everyone has their own security master. They don't talk to each other. Nothing works. What the hell? Sorry. I didn't mean that, but it's not okay. This level of inefficiency is not okay. I just think ours is one of the few industries where the transition is still in the early days, and I feel by far Clearwater is leading that change here. I do think that. Talk about generative AI. I think people talk about generative AI. All of us have the same LLMs. You have to know that. Obviously, you know that. Everybody uses the same LLM.
But if I sold software to you and you and you and you, and all of you had your own instance, and you were doing your own data, how do I learn from all of you? I don't even have access to your instance. I don't have access to your instance. Clearwater, all of our clients, they operate on one platform. Every time we reconcile data, it's stored as to why. We have 10 years and 15 years of data on what happened, what you bought, what you sold, what we reconciled, why it worked, didn't work. Our ability to use LLMs is off the charts, which is why you saw the gross margin numbers, which I'm ecstatic about, or what we've achieved. But it's not because we just worked harder. Our architecture allows us to do that. So look, we're going to talk about growth here.
This is, I think I've talked a lot about the strategy, and we have talked about the margin, and we talked about cash flow. Sorry, Jim's going to talk about cash flow. But as an integrated company, the point is our TAM has doubled. Is it $23.3 billion? Some people are debating whether it's $21 billion. What does it matter? Whether it's $21 billion or $25 billion, big deal. We are talking about 730 million this year's hours. It don't really matter to me. But I do think it gives doubles insurance for us. Insurance was $2.8 billion. It becomes $6.3 billion market. We are, I think most people would agree, just sort of the absolute leader in that spot. Hedge funds are $3.2 billion. When you do the math about their current ARR, they should have a really, really good runway here.
Let's talk about Enfusion and Beacon, and then I will switch back to damn, it went too fast. I have to take this back. Think about Enfusion. There's two things I wanted to say about Enfusion. What you've heard is, "Oh, it's not a good market." "Oh, the growth is slowing down." I've followed Enfusion for at least eight years. Every year, not most years, every year, they grew faster than us. Every year, Enfusion grew faster than us. In 2020, 2021, 2022, 40%, 34%, it was always, always grew faster than us. Yeah, in the last two years, it just sort of fallen off a cliff. We think we have a good sense for why that occurred. I think we have made a lot of changes to our company over the last three years. I think they need to make the changes.
But if you look at the amount of change that has gone on in Enfusion over the last two and a half years, it's been huge at the senior-most levels, at the next level. I'm not surprised that the growth fell. They took all of the R&D, much of the R&D, and tried to pivot away from hedge funds into asset management. But when you pivot away and you give this up, growth is going to stall. It doesn't come for free. And so I feel that our ability to change the trajectory of the business is really high. And then the question is, is the market good enough? Yeah. The hedge fund volatile? No. The smallest hedge funds are volatile. The ones which have less than $20 million and $50 million, big deal. That's not what the market we should be addressing anyway.
But the hedge fund industry by itself is pretty stable. Growth at 5%, faster than us. Insurance assets don't grow at the same pace. So there is zero reasons, zero reasons we should not be able to take this and transition this to a growth and a margin trajectory which is sort of similar to ours. I feel there's been an issue around how to invest, what you've invested in. If you take all of your sales teams and you sort of have them do a little bit of this, a little bit of this, a little bit of this, it will fail. It will fail. You've got to have dedicated teams after hedge funds. And not just that. You've got to have dedicated teams for inception and for conversion. You've got to have dedicated teams for asset managers. And what does asset managers mean?
You have to have dedicated teams for less than $20 billion, dedicated teams for mid-market asset managers and large strategic asset managers. So we have this five-point plan. We like these plans, as you guys know. One is we have already changed this to have a dedicated team going after hedge funds. They have their own product team. They have their own engineering team. They have their own sales team, their own marketing focus. And they wake up, and they focus on hedge funds. Second thing is they have to grow NRR. So we can be pretty proud about our own NRR. But three years back, we were quite depressing NRR. We led that whole movement, and we got to do it again. It's a little bit of déjà vu, but we feel like we have run this script before, and we can do it again. Commercial model change.
We feel there's a way to change the commercial model just like we changed the Clearwater commercial model in 2022. We've done it in the public markets. A lot of people said it's going to be hard. It was hard. But we have done it, and we know how to do it. And the wrong way to do it is to say, "Oh, it's going to take your price up 10%." You can do it one year. You can't repeat it. We have a good repeatable process which is yielding results for Clearwater, and we'll do that. GTM investments, I think we have a lot of room in our EBITDA. Our ability to go make these investments is high. I think the last one is really important, really, is clear roles and responsibilities. Some of these are underway. Some are partially underway.
Some are going to launch in Q4 and it's just a question of timing. Why is that? Because we want everyone to just go back to do what you were doing, just incrementally better. Take care of the home court first. Then we'll talk about all these new products, these new ideas. That's all great. Let's just go back and do what we were doing earlier. So this is a pictorial of where we think this is going to come from. I think the hedge fund focus might add two%. I think the commercial model will add four%, 4.5%, 3.5% in that region. And the cross-sell, we feel, can add another four% to it. If we look at the Bistro story, this is a lot more straightforward. What they have done and continue to do is they do risk for some of the most sophisticated clients on the planet.
And so we feel that the first thing is continue to do what you were doing. We have taken some of the sales team and increased their sales teams and brought in, I think, a little bit more rigor in how they sell. I think Kirat will speak to you. I think he's very, very amazing at the business and the problem. And on the sales front, I feel like he doesn't feel the need to sell. He's like, "What the hell? It's a good product. You should buy it." But we know better. So we're going to put out a GTM team, and that's doing well. They have access to the Clearwater client base and the Enfusion client base. Hedge fund risk, another big one. Alternatives and packaged products. So I think both of these businesses have a five-point plan to get to do GTM.
But what also really, really matters is our core business. And the core business has to continue to do what it has done. And that was the thesis when we did these acquisitions, that the core business has to continue to do what it was doing, just do it slightly and incrementally better. And then if we can build the platform in the next year or two, disruptively better. So to talk about that, I'll bring on stage Subi Sethi. She's the Chief Operating Officer. She's responsible for all client interaction from the time we sell something, actually before we sell something. And so she manages clients through the lifecycle. And also Scott Erickson, who's the Chief Revenue Officer. Thank you.
Everybody is waiting for me. Thank you.
Ceremonial shakehand.
Thanks, Sandeep.
Oh, this is already on. Good afternoon, everybody. This is on already. Okay. Clearly, I have to say this. This is a CWAN moment, right? A new branding. What we want to share today is Clearwater's growth model, which is actually nothing new. We've been, as Sandeep alluded to, we've laid down the vision. We've laid down the framework, and we're going to continue to do incrementally better. Now, for many years, we've actually earned the right in the enterprise boardrooms, and many of our large institution clients actually trust us with their investment operations data, and that trust, that track record, is a foundation of Clearwater's growth model. Having said that, what I want to share with you is the four levels. I'm supposed to click this. Our model has four dimensions. The good news, as I said, it's nothing new. We want to continue on our path.
As we know, there's a decent long runway already in this. The first is how do we deepen with our clients? Last year, when I stood here, we challenged ourselves, how do we move from one basis point to four? And that required a massive shift in the way we think. Not only think about how we service our clients, but how do we deliver the expanding value to our clients? And that's something which we have made, and that's resonating very well with our client. The second is the vertical specialization. Every one of you is very, very familiar with insurance as a vertical. I remember in my early tenure at Clearwater, we used to serve very few large institutional insurers. However, today we have all kinds. We have large insurance, we have mid-size, and we have retail carriers. And what's remarkable is this.
