Clearwater Analytics Announces First Quarter 2026 Financial ResultsMay 7, 2026
Quarterly Revenue of $221.2 Million, Up 74% Year-Over-Year Annualized Recurring Revenue of $872 Million, Up 77% Year-Over-Year Adjusted EBITDA of $77.4 Million, Up 72% Year-Over-Year
BOISE, Idaho, May 07, 2026--(BUSINESS WIRE)--Clearwater Analytics Holdings, Inc. (NYSE: CWAN) ("CWAN" or the "Company"), the most comprehensive technology platform for investment management, today announced its financial results for the quarter ended March 31, 2026.
"We delivered a strong start to 2026 with Q1 revenue of $221.2 million, up 74% year-over-year. GenAI tools are woven into the fabric of our organization, enabling both technical and non-technical employees to deliver internal automation and new products at unprecedented speeds," said Sandeep Sahai, CEO at CWAN. "This is enabling strong profitability with Non-GAAP Gross Profit growing 73% year-over-year to a record $172.7 million. Adjusted EBITDA grew 71.8% year-over-year to $77.4 million, reaching a near-record margin of 35%."
"Now that we have completed a full year since acquiring Enfusion, Beacon, and Bistro, we are seeing clear validation of the strategic rationale we presented," continued Sahai. "CWAN’s comprehensive front‑to‑back platform continues to resonate with clients and is influencing investment management workflows worldwide. The strength of our product portfolio, the expertise of our teams, and the scale of our offerings provide a robust foundation for CWAN’s continued leadership in rapid development and commercialization of best‑in‑class technologies."
First Quarter 2026 Financial Results Summary
Revenue: Total revenue for the first quarter of 2026 was $221.2 million, an increase of 74%, from $126.9 million in the first quarter of 2025.
Gross Profit: Gross profit for the first quarter of 2026 increased to $145.5 million, which equates to a 65.8% GAAP gross margin, compared with gross profit of $92.9 million and GAAP gross margin of 73.3% in the first quarter of 2025. Non-GAAP gross profit for the first quarter of 2026 was $172.7 million, which equates to a 78.1% non-GAAP gross margin, compared with non-GAAP gross profit of $100.1 million and non-GAAP gross margin of 78.9% in the first quarter of 2025.
Net Income/(Loss): Net loss for the first quarter of 2026 was $2.8 million, compared with net income of $6.5 million in the first quarter of 2025. Non-GAAP net income for the first quarter of 2026 increased to $48.6 million, an increase of 39.5% from $34.9 million in the first quarter of 2025.
Adjusted EBITDA: Adjusted EBITDA for the first quarter of 2026 was $77.4 million, an increase of 72%, from $45.1 million in the first quarter of 2025. Adjusted EBITDA margin for the first quarter of 2026 was 35.0%, an increase from 34.1% in the fourth quarter of 2025.
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Cash Flows: Operating cash flows for the first quarter of 2026 were $17.7 million. Free cash flows for the first quarter of 2026 were $11.2 million.
Net Loss Per Share and Non-GAAP Net Income Per Share: Net loss per basic and diluted share was $0.01 in the first quarter of 2026. Non-GAAP net income per basic and diluted share was $0.16 in the first quarter of 2026, an increase of 23% compared to Q1 of 2025.
Cash, cash equivalents, and investments were $81.5 million as of March 31, 2026. Total debt, net of debt issuance cost, was $806.4 million as of March 31, 2026.
First Quarter 2026 Key Metrics Summary
Annualized Recurring Revenue: As of March 31, 2026, annualized recurring revenue ("ARR") reached $872 million, an increase of 77% from $494 million as of March 31, 2025.
ARR is calculated at the end of a period by dividing the recurring revenue in the last month of such period by the number of days in the month and multiplying by 365. Gross Revenue Retention Rate: As of March 31, 2026, the gross revenue retention rate was 97%.
Gross revenue retention rate represents annual contract value ("ACV") at the beginning of the 12-month period ended on the reporting date less client attrition over the prior 12-month period, divided by ACV at the beginning of the 12-month period, expressed as a percentage. ACV is comprised of annualized recurring revenue plus contracted-not-billed revenue, which represents the estimated annual contracted revenue for new and existing client opportunities prior to revenue recognition. Net Revenue Retention Rate: As of March 31, 2026, the net revenue retention rate was 108%.