They all work on that same product and same instance, flex to their needs as to how they would want to leverage it. The third is geographical expansion. Europe and Asia are not future bets anymore. They're real revenue markets for us today. I remember a client in London telling me, "If I can bring all that experience of Clearwater to that market, we can actually lead it," and happy to share that we already have. Last but not the least, asset managers and asset owners. The TAM here is enormous. Asset managers and asset owners, they not only want data, but they want a technology partner who can work with them end-to-end and manage their workflows because the variance in their workflows is unbelievable. Let me take you deeper into the lifecycle.
Two years back, when we stood here, we were wanting to move from one basis point to four basis point and look where we've come with some of our products which we launched then on LPx, MLx, and Prism. I'm proud to say these products actually today carry 20,000 LP funds and 30,000 mortgage funds, and they're operating at a scale. While I was busy delighting those clients on LPx and MLx as a part of my job as Chief Operating Officer and dealing with clients, my clients were forcing us to do more. They wanted to hear from me saying, "Now you have already reconciled data of mine. You've done one data connection. You have ingested my data. You've reconciled, and it's very current every day. Can you give me risk? Can you give me performance? Can you give me front-end solutions?" They were forcing my agenda.
And let me tell you, some of you are my clients here as well. Very impatient bunch. So they were forcing our agenda. We also, at the same time, took a step back and realized that developing these products organically will take time. And thereby, we complemented our growth agenda from organic growth to inorganic moves. Enfusion and Beacon, as Sandeep talked about, both highly relevant, both critical in scaling up our entire lifecycle and roadmap. Now, why does this strategy work with our clients? The reason why this strategy works with our client is because we've earned what I call is license to operate. These are some of my favorite charts, so I'm a little biased towards them. So please bear with me. Over the last five years, we've actually maintained a Net Promoter Score of 60 and above.
60 and above, not in one vertical, but across all verticals for consecutive five years. That is what I call license to operate. That consistency only comes when every transaction, every reconciliation, every anomaly fix is done with precision. The reason why we can do that with precision is because that's one product, one instance working for all clients. Here is a critical piece. Every one of those transactions generates data. When those operational data are converted into insights, they actually govern our technology roadmap. The combination of operations, insight, and product, that's our competitive edge, and that's our advantage. Let me tell you, all of the enterprises actually struggle to implement AI on the top of it because they do not have a single source of data, but we do. Our 114% net retention rate is not just a metric.
It is a litmus test of our clients having trust in us and growing with us. Let's talk a little bit about our clients. The good news is there's no concentration on any segment over here. Today, we have 130 clients, over 130. When you have two more, you actually kind of round it off, who actually pay $1 million more on an ARR on a regular basis, and with 98% gross retention, they've been with us forever, and that's grown both organically as well as inorganically. We think about clients' experience and client delight at two dimensions. First, are they happy? For us, happiness and delight means both economic buyers as well as our power users are able to manage their workflows seamlessly on our system. The second being, are they sticky? Some of our clients' data actually directly go in their board decks.
Yesterday, one of the clients' CIO actually told me, "Clearwater is the only partner wherein his charts on investment operations get generated by one click on Clearwater system, and he gets the deck." Now, that's the kind of stickiness you actually cannot manufacture. And that deep integration really drives stickiness, which is why you could see a chart which Sandeep showed, a straight consistent chart for seven years of 98% gross retention rate. So how do we grow with our existing clients? And that's a question which we have evolved, and we're continuing to evolve. The good news is every day our clients call us and say, "We want to do more with us." And there are many irons in the fire, and that's a common phrase in Clearwater we actually use. I lead operations globally for Asian clients, European clients, American clients, some of the Mexican clients as well.
Having said that, while I make it sound very easy, it's actually not always working with precision every time. So we put many irons in the fire. And I'll talk a little bit about each one of them. The negative 2% is something which actually I'm very proud of, even if it's a negative 2%, which is managing churn. While I believe 2% churn is best in class, I still look at every reason why a client leaves us. Some of it is small asset managers which are folding, but some of it is also input to our product roadmap. Second being, how do we get the full book of our clients on the system? The more asset classes we put on Clearwater, the better the product becomes, the better the insights become. So it's one book, one source of trust, one source of data for our clients.
Can't get leaner than that. Third, cross-sell and upsell. Now, with order management system, portfolio management system, performance, front-end system, all in our portfolio, our clients are asking me every day, "Now, since you have my reconciled data, can you give me a scenario analysis? Can you give me shock analysis? Can you help me with OCIO strategy? Can you give me a performance report? I have so many asset managers. I want to make a performance dashboard for all my asset managers and look at their portfolios and how they're investing in." The answer to all those questions is yes, yes, and yes. Those are exactly the areas where clients want us to grow and have one partner wherein everything is consolidated. Fourth, commercial model innovation. Sandeep briefly talked about that. We don't only protect our clients' investment.
We also design structures and contracts which protect our revenue while keeping fully aligned with our client growth agenda. Last but not the least, the AUM tailwind. Some of it is market-driven, and some of it is not market-driven. Some businesses are profitable than the others. At the end of it, as our clients are growing, so are we. This is definitely my favorite chart. Now, margin mindset. This is a DNA we've built in the last six years, and it's growing across the entire enterprise. Last year, when I stood on this stage, and I promised we could deliver 80% gross margins on our core accounting product, the 77 number you saw was a combined number. I'm proud to say that we did it. In fact, the steady-state clients are actually trailing at 83%. It's something which I'm really, really proud of.
But how were we able to do that? By putting AI at the center. When Sandeep last year came to me and asked for a 50 basis point improvement, I thought to myself, "It's bold, but it's doable." Having said that, since he is my boss, I was cautiously optimistic. But at the end of it, my playbook at that time did not have an AI. I did not know what the art of possibility at that time when we put these models into place and implement them and make them AI native. To help you understand this a little better, Clearwater processes millions of transactions every single day. That gives us data and signals that nobody else has because it's a single instance. So I'm able to see a security if bought at X or X plus 1 or X plus 2 by A and B.
I can see the entire life cycle. And with that data, over time, we've built 1,000-plus AI domain-specific models which are tuned to every business problem. So if somebody is wanting to compare a book yield, we have that problem. If somebody is wanting to know the compliance rules summarized, we have that as a model. And these are not experiments. They're live and running in production, and that is what you are seeing as an uptake in the margin charts. That's the power of combining operational depth with AI expertise. Suspense is another example. Suspense by the name itself is a suspense. Only accountants understand that. This is a different problem. I've credited money, and I don't know where that is. We built a workflow, a suspense workflow, which is AI native.
So not only it manages to clean the suspense every day, but it also tells you against which security is that suspense coming from. At the end of the day, my clients are able to close book on day one and day two because they have zero suspense activity. With that.
There's two clickers up here, but Subi said I couldn't hold a clicker when she was going, as I might get a little anxious and push her along. But in all seriousness, I want to thank Subi and her leadership. It is so much easier to grow when there's high confidence in your ability to deliver and to deliver for clients.
As we talk about one to four as being the key area of focus for growth and just to continue on what we committed two years ago on this very stage, it only comes when you have happy clients, 60 NPS. Are you kidding me? In every single market. The unit economics of being able to deliver at scale and do it profitably to not only price it right, but to deliver. The ability to grow and our confidence in continuing to doing so is not just because we've executed in the past, as Sandeep has described, but because we consistently deliver for our clients. From a revenue perspective and a sales perspective, what a luxury it is for us and our team to know that clients are satisfied, both from a new logo perspective.
Happy clients lead to new logos, as well as growing and having that license to operate that Subi talks about, so Subi talked a lot about one to four basis points and growing the existing wallet share with our existing clients. I'm going to talk about the three other pillars and then finish by talking about the additional opportunities we have since the acquisitions of Enfusion, Beacon, and Bistro, but the four pillars that we talked about, one to four, grow insurance, grow globally, and grow asset managers and asset owners. To start with insurance. This one's personal for me. I actually ran our product team when we brought on our first insurance client, and it's thrilling to be able to stand here today, and Sandeep talked about earlier is that the dominant position we have in insurance.
We've truly gone in and disrupted industry in providing positive personal and business outcomes to our clients. We still have a ton of runway in insurance. And as Subi mentioned, we have global recognition of the solution, but we also have large marquee clients in every single geography. Actually, our largest client, our largest insurance client, is non-U.S., both in terms of AUM and revenue. And the current ARR of 279 against that TAM of 6.3 leaves tons of runway. Now, that TAM has increased since we last met. Sandeep talked a little bit about this because it's not just the one basis point of data management, accounting, and reporting, but it's also now the entire investment life cycle around both front-office capabilities as well as risk. We also last time didn't include Asia in this number.
We only include markets where we were going full bore into those markets, and we hadn't yet done that two years ago, and that leads us to the second point of growth as we continue to focus on insurance and capture this huge runway is to continue to grow globally. The reality is, the TAM outside.
Clients are exchanging data via files. This is not something that clients are exchanging data, sending it to some offline system and ingesting. That's not how it is. It is in the platform happening today. The next thing that we are working on right now is this event-driven, connected platform across Enfusion, Beacon, Bistro, and Core Clearwater. And why is that important? That's important because let's imagine a front office portfolio manager wants to make a change.
Through this event-driven pipe, that change becomes instantly available to the Beacon's risk management system, and then risk analytics can run on the fly, real time, and that data, the computed data, can go back to the portfolio manager in real time. There is no data offloading. It happens all in one system. We are building this right now. It's going to be ready in about 10 minutes. Scott talked about one of the largest German insurers in the market. We are working with that client right now to build the system, and we have now an amazing group of technologists that we've hired from Silicon Valley companies like PayPal, eBay, Amazon, Robinhood that are working on this problem right now. The end state of this platform is a single unified platform that has, at the core of it, a single security master: publics, privates, all of it.
GenAI infused workflows that are not sidecar, that are not add-ons, but core to what our clients deliver, clients need from the workflow perspective. We'll talk a little bit more about that later in my session. Let me talk a little bit about why it is so hard to get this thing done. We have thousands of data sources that we're ingesting data from every day, thousands and thousands of feeds coming into our system every day, millions of securities, hundreds of asset classes. All of these have to be modeled. All of these have to be priced, valued, shocked. All of this has to be done every day for our customers. Many of the data sources do not send us data in structured formats. They send us data in very complicated, unstructured data sources.
We have to extract information meaningfully that is accurate from these unstructured data sources. It's extremely complicated to build, particularly when you think about international clients wanting to do this at scale every single time. This is why we believe in continuing to invest in R&D. And I want to thank Sandeep and Jim for that, to be in that position. Let's talk a little bit about the single security master and the compliance piece that Subi talked about. Look, we see an explosion of alternative assets on our system. And as all of you know, alternative assets do not have in our industry today, we do not have a single defined data format that manages and models different types of alternative assets, whether it's private funds, private credits, whether it's derivatives. There is nothing like that that exists. We are working on that.
So as we get and work with several, several market services, we are actually seeing in real time right now all of the different data formats that are coming into our platform. We are working on modeling it, pricing it, valuing it, et cetera, et cetera. And why can we do that? We can do that because we see $10 trillion of assets flowing through our system every single day for about 2,300 plus customers every day. And that gives us the right to model it correctly, make sense of it correctly. Extremely proud of the work that we are doing out here. We believe we have the right technology and the right domain expertise to go and solve this problem. And finally, I want to spend a little bit of time on GenAI. This is one of my favorite things as part of being a technologist, of course.
Look, everybody has access to LLMs today. And we all, in our individual consumer lives, are using generative AI technologies in many different ways. The key differentiation for Clearwater is we have accurate, complete, and up-to-date client-specific data in our system. So the models that we have built internally are always targeting that data and are learning from that data every single day. They are accurate, and they're predicting accurately with zero hallucinations. That is our secret sauce because all of that data is in one central logical place. That's the power of a single instance multi-tenant platform. So we talked a lot about margin expansion. Over the past couple of years, we have built a massively scaled-out generative AI infrastructure on our platform that is a layer above the LLMs. We have deployed several hundred GenAI agents that are operating on that infrastructure right now.
Our operations team members, our client services team members are using those GenAI agents every day. And that's what's getting us the margin expansion and operating leverage. The next step in our evolution of GenAI in our platform is the ability to use the same infrastructure. We are not going to rebuild it, same infrastructure, and use it to build agentic workflows that solve meaningfully relevant and deep, context-sensitive workflows for our clients that would provide additional value to our customers. And we are working on that. We are in design partners with several different hedge funds and asset management customers right now. Now, the most exciting piece. So we will show you a couple of product demos. This is admittedly a little bit futuristic, but very aligned to where we want to go. And we are working on each of these. We will show you two vignettes.
One is from a chief risk officer of an asset manager who looks at his entire portfolio and uses GenAI to understand the risks of his entire portfolio, perhaps an exposure risk of a particular company, and then sends a message to a technology analyst to see what can be done. The second vignette is about a portfolio manager who looks at his particular portfolio and uses GenAI to run an ex-ante risk model in real time, and then uses the information out of that risk model and communicates with his trading counterpart to see what can be done to his portfolio, all in real time. Let's play the demo, please.
Hey, C1 Agent. Open my firm-wide risk dashboard and display my global multi-asset class exposures covering both public and private markets by leveraging real-time data. C1 Agent. I see an alert. Our tech fund volatility is up 25%.
Several upcoming earnings calls for companies I hold across five portfolios. Show exposure, VAR contribution, and any portfolios at risk. Okay, C1. Load those portfolios on my dashboard. C1. Push alert to analyst and PM. Begin stress scenario modeling of TechCo. In the past, risk meant reactive fire drills, fragmented systems, delayed data, and siloed teams. With C1, I get real-time risk intelligence across public and private markets powered by GenAI standard and custom models, and seamless integration, all in one platform. Hey, C1 Agent. Open my portfolio workbench with research and factor risk embedded. I see a new TechCo idea alert from our analyst flagging a reduction. Open the full idea for me. C1, now show my entire portfolio view. All funds holding TechCo. C1, simulate a 3% reduction. Run ex-ante risk decomposition and check compliance. C1, now generate the orders and send it to the trading desk.
Before, my tools for research, risk, modeling, compliance, and execution lived in silos, slowing every decision. With C1, I act in one place. Simulate trades, run both ex-ante and ex-post risk, confirm mandate and compliance, and execute seamlessly. My GenAI becomes my workflow partner, so I move with speed, precision, and confidence.
So as you can see, in our conception of using GenAI, it is core to our clients' workflows. We don't want to build something that is a sidecar or that's an add-on that is not necessary. It is seamless. It is going to be integrated to our platform and meaningfully provide value to our customers on their daily lives. Thank you. With that, I'd like to invite Kirat Singh, my friend and colleague, who is our president of Alts and Risk.