Net revenue retention rate is the percentage of recurring revenue from clients on the platform for 12 months and includes changes from the addition, removal, or value of assets on our platform, contractual changes that have an impact to annualized recurring revenues and lost revenue from client attrition.
Recent Business Highlights
On December 20, 2025, the Company entered into an Agreement and Plan of Merger to be acquired in a transaction (the "Proposed Transaction") valued at approximately $8.4 billion by a Permira and Warburg Pincus-led investor group, with participation from Temasek, and key support from Francisco Partners (collectively, the "Investor Group"). Under the terms of the agreement, Company stockholders will receive $24.55 per share in cash upon completion of the Proposed Transaction.
On May 6, 2026, CWAN shareholders voted to adopt the Agreement and Plan of Merger, approving the Company’s acquisition by the Investor Group.
CWAN has now obtained all required regulatory approvals for the proposed acquisition, except for the Australia Foreign Investment Review Board ("FIRB") approval. An FIRB application was submitted in the second quarter of 2026. Subject to the approval by the Australian Treasurer pursuant to the FIRB approval process and the satisfaction or waiver of other customary closing conditions, CWAN currently expects to close the Proposed Transaction in the second quarter of 2026.
Orange Investment Advisors successfully implemented Enfusion by CWAN to modernize its front‑to‑back investment operations across structured credit. The unified PMS, OMS, and execution platform—combined with Clearwater’s Beacon analytics—provides real‑time data, enhanced transparency, and faster, more accurate reporting. The deployment streamlines workflows across front, middle, and back office, reducing manual reconciliation and improving client responsiveness.
Dunamis Asset Management, an onshore Korean hedge fund manager that has also recently expanded to Hong Kong, was recently onboarded; they selected Enfusion by Clearwater to support its domestic and international operations. As a recognized global leader in Korea’s hedge fund ecosystem, Dunamis required a comprehensive platform for order execution, position management, risk management, and operational transparency, including seamless shadow accounting and control-level reconciliation with fund administrators, prime brokers and allocators. They chose Enfusion by Clearwater for its established presence in the Asia-Pacific region and proven success enabling international growth. This client win underscores how sophisticated hedge fund managers increasingly rely on Clearwater Analytics to accelerate global expansion.
Earnings Conference Call and Guidance
As a result of the execution of a definitive agreement under which the Investor Group will acquire all of the outstanding shares of the Company's common stock in an all-cash transaction, as announced on December 21, 2025, the Company will not host an earnings conference call or webcast to discuss its first quarter 2026 financial results nor provide forward-looking guidance.
About CWAN
CWAN (NYSE: CWAN) is transforming investment management with the industry’s most comprehensive cloud-native platform for institutional investors across global public and private markets. While legacy systems create risk, inefficiency, and data fragmentation, CWAN’s single-instance, multi-tenant architecture delivers real-time data and AI-driven insights throughout the investment lifecycle. The platform eliminates information silos by integrating portfolio management, trading, investment accounting, reconciliation, regulatory reporting, performance, compliance, and risk analytics in one unified system. Serving leading insurers, asset managers, hedge funds, banks, corporations, and governments, CWAN supports over $10 trillion in assets globally. Learn more at www.cwan.com.
Use of non-GAAP Information
This press release contains certain non-GAAP measures, including non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP effective tax rate, diluted non-GAAP share count and free cash flow.
The non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. However, the Company believes that this non-GAAP information is useful as an additional means for investors to evaluate its operating performance, when reviewed in conjunction with its GAAP financial statements. These measures should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP, and because these amounts are not determined in accordance with GAAP, they should not be used exclusively in evaluating the Company's business and operations. In addition, undue reliance should not be placed upon non-GAAP or operating information because this information is neither standardized across companies nor subjected to the same control activities and audit procedures that produce the Company's GAAP financial results.
The Company's non-GAAP statement of operations measures, including non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP effective tax rate, diluted non-GAAP share count and free cash flow, are adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items that management believes are not indicative of its ongoing operations. These adjusted measures exclude the impact of share-based compensation and eliminate potential differences in results of operations between periods caused by factors such as financing and capital structures, taxation positions or regimes, restructuring, transaction expenses, impairment and other charges. Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP.