Thanks, Eric. Thanks, folks. It's an honor to be here as well, and thank you for making the time. Just a quick intro. As Sandeep said, just you can judge teams based on historical performance, and then the future is a vision. So I started at Goldman, just down the street here, working in J. Aron, which was FX and commodities trading. And I think Goldman actually had the first front-to-back derivatives platform for the entire bank across all trading desks. And so I was lucky enough to be a part of building that. I think the key component there really was if you're sitting on a trading desk and you're making markets, prices are moving around. What you really need to do is calibrate your models to be able to match the market. And then you have your own, sorry, axe.
And that gives you the relative value to say, this is what I'm trading, and this is what I think my edge is. And you would need to be able to do that in real time. And I think all the systems that you want to define in risk, you want to be able to change them at market speed. So there's always been this sort of impedance mismatch between the front office, the middle office, and the back office. And that's what we aim to take away. And so, for example, after that, I went to J.P. Morgan and built Athena, which is their risk and trading system. And then Bank of America, I built Quartz. So just another point to make, too. Sandeep had mentioned earlier, our clients said they had dozens of systems. In 2010, Bank of America had 150 upstream trading systems.
So we replaced them with one. And after that, we started Beacon. And I think one of the premises there was, if you looked at this, even in 2010, there was no open derivatives platform where you could say, actually, I want to just change, for example, how I model recovery rates or prepayment speeds. If you wanted to do that, you have to rebuild the risk platform from scratch all by yourselves. So we started Beacon with a view to create an open, transparent platform that's completely extensible, that's cloud-native, and that can define sort of risk-neutral term structure for all markets. So what you can do with that is to say, if I have my edge, I can define what model parameters I care about, match the market. And as a specific trader or a PM, I'm trading just that view.
But at end of day, if I'm a chief risk officer or a CIO, I can see exposure across all my different trading desks in one place. And so that's what Beacon lets you do. It's a unified platform across derivatives, private credit, and of course, public fixed income like cash equivalent securities, et cetera. We cover banks, asset managers, hedge funds, insurance, and energy. Which we also think is a super interesting market now. And if you think about all the carbon transition that's being enabled through renewable energy and all, that makes it extremely volatile to trade. In the past, people would just trade the spark spread if they are trading power between oil and gas or coal. But now, solar and wind is super volatile. So if you want to think about how you want to manage that, you have to have good risk management.
So just moving towards on the insurance side, as you folks all know, after the great financial crisis, banks stopped lending. Cost of capital became too high. And all the big reinsurance desks at banks spun out. And Apollo, Athene and all these other folks spun out as separate insurance companies. And they really tried to run their books as giant derivative portfolios. Because on the insurance side, you have liabilities, which give you some loss distribution. You want to match those two assets. And then you need to recover some spread on top of that to match liquidity and duration. And the better you can do that, the more return on equity you have to your clients. And I think Gilles from Blackstone said this the best, that insurance actually was a leader in this. Usually, the insurance industry is laggards in financial engineering.
But here, public fixed income and equities have too low duration now. They're too liquid. So if you want to match duration for insurance companies, which is longer, you end up having to invest in privates. And then how do you manage risk across both your public and your privates? Well, you use something called Beacon. So we can model both the risk for both publics and privates. And Blackstone was a client of ours. And we run the entire fixed income and credit portfolio. And using that plus Clearwater, they built Bistro on top of that to give themselves a whole portfolio view. And we've talked a lot about integration here, too. And I think one reason I'm very excited about this here is that our clients have already integrated. So Blackstone, Global Atlantic, Prosperity, these are insurance companies who had already integrated.
So actually, when Sandeep and I were chatting about a year and a half ago, I think for the record, it was one lunch and two dinners. So it wasn't that hard. But it's very exciting for us because as a small company 10-11 years old, we would get five or 10 clients a year. But now we have access to 600 clients on the insurance side and 900 hedge funds for whom single data mapping, we do it once. We can then offer out-of-the-box risk. And uniquely, we can allow people to customize it. And I think that's really the edge. And if you think about the insurance side, too, we talk about the market and trends like that. Insurance wants duration. Duration, for example, is battery storage. Those are eight- or nine-year assets that you can treat as a bond or solar farms.
Even insurance companies have exposure to energy. The fact that we can model all of these together, I think, is a huge enabler for us. There's just been this general secular trend across markets to say alternatives have doubled in the last 10 years, $20 trillion. Multi-asset strategies across global macro hedge funds and asset managers, that's the space that we play in. Our clients, I think some of them are in the audience, global macro, multi-strategy, multi-PM hedge funds, and asset managers. That's sort of our bread and butter. It's very exciting for us to be able to enable risk across these different pods. Because I think previously, people were investing in a specific strategy, but that doesn't work in the market nowadays.
So any hedge fund or asset manager that has multiple strategies, multi-PM funds, investors are happy to give them money and allow them to allocate it. But then the hedge fund needs a CRO or a CIO view across all of their strategies. And some of our hedge funds are exposed to crypto even. That's easy for us. Crypto is basically just a currency which is super volatile. So we can model that. We actually have a bunch of clients for whom we set up as a swap dealer for crypto trading as well on the option side. And of course, everyone is global, as we just talked about as well. Sorry, I think I'm over time. So I will try to speed up a little bit here.
I think the thing about, for example, what Bistro allows folks to do is have the CIOs and the CROs at an insurance company have the same exact view as the PMs. So if you can say, for example, in California, there were wildfires, Blackstone has CLOs, direct lending, ABS, and other things. And if you want to say, well, what's my exposure to California, you can immediately find which direct lending, which asset-backed securities those are related to, and then go discuss with the PM who's managing that desk to say, well, actually, how do I mitigate this exposure? I might want to hedge it or figure out what my rotations are, et cetera. And if you think about also privates and publics, looking at risk across them and liquidity is becoming increasingly important.
As private markets become more liquid, people are setting up evergreen funds, which are basically a mixture of public fixed income and private credit on the long end. And again, to see why this is important, if you look at the endowments, for example, Yale had to deleverage $2.8 billion. And you think about Harvard having $50 billion endowment, why are they worried about changes in regulation? It's because their draw is something like 4% a year. So if you think about changes in regulation that are like, sorry, I don't know a better way to put it, so I'll just say regulation, that could increase their draw to 10%. They have like nine billion of unfunded private equity investments, 50% private credit. So they're super illiquid. They've never had to manage liquidity risk before.
So, I think the more private exposure you have, you just need better risk management across that with publics. And so I think we can enable a lot of this liquidity and risk management for them. Finally, tech stack. So we've talked a lot about cloud-native. When we started Beacon, we started cloud-native. I think there's no reason for people to buy data centers now. And I think what's really interesting about the cloud is it's elastic. It allows your compute needs to grow with your business. So for example, one of our clients during the COVID bank client, actually one of our largest clients is in APAC, in the APAC region. So again, super global. They wanted to run COVID scenarios with a bunch of stress scenarios. Using Beacon, they could literally spin up 2,000 cores.
I think they paid something like $70 using the spot market on AWS and run a scenario in 30 minutes. So things like that are really why you want a cloud-native system where you can put your own models, bring your own models in and run it. And what Beacon allows clients to do is, unlike a bunch of our competitors, too, who give you either out-of-the-box systems or completely customizable systems, we can give you something that's risk on your trades and your positions and market data, but you can spin up a development environment next to it, which is now AI-enabled. So actually, we were just working with a big Malaysian oil company where we enabled LLMs for them. And development environments always have steep learning curves. The fact that they could use it to say, write me a Monte Carlo pricer to capture seasonality in natural gas.
And we can actually spit out a little bit of code for them to do that. And that gets them started. So it turns people who are not programmers into programmers. And that's very exciting to me. I've been writing code since I was 10. I think my first computer had two kilobytes of RAM. And so just to talk a little bit about our competitive edge here. And if you think about it, again, what's exciting here is we have single-tenant data for 600 asset managers, 900 hedge fund clients. A one-time mapping across that allows us to deliver our clients' risk without them having to deal with the hassle of integrating it, making sure the data is right. And if you're trying to trade or manage risk in volatile markets, the last thing you want to do is figure out, do I have the right trades?
Have I missed a trade? Are my positions inaccurate? Have I got an incorrect mapping? Or if I'm using risk metrics for something or IBOR or something else, can I add those numbers up? I think the fact that with Beacon, we have both the cross-asset derivative risk models. With Wilshire, we have factor models and equity models. We can integrate those together and allow clients to customize them across a single data plane and give them risk and liquidity capital reporting on one set of data. That's super exciting to us. The other thing I think that's really interesting is Clearwater is an IBOR, T+1. Both Enfusion and Beacon are start of day intra day real time.
So the fact that we can take your positions from an IBOR, roll it to start of day, and give PMs the same view so that they can actually manage risk and trade on data that's reconciled with their accounting in their middle office. That's actually what we're enabling for VKB. But also, our clients have already done this. I think that enables us to create a game-changing platform here. Excited about that. Thank you, folks. I think I'm handing back to you, Jim.
Great job. Clearly, it's a privilege to work with those folks. If you just hear how Souvik and Kirat talk about how those technologies can come together and fit together, you can get really excited about that opportunity. You can hear all of the use cases that flow behind that.
And then when you hear how Subi and Scott speak about how our clients are bought into this, how they're driving that, how the interconnectivity of that, of as brilliant as that vision is that everyone has put up here, it's actually grounded in what our clients are saying to us. So I think it's an incredibly exciting vision for the future. And it's just a privilege to, hey, I'm just an accountant. So it's a privilege to hear about coding on a two kilobyte computer or whatever that was. But I did play video games. But let's be a little more pedestrian for a moment. I think coming out, this whole event is about talking about the vision. It's once every couple of years where we're doing this. And we're trying to project that growth and kind of the long-term vision.
And so I think that's been the meat of this conversation with all of you. Hopefully, you understand that. Hopefully, it resonates. And it's consistent with what you've heard in the past. Coming out of Q2, though, a few people asked me some questions about 2025. So I thought I might just take a minute to talk about that, if that's OK with folks. And then we'll get back to more of our long-term view, what we want to think about. So let's just cover for folks kind of our illustrative framework. We tried to articulate this. But I think when you see it in numbers and the pictures, I think it's helpful for folks to understand. On the left-hand side, you can see that's Clearwater revenue in 2024 and Enfusion revenue as a public company in 2024.
And then just walking across Clearwater at the top, our expected revenue growth was 20% for the whole year. Clearwater was Clearwater for the entirety of the year. That's why it's 100%. And so that kind of comes to the in-year revenue expectation under that framework. Within Enfusion, we spoke about a 13% growth and how that fit. It was only here for a part of the year. And so that layers in to kind of what that in-year expectation is. And then for Beacon, we talked about $44 million of ARR. And that's kind of flowing in at the time of acquisition. And that comes to kind of the midpoint of the guidance framework. So hopefully, that helps people understand what the pieces are. I think folks also had a lot of questions about, well, wait a second.
How does it fit with the quarters? And how does all that fit? So here's what we've laid out for you. You can see that we're growing. So let's just talk about Q1. $126.4 million was Clearwater. And that's what we grew. And we grew to $130.6 million in Q2, the organic business, as we disclosed. And the acquired businesses were $51 million between the two in Q2. 3% sequential growth in Clearwater. Remember, Q4 of 2024 was a 27% growth. And we had talked about at that time, we brought forward a few million dollars of growth at that time. So you can see how that played into Q1. And so as you walk through and you see these quarter-over-quarter growths throughout the year between Enfusion, Beacon, and Clearwater.
And so as you think about this quarter-over-quarter and as we're kind of starting fresh, all of these businesses as we acquired them in April, we talked about all of the plans and all of the innovations that we're working on. To drive these, this takes time. We said some are partially underway. Some are starting in the fourth quarter. And some are well underway now. As you look at this, you see acceleration within the business on a quarter-over-quarter basis. And that's how, as we're putting the teams in place, as we're driving to this level of detail and granularity with folks and really thinking about when Sandeep talks about, let's just do it incrementally better, that's at the investor level.
The granularity that we go through when we think about market segments and driving that and what our right to win is at each of those levels has come through. And the plans are now in place. And we're excited to see that growth. So that's 2025. Let's now talk about our continued operational improvement. Here is our current operating model. And as Sandeep mentioned earlier at the beginning, we delivered 200 basis points margin improvement in 2023, more than we promised. In 2024, again, 350 basis points margin improvement. And in Q2, the model looks relatively similar. Yeah, you like that? I may not be able to code, but I can do graphics. So now let's talk about what Q2 looks like. Remember, we had kind of three different models that were coming together partially in Q2. And you look at the full year.
70%, 70.5% for our gross margin, 22.5% in R&D, and 10% in G&A for the whole year. Basically, where we were living in Q2, we're driving and doing all of this integration work and keeping this for the rest of 2025. Now, what are we committing to going forward? As we step through, yet again, we will talk about it's a little bit of the same message. We're delivering it again. In the past, two years ago, we committed to 50 basis point gross margin improvement per year, stepping forward. We continue to do that going forward. What's different than two years ago? Two years ago, we set 80% gross margins. Subi already talked about how steady state was 83 for a subset of our clients.
Our long-term target has increased to 82%, generally because when we set those targets, we didn't understand the benefits that we were going to see from GenAI, and we're absolutely seeing that. And we're living in that. R&D, we're going to decrease R&D by 50 basis points and drive that to that 20% long-term target. And we're going to be more aggressive in G&A, pushing that down 100 basis points, resulting in us having a long-term EBITDA target of 42%. So this was really interesting to me. As we sat down, when we built our mental model about how we were going to do this and we did the acquisition and Enfusion, remember, we talked about gross margin within the Enfusion business growing 800 basis points. We've already yielded through the actions that we did into that in Q2, half of that, 400 of those 800.
And so you would have expected, had you just done the math of kind of gross margin and what the 2024 gross margins are and blend the businesses together, you would have expected 75% in Q2. And we did 77. And we're very happy with that 77%. But we're not satisfied. We have all of these options for additional margin expansion. Now, you might say, hey, wait a second. Are these five items absent number one, which was GenAI, which we didn't really talk about because we didn't know what it would do two years ago? These others are exactly what we said we would do with our business. It's the same road. We're traveling it down again. We have loads of opportunity in automating these operational workflows from talking about the commercial model and building across that. R&D, you might say, wait a second.
Everyone was saying that our R&D spend was doubling and tripling. This is, we have a lead. We're a leader in this marketplace. We want to change the whole industry. And we're leaning into this investment. So you might say, hey, wait a second. How are you getting that incremental margin improvement by reducing R&D as a percentage of revenue? But when you start thinking about this, our growth in R&D spend from 2024 to 2025 is more than our total R&D spend in 2020, which were the numbers we talked about when we were public in 2021. Our growth is greater than the entire accumulation of what we spent in building up the business to go public. We're adding that much this year. And although we'll get margin improvement, we will double again the R&D spend that we're doing.