Use of Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include information concerning the Company's expectations with respect to the proposed transaction, including the timing thereof, and the Company’s possible or assumed future results of operations, business strategies, technology developments, financing and investment plans, dividend policy, competitive position, industry, economic and regulatory environment, potential growth opportunities and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "aim," "may," "plan," "potential," "predict," "project," "seek," "should," "will," "would" or similar expressions and the negatives of those terms, but are not the exclusive means of identifying such statements.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors, many of which are beyond the Company’s control, that may cause the Company’s actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties may cause actual results to differ materially from the Company’s current expectations and include, but are not limited to: (A) risks related to the Proposed Transactions, including (i) the risk that the Proposed Transaction may not be completed in a timely manner or at all; (ii) the possibility that any or all of the various conditions to the consummation of the Proposed Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the Proposed Transaction, including in circumstances which would require the Company to pay a termination fee; (iv) the effect of the announcement or pendency of the Proposed Transaction on the Company’s ability to attract, motivate or retain key executives and associates, its ability to maintain relationships with its customers, vendors, service providers and others with whom it does business, or its operating results and business generally; (v) risks related to the Proposed Transaction diverting management’s attention from the Company’s ongoing business operations; (vi) the risk of shareholder litigation in connection with the Proposed Transaction, including resulting expense or delay; (vii) certain restrictions during the pendency of the Proposed Transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; (viii) risks that the anticipated benefits of the Proposed Transaction are not realized when and as expected; (ix) the availability of capital and financing and rating agency actions in connection with the Proposed Transaction; (B) ongoing risks such as those related to (i) the Company’s ability to successfully integrate the operations and technology of its acquisitions of Enfusion, Beacon and Bistro (the "Acquisitions") with those of the Company and to obtain third party data rights, retain and incentivize the employees of the Acquisitions following the close of the Acquisitions, retain the Acquisitions’ clients, repay debt incurred in connection with the Acquisitions and meet financial covenants to be imposed in connection with such debt; (ii) risks that synergies and growth from the Acquisitions may not be fully realized or may take longer to realize than expected, (iii) the Company's ability to keep pace with rapid technological change and market developments, including artificial intelligence, (iv) competitors in its industry, (v) the possibility that market volatility, a downturn in economic conditions or other factors may cause negative trends or fluctuations in the value of the assets on the Company’s platform, (vi) the Company's ability to manage growth, (vii) the Company’s ability to attract and retain skilled employees, (viii) the possibility that the Company’s solutions fail to perform properly, (ix) disruptions and failures in the Company's and third parties’ computer equipment, cloud-based services, electronic delivery systems, networks and telecommunications systems and infrastructure, (x) the failure to protect the Company, its customers’ and/or its vendors’ confidential information and/or intellectual property, claims of infringement of others’ intellectual property, (xi) factors related to the Company's ownership structure; and (C) other risks and uncertainties detailed in the Company’s periodic public filings with the SEC, including but not limited to those discussed under "Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed on February 18, 2026 (as amended by Amendment No. 1 thereto, filed with the SEC on April 1, 2026), and in other periodic reports filed by the Company with the SEC. These filings are available at www.sec.gov and on the Company’s website.
Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent management’s beliefs and assumptions only as of the date of this press release and should not be relied upon as representing the Company’s expectations or beliefs as of any date subsequent to the time they are made. The Company does not undertake to and specifically declines any obligation to update any forward-looking statements that may be made from time to time by or on behalf of the Company.