When you hear these ideas and you hear the connectivity to our clients, you can understand how that's really exciting. G&A, you can see that we had made some progress and then stepped backwards in 2024 as we stepped through this. We're highly focused on bending the cost curve in G&A. I think we understand this. We have incredible scale. We are implementing best-in-class processes across all of the firms and taking a global approach, a singular approach. And over time, we will see significant improvement in that. I think coming out of this, 82% gross margin in the long term, 42% margins in the long term, and that same commitment to margin expansion over time. I think everyone understands, believes, and appreciates the margin expansion story that we have. Sometimes we get questions about stock-based compensation. In 2023, we were getting a lot of those questions.
We said, we're going to stay flat. What did we do from 2023 to 2024? Essentially flat, 108-111. Maybe it's up a little bit. We'll call that flat. But as a percentage of revenue, down almost 5%. This year, with the acquisitions, we did have a step up. We have a variety of different things. It's a much larger business. And so in total dollar terms, it's up to 135 this year. Another step up. We're committing to keeping this flat. As you look to next year, we're saying 135-140. But as a percentage of revenue, lower than 15%. Since 2023 to 2026, we have halved our stock-based compensation as a percentage of revenue. So all of the operating pieces are working very well, all of the EBITDA and to GAAP operating income.
So then that lends you to say, OK, let's talk about leveraging capital allocation then. What do we want to think about? When we announced the acquisitions, when we borrowed the money, we talked about what were our targets. We targeted debt to EBITDA at less than four times by the end of 2025 and less than three times by the end of 2026. That's the commitment we made to you as investors and to our bondholders or debt holders, excuse me. Our forecast debt to trailing 12 months EBITDA as of the end of this year, if you just take what our net debt is and what our target EBITDA, our guided EBITDA for the year, just the trailing 12 months, 3.5 times. We're already 0.5 turn earlier.
I think if you were more representative about that, that excludes all of the synergy for the full 12 months. That excludes all of the acquired businesses. A more representative view might be to say, take your Q4 expected EBITDA and multiply it by 4 because we're kind of through the process. And let's just assume that our net debt was about $800 million at Q2. Let's just assume that that's the same number. Probably be better than that. But let's just assume that's the same number. We're essentially at three times. So we have delivered a full one year earlier than we had articulated to investors. So there's a massive deleveraging story here. How can we do that? We've talked about EBITDA a lot.
We see how that grows, a CAGR of 26% on EBITDA, 26% growth in EBITDA, and even much faster free cash flow growth, 67%. You start looking to 2025 for the full year. You can see how much free cash flow and how much opportunity there is. But let's just speculate a little. Let's look at 2026. So the street. This isn't. We're not talking about 2026. This is just what the street has, $317 million for EBITDA. But if you look back at our history, our CapEx, it's a very light CapEx business. It's 1%-2%. And our change in working capital, maybe it's 2%-4%. And yes, we have debt now, so we have interest. But we have excess free cash flow of somewhere between $210 million and $238 million of excess free cash flow next year.
This enables us to not only do our debt repayment but also makes it available for us to perhaps consider and think about offsetting some of the share dilution that occurred as part of the acquisitions. So let me start with this. We remain fully, full-throatedly committed to bringing leverage below three times by December 31, 2026. But even with that reduced leverage, we're going to be at 3.5 times this year using the trailing 12 months. And that enables us to start to think, could we do a share buyback? And so in 2026, so we're announcing today, and there will be a press release about it right now, announcing $100 million share repurchase authorization.
In 2026, based on the over $200 million of excess free cash flow we have, we have the capacity to both do this share repurchase and pay down debt far exceeding those commitment levels that we had, and we can even start with the 3.5 times we have this year. We could even start now, so with that, that's kind of the financial numbers that we were going through. I don't know if Sandeep would like to come up and say some summary remarks or if we want to turn the lights on and allow for Q&A for a few minutes when we have time available. Thanks, everybody.
Yeah, give it up. Yeah, share buyback.
Yeah, just quickly, I thought I'd say thank you to all of you for your patience here. Last time, we spoke for three hours, and this time, we tried to bring it down to two. Next time we meet, hopefully, it's just about numbers. It can be one hour. But listen, Q&A. I thought we'd give a little time to answer any questions people may have. We also have members of the management team here. So if someone's got a question for Kevin? Head of administration or revenue or whatever.
Oh, do you want to? Thanks. Great. Thank you. And thank you all for doing this. Obviously, very, very helpful. I guess, Sandeep, a couple of things. And I think we need to applaud you for the execution, right? So if you think about relative to the initial expectations in terms of as opposed to two years ago, where was the real upside or in terms of where you were modeling in the business? You meaningfully overperformed relative to your expectations. What was it that came in that much better in an environment that was less than optimal?
Yeah, I think that if you think about it, what we laid out, I think we started to execute in earnest. What a company does very, very well. We know our roles and responsibilities very well. We do a really good job of designing who does what and how, how it works together, having clear scorecards and accountability at each level. And we do that really, really well. So I think that if you just think back, the first thing is our net revenue retention was sky high. I know it doesn't sound like 98% is a big deal. It's a massive deal. When you have that much net revenue retention, gross revenue retention, pardon me, it does well. On the back of NPS, we thought we'd have more trouble with NPS.
It's been 60. We say 60 because we are a little bit concerned about giving you the actual numbers. And that's the truth. We just simply don't want to come up with a number which is much higher and then have to explain two-point movements up and down. So we say 60 because it is consistently above 60. I think the booking and client acceptance has been really, really good. So I just think the market is really wanting a platform like this. I really don't think we are the geniuses in the room. I really believe in my heart. I think we're very good, by the way. But I really believe that architecturally, a single-instance multi-tenant platform just makes sense. And when you go to clients and talk about our model, I don't think one person would say, no, no, no, I think we should have the Siebel workflow.
Not one person will say, let's do the PeopleSoft workflow. Everybody will accept. Clearwater has the right model for the future. How quickly they move, hard to tell. That's our job to go and instigate that movement. But I don't think people will doubt, is this the right way to think about the business? Didn't have the front office, didn't have the risk. Nothing of those pieces. But when I look back, it's also the same team. I think what really also helps us is nothing good about Cindy's still Cindy. We still got Scott here. We got Subi. We got Souvik and Jim and myself. And you learn to work with each other. All of us have our vagaries, believe me. We all look we enjoy working with each other at this point. But it gives you confidence that you can execute. And it's all about execution.
I think the strategic piece. I don't think you can doubt that this is the right way to do it. You really cannot convince yourself or me that this is not the right way to think about it. So then what is it? It's execution. I think we're good at it. We're really good at executing. Even this deleveraging thing Jim talked about, it was three months back. We were talking about 4.4. We're going to take it down to 4. We're going to take it down to 3. And people gave us grief. So, oh, it's not that easy. It's going to take a long time. Integration's hard. Yeah, we executed in Q2 itself in less than two months. We got the synergies that gave us the extra cash to try and bring it down to less than 3.5. We execute. We know how to execute.
So I give a lot of our leadership team a lot of credit for just hardcore execution.
Brian, I think yeah, go ahead.