Clearwater Analytics Holdings, Inc. Consolidated Balance Sheets (In thousands, except share amounts and per share amounts, unaudited) March 31 December 31 2026 2025 Assets Current assets: Cash and cash equivalents $ 81,507 $ 91,245 Accounts receivable, net 169,630 167,348 Prepaid expenses and other current assets 43,107 36,977 Total current assets 294,244 295,570 Property, equipment and software, net 30,454 26,607 Operating lease right-of-use assets, net 51,639 34,300 Deferred contract costs, non-current 11,044 13,017 Debt issuance costs - line of credit 3,268 3,467 Deferred tax assets, net 702,300 695,998 Intangible assets, net 660,650 687,578 Goodwill 1,268,440 1,270,056 Other non-current assets 4,816 5,336 Total assets $ 3,026,855 $ 3,031,929 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 1,630 $ 4,096 Accrued expenses and other current liabilities 78,605 112,249 Notes payable, current portion 8,000 8,000 Deferred revenue 28,027 21,860 Operating lease liability, current portion 14,210 15,138 Total current liabilities 130,472 161,343 Notes payable, less current maturities and unamortized debt issuance costs 798,399 814,643 Operating lease liability, less current portion 40,228 22,555 Other long-term liabilities 3,194 2,296 Total liabilities 972,293 1,000,837 Stockholders' Equity Class A common stock, par value $0.001 per share; 1,500,000,000 shares authorized, 297,249,547 shares issued and outstanding as of March 31, 2026, 291,426,648 shares issued and outstanding as of December 31, 2025 297 291 Class B common stock, par value $0.001 per share; 500,000,000 shares authorized, 1,113,136 share issued and outstanding as of March 31, 2026; and 2,017,754 share issued and outstanding as of December 31, 2025 1 2 Class C common stock, par value $0.001 per share; 500,000,000 shares authorized, no share issued and outstanding as of March 31, 2026 and December 31, 2025 — — Class D common stock, par value $0.001 per share; 500,000,000 shares authorized, no share issued and outstanding as of March 31, 2026 and December 31, 2025 — — Additional paid-in-capital 1,784,861 1,754,387 Accumulated other comprehensive income 2,777 7,089 Retained earnings 261,564 259,963 Total stockholders' equity attributable to Clearwater Analytics Holdings, Inc. 2,049,500 2,021,732 Non-controlling interests 5,062 9,360 Total stockholders' equity 2,054,562 2,031,092 Total liabilities and stockholders' equity $ 3,026,855 $ 3,031,929
Clearwater Analytics Holdings, Inc. Consolidated Statements of Operations (In thousands, except share amounts and per share amounts, unaudited) Three Months Ended
March 31, 2026 2025 Revenue $ 221,228 $ 126,864 Cost of revenue(1) 75,681 33,924 Gross profit 145,547 92,940 Operating expenses: Research and development(1) 57,050 37,400 Sales and marketing(1) 46,241 19,631 General and administrative(1) 33,266 28,827 Total operating expenses 136,557 85,858 Income from operations 8,990 7,082 Interest expense 12,646 919 Other income, net (51 ) (2,323 ) Income (loss) before income taxes (3,605 ) 8,486 Provision for (benefit from) income taxes (809 ) 1,550 Net income (loss) (2,796 ) 6,936 Less: Net income (loss) attributable to non-controlling interests (20 ) 426 Net income (loss) attributable to Clearwater Analytics Holdings, Inc. $ (2,776 ) $ 6,510 Net income (loss) per share attributable to Class A and Class D common stockholders stock: Basic $ (0.01 ) $ 0.03 Diluted $ (0.01 ) $ 0.03 Weighted average shares of Class A and Class D common stock outstanding: Basic 294,989,154 237,324,564 Diluted 294,989,154 246,212,517
(1) Amounts include equity-based compensation as follows: Cost of revenue $ 4,323 $ 3,464 Operating expenses: Research and development 7,065 8,698 Sales and marketing 8,793 4,009 General and administrative 8,394 7,541 Total equity-based compensation expense $ 28,575 $ 23,712
Clearwater Analytics Holdings, Inc. Consolidated Statements of Cash Flows (In thousands, unaudited) Three Months Ended March 31, 2026 2025 OPERATING ACTIVITIES Net income (loss) $ (2,796 ) $ 6,936 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 29,557 3,146 Noncash operating lease cost 4,123 2,375 Equity-based compensation 28,575 23,712 Amortization of deferred contract acquisition costs 3,121 1,350 Amortization of debt issuance costs, included in interest expense 954 69 Provision for bad debt 216 — Deferred tax (benefit) expense (2,000 ) 1,250 Accretion of discount on investments — (284 ) Realized gain on investments — (112 ) Gain on disposal of fixed assets (80 ) — Changes in operating assets and liabilities, net of acquisitions: Accounts receivable, net (2,498 ) (5,296 ) Prepaid expenses and other assets (4,078 ) (2,576 ) Deferred contract acquisition costs (3,006 ) 7 Accounts payable (2,458 ) (918 ) Accrued expenses and other liabilities (32,824 ) (5,124 ) Tax receivable agreement liability — (35 ) Other long-term liabilities 869 — Net cash provided by operating activities 17,675 24,500 INVESTING ACTIVITIES Purchases of property, equipment and software (6,440 ) (1,468 ) Purchase of held to maturity investments — (4,686 ) Proceeds from sale of available-for-sale investments — 89,479 Proceeds from maturities of investments — 16,200 Net cash (used in) provided by investing activities (6,440 ) 99,525 FINANCING ACTIVITIES Taxes paid related to net share settlement of equity awards (2,248 ) (24,402 ) Repayments of borrowings (17,000 ) (688 ) Payment of debt issuance costs — (2,159 ) Net cash used in financing activities (19,248 ) (27,249 ) Effect of exchange rate changes on cash and cash equivalents (1,725 ) 1,033 Change in cash and cash equivalents during the period (9,738 ) 97,809 Cash and cash equivalents, beginning of period 91,245 177,350 Cash and cash equivalents, end of period $ 81,507 $ 275,159 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest $ 21,708 $ 1,282 Cash paid for income taxes $ 1,154 $ 583 NON-CASH INVESTING AND FINANCING ACTIVITIES Purchase of property, equipment and software included in accounts payable and accrued expense $ 202 $ 64 Tax distributions payable to Continuing Equity Owners included in accrued expenses $ — $ 29 Acquisition of intangible assets paid in common stock $ — $ 102,729 Acquisition holdback liability included in accrued expenses and other liabilities $ — $ 10,000
Clearwater Analytics Holdings, Inc. Reconciliation of Net Income (Loss) to Adjusted EBITDA (In thousands, unaudited) Three Months Ended March 31, 2026 2025 (in thousands, except percentages) Net income (loss) $ (2,796 ) (1 %) $ 6,936 5 % Adjustments: Interest expense 12,646 5 % 919 1 % Depreciation and amortization 29,557 13 % 3,146 2 % Equity-based compensation expense and related payroll taxes 32,827 15 % 27,562 22 % Transaction expenses(1) 6,051 3 % 7,280 6 % Provision for (benefit from) income taxes (809 ) % 1,550 1 % Other income, net (51 ) % (2,323 ) (2 %) Adjusted EBITDA $ 77,425 35 % $ 45,070 35 % Revenue $ 221,228 100 % $ 126,864 100 % (1) Transaction expenses primarily consist of professional fees and administrative costs for the Proposed Transaction and closed acquisitions.
Clearwater Analytics Holdings, Inc. Reconciliation of Free Cash Flow (In thousands, unaudited) Three Months Ended March 31, 2026 2025 Net cash provided by operating activities $ 17,675 $ 24,500 Less: Purchases of property, equipment and software 6,440 1,468 Free Cash Flow $ 11,235 $ 23,032
Clearwater Analytics Holdings, Inc. Reconciliation of Non-GAAP Information (In thousands, except share amounts and per share amounts, unaudited) Three Months Ended March 31, 2026 2025 Revenue $ 221,228 $ 126,864 Gross profit $ 145,547 $ 92,940 Adjustments: Equity-based compensation expense and related payroll taxes 5,182 4,374 Depreciation and amortization 21,995 2,764 Gross profit, non-GAAP $ 172,724 $ 100,078 As a percentage of revenue, non-GAAP 78 % 79 % Cost of Revenue $ 75,681 $ 33,924 Adjustments: Equity-based compensation expense and related payroll taxes 5,182 4,374 Depreciation and amortization 21,995 2,764 Cost of revenue, non-GAAP $ 48,504 $ 26,786 As a percentage of revenue, non-GAAP 22 % 21 % Research and development $ 57,050 $ 37,400 Adjustments: Equity-based compensation expense and related payroll taxes 8,390 9,827 Depreciation and amortization 753 122 Research and development, non-GAAP $ 47,907 $ 27,451 As a percentage of revenue, non-GAAP 22 % 22 % Sales and marketing $ 46,241 $ 19,631 Adjustments: Equity-based compensation expense and related payroll taxes 10,132 5,000 Depreciation and amortization 6,297 153 Sales and marketing, non-GAAP $ 29,812 $ 14,478 As a percentage of revenue, non-GAAP 13 % 11 % General and administrative $ 33,266 $ 28,827 Adjustments: Equity-based compensation expense and related payroll taxes 9,123 8,361 Depreciation and amortization 512 107 Transaction expenses 6,051 7,280 General and administrative, non-GAAP $ 17,580 $ 13,079 As a percentage of revenue, non-GAAP 8 % 10 % Income from operations $ 8,990 $ 7,082 Adjustments: Equity-based compensation expense and related payroll taxes 32,827 27,562 Depreciation and amortization 29,557 3,146 Transaction expenses 6,051 7,280 Income from operations, non-GAAP $ 77,425 $ 45,070 As a percentage of revenue, non-GAAP 35 % 36 % Net income (loss) $ (2,796 ) $ 6,936 Adjustments: Equity-based compensation expense and related payroll taxes 32,827 27,562 Depreciation and amortization 29,557 3,146 Transaction expenses 6,051 7,280 Tax impacts of adjustments to net income (loss) (1) (17,017 ) (10,069 ) Net income, non-GAAP $ 48,622 $ 34,855 As a percentage of revenue, non-GAAP 22 % 27 % Net income per share - basic, non-GAAP $ 0.16 $ 0.15 Net income per share - diluted, non-GAAP $ 0.16 $ 0.13 Weighted average common shares outstanding - basic 294,989,154 237,324,564 Weighted average common shares outstanding - diluted 303,076,722 258,754,627 (1) The non-GAAP effective tax rate was 25% for the three months ended March 31, 2026 and 2025, respectively, and has been used to adjust the provision for income taxes for non-GAAP net income and non-GAAP basic and diluted net income per share.