Thank you. Brian Schwartz from Oppenheimer. Thank you very much for the presentations. It was very informative. You certainly made a lot of news this afternoon. My question is on the monetization path for GenAI. It sounds like your presentation, you're going to infuse GenAI throughout the platform. So if we think about it over a multi-year period, how do you monetize on it? You already have price inflators in your contracts. You have best-in-class retention. So how do you see, again, that monetization path over a multi-year period with GenAI?
Yeah, so generative AI, I'll do that quickly. We invested a lot of money two years back. We continue to invest.
At a high level, the savings in gross margin, which you saw, the 300 basis points difference, that more than pays for what we invest annually. And the savings you get from efficiency is higher than that number. So it comes for free. There really isn't. When I think about generative AI investment, it pays for itself every year. And from that point on, forever. It's not like the margin is going to go down from 77.5% back to 76% if we don't make that investment. That's already occurred. But I do think that there is a whole section of driving gross margin to 82%. And I think that, as Subi said, our steady-state clients are already at 83%. So I think that that is very achievable as long as we continue to use GenAI at Enfusion and Beacon across the platform. That's one.
But I think you missed the point then. I do think what will happen is the business will change. And the example I like to use is about taxi companies. The idea isn't to make your taxi company more efficient in sending a taxi for you. You've got to think about Uber. How do you change the game using generative AI? And so half our effort today goes into efficiency. And that's super important, Brian, because you get payment now. You get the reverse today. But a lot of it goes to what Souvik was showing in his demos. How do you change how hedge funds think? How do you change how asset managers work? Do they become more powerful because they can get and understand risk and make a market faster? Can they grow revenue and profitability? Nobody minds paying you if you can do that for them.
We talk about asset management. We do client reporting. Why do people buy? Because they can get more flow of assets on their platform. So they generate more revenue because they use Clearwater. Then they pay for it. So I do think there are two separate sections. One is about efficiency and how you can do things better. I think we do that really well already. I think that path of getting to you don't see us debate it even. We said, we're going to get to 80%, 82%. Don't worry about it. Frankly, you should not worry about it. That's what we're going to do. It's going to happen. It takes time. It takes a year. It takes two years. We'll try and do it faster than the 50 basis points Jim puts out. But yeah, that will happen. Can we change how the industry works?
Can we make those demos a reality for every asset manager? Yeah, that'll be fun. And I think it'll change the world. But it comes off a single data platform. It comes off being able to learn every minute in near real time. It's not going to happen if you don't have a single platform. So I think we have it. And I think no one else has it. Forget no one else has it. No one's building it. They can't bloody build it. If you've got 50 platforms, some for the front office, some for this, 50 platforms you're going to bring together, yeah, best of luck. Have at it. Sorry. We also have three. We have three. You'll have 50.
Perfect. Thanks, Sandeep. Maybe I think Scott hinted at this as well, too. And there's been a lot of focus on the NRR side of the equation. But as you have more end-to-end capabilities, you can move, maybe, and unlock larger additional segments of the market as well, too. How should we think about the new logo side of the equation?
Yeah, again, I think that you look. I think I've said that to some of you. We have room in our P&L. We don't have to make trades here. There is no need to not say, here is a separate engine, separate GTM team, which goes after new logos. And there's no reason for them to say, oh, can I borrow some resources? No, no, no. You can go invest in this. There's no problem. Go build it. So I think the new logo team should go out and think about growing faster and as quickly as they can. I think on the NRR side is a different story.
We got to 115 and 114 with just LPx, MLx, and Prism. That's it. We have a lot more. We just have a lot, lot more. I don't know what it can do. I still think it's early innings. And I really want the team to be focused on what they were doing before these trades happen. But should we be able to cross-sell effectively? I think so. I'm not quite sure about the magnitude of it. But should the magnitude be on an earlier goal? I think so. But there just isn't a trade. I don't think. I think we talked about hedge fund doubling. Yeah, but we took all the asset management people who were working on Clearwater, jump all those pieces and put it under one so everybody's budget, so to speak, for engineering has gone up dramatically.
We don't want to deliver more EBITDA, frankly. The 200 bps is good enough. And we haven't done a good job of managing that. I know it sounds better to deliver a lot of EBITDA. We don't get any bloody credit for it, just to be very frank, except cash flow generation so you can deliver. So we just feel like we have to go back and invest in every one of these elements. And that's how we think about it.
Thanks. Yun Kim from Loop Capital. Sandeep, so you made those acquisitions. And you have a plan to grow your products across the board, have a pretty aggressive plan to integrate all the products into one single platform, and obviously try to increase your bps from your customers from one to four. What in your sales organization and go-to-market needs to evolve to accommodate that and support that strategy?
Yeah, I think, look, I think I cannot stress this enough. The integrated platform, which comes about, is super interesting. It's not for today. There is a separate group led by a separate team which is building that. I want really the teams to focus on current growth, just incrementally better. That's it. If you were growing at 13, I want you to get to 15. That's it. In phase two, six months out, we'll be talking about growth from high degree of cross-sell, which will be interesting. In 12 months from now, we will be talking about, can I disrupt the whole bloody industry, which will be a lot of fun to talk about. Not today. I want to talk about it. I don't want the operating teams to focus on it.
And so I feel like we have to break it up into these three phases. Otherwise, everyone wants to talk about the new shiny toy. And I'm just uninterested. I think we have to perform in Q3. We have to perform in Q4, Q1 of next year, Q2 of next year. And then we will see beyond that. But I feel like execution is super important not to get carried away with what the future might be, though when we talk, all the excitement is about what we might build. And it is super interesting. I'm not going to deny that. But it's about execution.
OK. Hey, guys. Michael Infante , Morgan Stanley, thanks for all the detail here. I appreciate the disaggregation on the various business lines in the back half of the year. Quite helpful. If we sort of look at the business on a two-year stack basis, sort of still growing in excess of that 20% level, Sandeep, you obviously mentioned having a lot more product to sell this year with the incremental acquisitions. Can you maybe just speak to your relative confidence level in maintaining that 20% medium-term revenue growth outlook? Thanks.
Yeah, I think I just want to be careful that I hope I didn't say this wrong. There are three different pieces here, right? I think the Clearwater business is growing at a certain trajectory. We expect to maintain that. But I don't think Enfusion gets to 20% right away in 2026. I don't expect that. I do expect Enfusion to deliver $20 million of synergy savings, which you have got. I think we have got 400 basis points improvement. And we'll get another 400 basis points in the next 12 months.
So I feel like those are simple. Not simple. We'll execute to it. But we do expect it to take two years to get to Enfusion growing at 20%. And we still believe that. And what are the elements of it? I think we have tried to lay out. Should they be able to cross-sell faster and all that? Those are difficult. I think integration, look, it's not the easiest thing. But I don't want to pretend here like you acquire companies and you bring them together. And it's real simple. It's not. It's pretty complicated stuff. So I don't want to sort of commit to something and not meet it. And so we're looking at us two years back, what we said. We met and exceeded by quite a bit. And we want to be the same way right now.
I do think acquisitions bring. It's not the easiest things to do. And so I've done those before in my life. And you always find things you don't expect. Till now, it's been really good. The synergy was great. The margin expansion, I'm super happy about that we have got there. I think client satisfaction has been really good. I think the churn actually has been lower year on year. So that's the part. You've got to keep churn down. And I think we've been effective in that. So I think, look, it's all good right now. But I don't have the proof points. I don't want to spend a lot of time on it. We've got to go deliver it. And then we'll talk. Go ahead.