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Contacts
Investor Contact:
Kamil Mielczarek | +1 208-510-6856 | investors@cwan.com
Media Contact:
Claudia Cahill | +1 703-728-1221 | press@cwan.com
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Stocks Steady Before the Open as Investors Await U.S.-Iran Updates; Earnings and Economic Data on TapMay 7, 2026
June S&P 500 E-Mini futures (ESM26) are up +0.03%, andJune Nasdaq 100 E-Mini futures (NQM26) are down -0.01% this morning as investors await the outcome of diplomatic efforts aimed at ending the Iran war.
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The price of WTI crude fell over -2% on Thursday after Saudi news outlet Al Arabiya reported that negotiations to gradually reopen the Strait are underway and that a breakthrough could come in the coming hours. The 10-year T-note yield fell one basis point to 4.34% as inflation expectations eased.
Market participants are also awaiting a new round of U.S. economic data and corporate earnings reports, along with comments from Federal Reserve officials.
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The ADP National Employment report released on Wednesday showed that U.S. private nonfarm payrolls rose by 109K in April, slightly weaker than expectations of 118K.
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“The labor market has been on a solid but precarious footing for some time, not exactly growing but also not significantly deteriorating,” said Elizabeth Renter, senior economist at NerdWallet.
St. Louis Fed President Alberto Musalem said on Wednesday that there is considerable uncertainty over the future path of the economy and monetary policy, but he sees risks tilting more toward inflation than toward employment. “Inflation is running meaningfully above our target of 2%,” Musalem said. Separately, Chicago Fed President Austan Goolsbee cautioned against reflexively cutting interest rates in response to stronger productivity growth, noting that such a trend can sometimes fuel inflation.
Meanwhile, U.S. rate futures have priced in a 94.2% probability of no rate change and a 5.8% chance of a 25 basis point rate cut at the conclusion of the Fed’s June meeting.
First-quarter corporate earnings season continues, with notable companies such as McDonald’s (MCD), Gilead Sciences (GILD), Cloudflare (NET), Airbnb (ABNB), Monster Beverage (MNST), and CoreWeave (CRWV) slated to release their quarterly results today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +12% increase in quarterly earnings for Q1 compared to the previous year, marking the sixth consecutive quarter of double-digit growth.
On the economic data front, investors will focus on U.S. Initial Jobless Claims data, set to be released in a couple of hours. Economists expect this figure to be 205K, compared to last week’s number of 189K.
U.S. Unit Labor Costs and Nonfarm Productivity preliminary data will also be closely watched today. Economists forecast Q1 Unit Labor Costs to rise +2.6% q/q and Nonfarm Productivity to rise +0.7% q/q, compared to the fourth-quarter numbers of +4.4% q/q and +1.8% q/q, respectively.
The U.S. Construction Spending report for March will come in today. Notably, the release will also incorporate the February figures. Economists expect construction spending to rise +0.3% m/m in March.
The Fed’s Consumer Credit report will be released today as well. Economists project the U.S. Consumer Credit to be $12.5 billion in March, compared to the previous figure of $9.5 billion.
In addition, market participants will hear perspectives from Minneapolis Fed President Neel Kashkari, Cleveland Fed President Beth Hammack, and New York Fed President John Williams throughout the day.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.34%, down -0.28%.