Hi. This is Bella on for Alexei from JPMorgan. Thank you for taking our question. Thank you for your layout of your strategy for your recently acquired assets. I think it'd be really helpful for us to understand how successful your prior M&A integration has gone. Could we ask you acquired JUMP and later added Wilshire software? Are you still in the process of integrating JUMP and Wilshire into your platform? And what has the product strategy and roadmap been there?
Yeah, I think they're all a little bit different. And these were incredibly small, I think, acquisitions. But I think it's a good question. Look, Wilshire, what Wilshire does, it does really, really well. And we had said that when we acquired it. It was a very small company. They had great math. But the technology was not good at all. It just had not been invested in a long time.
So what they do with Factor and all that is just sort of superior to anything out there in the market. So I think when Kirat spoke, he spoke about that. Some clients need that. And for some small hedge funds, that's enough. But if you trade derivatives and things like that, it doesn't do a good job at all. And so can you take what Beacon has, pull that together with what Wilshire has, and give a comprehensive view across asset class and countries? Yes. And so I feel it is a fantastic deal for the business, not because we like it. Clients really, really like the ability to get all of it together. So I think the Wilshire deal was really, really good.
I think the JUMP thing, when we got into it, I think I put up a slide which said at market, better than market, and limited capability. I do think when we bought it, we said, look, this is a French asset, which all of its clients are in France. Can we go immediately and make it global? It's not going to happen that quickly. It was a small business. So am I going to sit here and say, oh, we scaled right up? We didn't. We grew France, OK. Then we started to go into the UK and we built it. But it became clear to us it would take a long time before it was a scaled business like Enfusion was. Now, do they both do order management systems? Yes. Do they both do portfolio management? Yes. Do they both?
The point is, it just sounds easy to check boxes till you put it at scale and operating at scale. And so I think they were exactly the right acquisitions for the reason we said. One last one I'll say. We have got 100 people or something like that in France. France as an insurance market is bigger than every other country in Europe, with the sole exception of Germany. And our revenue right now comes mostly out of the U.K. But we now have clients in Germany. We have clients in France. And so therefore, our ability to grow insurance there should be really, really high. And we've had success in France. We've had a really big success in Germany. But beyond that, it is execution. You've got the clients. You've got the names. You've got to go execute. Good. Pete?
Hi. Pete Heckmann with D.A. Davidson. Can you talk a little bit about the role that the fund administrators and prime brokers play in Enfusion's business and how you expect to maybe perhaps change those relationships or broaden those relationships? And then second question would be, we've talked a little bit about the inability because of the lack of a single-instance multi-tenant software platform. But what competitive response have you seen? You're just getting started with Enfusion. But in terms of how the competitors are positioning, I guess, what have you seen so far? And what do you expect to see?
Yeah. So let's talk about Enfusion first and the prime brokers. So they're two different businesses. I think we have to say that to ourselves. When you think about growth, it's growing at 5%. And you want to grow 20%.
So you have to have a different model for inception when hedge funds are formed and a different for replacement. Those are two different businesses. In the first business, I think prime brokers play a very big role. But I do think Enfusion, because of its brand name, sees all of those deals, just who they are. It would be pretty it's like if you have something going on with asset owners and an endowment wants to look at an investment accounting platform, they have to at least include Clearwater. They can't not. So I think that part is quite solved of getting the exposure to all of these opportunities as they arise. And then you've got the second part, which is about driving a motion to convert clients from old software to new software. So I think that is the second motion we have to focus on.
And right now, everyone does everything. And I've always found that when I want something done, I call up Sabine. I'll say, Sabine, I'd like you to do this. Can you get this done? And when I don't want it done, I give it to two people. It doesn't happen. And if I really don't want it done, but I don't want to say no, I give it to three people, one in Hong Kong, one in London, one in the US. They never come back. So the logic is, if you want something done, have a person responsible. Wake up and just do that. And so I feel like the Enfusion's business can sort of grow with those two. Second part of your question, I forgot. I didn't answer.
Any competitive response?
Yeah, competitive response. Look, firstly, we've got to be paranoid. And you will see us very paranoid.
And you'll see us continue to insist that we will invest 21%, 22% of all revenue in R&D, right? But I'm still waiting for Siebel's response to Salesforce. I'm still waiting for PeopleSoft's response to Workday. I don't think it's that easy. I just think it's easy to say, I'll re-architect my whole platform. Well, why haven't they? I think it's very hard. Sorry, I shouldn't have said that. It's not a good thing to say. But that's truth. I think technology change at scale is incredibly hard because of something called installed base. You have a whole bunch of clients who are your clients. And you're going to say, I'm going to desert you and go and build this new platform. And all of you spend the next few years moving. Yeah, it's not an easy sell. It's not an easy sell.
And so I feel, have we seen some responses? Yeah. I think all of them talk about a cloud software, which is wonderful. But do they talk about a single security master ever? Do they talk about a single data ingestion system ever? Do they talk about rolling out 2,000 changes every year? It's just technologically not there. But today, just to push on this a little bit, if you wanted to do Japanese GAAP of a portfolio, you wanted to see a Japanese GAAP view, it's a click, one bloody click. Try doing that with any of the competitors' platform. They'll say, hey, guess what? You go install something for front office, install something for accounting in Japan, and Japan regulatory reporting, best of luck. It is different architecture. It is different technology, I think. Ooh, that was too aggressive. Now, they're very good competition.
And they're thinking about what we do. And they're trying to do something different. Jim, you've got to answer some questions. Finance questions.
Richard Poland from Wells Fargo. So I think with the two-year path to 20% Enfusion growth, you've kind of laid out the three stages of just kind of the integration there. You've given a lot just around the five different pillars behind what drives that growth. I guess if we could just kind of think about if any one of those maybe falls off path. I know with M&A, oftentimes, it's not always perfect, right? But I guess if something like that happens, do you need all five of those pillars to go right to get that to 20% growth? So I think we showed it in one of the charts where we said, how do you get from 13 to 20?
And just like all of our other charts, it adds up to more than 20. And I think that's because we understand not everything goes perfectly. We're frequently surprised, right? And so the idea is, we understand those five pieces. And we have the full expectation that we will be surprised. In fact, here's one positive surprise. The connectivity and the stickiness of combining a Beacon and Enfusion together for those multi-path, large hedge funds, that's really interesting. We didn't expect that. And so that's something, oh, well, that's maybe something to the good. Are there other things to the bad that may not work out the way we expect? Sure. And so I would say that that's Subi mentioned it. She talks about many irons in the fire. We all talk about that. And that's the idea. There's five paths to get to that.
We expect to be able to do that through any variation of those.
Yeah, we have one of our board members here, Cary, and all of our board decks end with this picture of irons in the fire. Because I think you can't predict. Things are not going to work. If you're going to execute well, guess what? Some stuff's not going to work. And if you're aiming for precision in everything to go out and execute to your model, you're going to fail. And so our model has always been try and aim for higher, commit to a slightly lower thing. Sometimes it does well. Look, the marginal did well because GenAI has just had a big impact. It's just that.
Just to give you a data point, last year, June of last year and June of this year, if you look at employee count in core Clearwater, it went up 1%. One. Revenue went up whatever it did. 1% growth. Yeah, all that flows into the margin. There's good news, just somewhat unanticipated two years back. And so I think you were talking about GenAI. Brian was talking about GenAI's impact. Yeah, forget everything else. Literally, 1% growth in employee headcount in the last 12 months. OK. Sorry, did you have any?
So I think we're any last questions?
Time for one last question. One more question. Anyone has any other?
All right.
Thank you, all there. Look, I really appreciate it. Thank you very much. Thank you for coming.
Thanks. Thanks so much.