The Euro Stoxx 50 Index is up +0.05% this morning as investors await updates on a potential U.S.-Iran peace agreement and digest a wave of corporate earnings reports. U.S. President Donald Trump said on Wednesday that the Iran war has “a very good chance of ending” and that it’s “possible” it could end before his trip to Beijing next week, according to an interview with PBS News Hour. Luxury, travel, and automobile stocks led the gains on Thursday. At the same time, food and beverage stocks slumped, weighed down by a more than -12% plunge in Campari (CPR.M.DX) after the spirits group reported weaker-than-expected Q1 revenue. Utility stocks also sank. Data from Eurostat released on Thursday showed that Eurozone monthly retail sales declined in March, with weakening consumer sentiment tied to the Middle East conflict suggesting demand could soften further in the months ahead. Separately, data showed that Germany’s monthly factory orders jumped in March, signaling possible front-loading of orders to manage rising energy prices and supply disruptions that followed the start of the Middle East conflict. Meanwhile, Norway’s central bank unexpectedly raised its policy rate by 25 basis points to 4.25% on Thursday to curb inflation pressures fueled by robust wage growth and high energy costs. “Inflation is too high and has run above target for several years,” said Norges Governor Ida Wolden Bache in a statement. Sweden’s central bank kept its key policy rate unchanged at 1.75%, as expected, but said it remains vigilant and is ready to act swiftly if the Middle East conflict pushes inflation higher or weighs on economic growth. European Central Bank Governing Council member Francois Villeroy de Galhau said on Thursday that the ECB cannot commit to raising its key rate at its June meeting, and that its decisions will instead be guided by evidence of shifts in the economy. In other corporate news, Shell (SHEL.LN) fell over -2% after the oil major reported solid Q1 profit but cautioned about reduced gas production due to the Middle East conflict and launched a smaller buyback than in prior quarters. At the same time, Zealand Pharma (ZEAL.C.DX) surged more than +16% after reporting better-than-expected Q1 results.
Germany’s Factory Orders and Eurozone’s Retail Sales data were released today.
The German March Factory Orders rose +5.0% m/m, stronger than expectations of +1.0% m/m.
Eurozone’s March Retail Sales fell -0.1% m/m and rose +1.2% y/y, stronger than expectations of -0.3% m/m and +1.0% y/y.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.48%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +5.58%.
China’s Shanghai Composite Index closed higher today amid optimism that the U.S. and Iran were close to reaching a deal to end their conflict. 5G communication stocks outperformed on Thursday. Liquor stocks also advanced. Limiting gains, energy stocks sank as oil prices dropped for a third straight day. The Wall Street Journal reported that the U.S. and Iran are working with mediators on a framework to resume negotiations that could end the conflict and reopen the Strait of Hormuz. Lloyd Chan, senior currency analyst at MUFG, said, “Signs continue to point to limited appetite for further escalation in the Middle East.” Meanwhile, China’s tourism sector recorded an increase in trips during the Labor Day holidays, although official data released the day after the five-day break did not include spending figures that typically provide a fuller picture of consumption over the period. In other news, The Wall Street Journal reported on Wednesday that Washington and Beijing are considering the launch of formal talks on AI. Market watchers are closely monitoring U.S.-China developments as U.S. President Donald Trump is scheduled to meet Chinese President Xi Jinping next week during his first visit to China in eight years. In corporate news, BeOne Medicines gained over +3% after the drugmaker reported a jump in its Q1 earnings.
Japan’s Nikkei 225 Stock Index closed sharply higher today as markets reopened after a holiday break, with investors playing catch-up to a global equities rally fueled by robust technology earnings and signs of a potential peace agreement in the Middle East. Oil prices held their previous session’s losses on speculation that a U.S.-Iran agreement would help restore oil shipments through the vital Strait of Hormuz. Takashi Ito, senior strategist at Nomura Securities, said, “Lower oil prices are significant for companies, as even a modest easing of inflation can provide meaningful relief.” Technology stocks led the gains on Thursday, with SoftBank Group jumping over +18% on renewed confidence in the AI trade. Mining, industrial, and financial stocks also climbed. The benchmark index closed above the 62,000 mark for the first time. It also posted its largest daily percentage gain since April 2025. Meanwhile, minutes of the Bank of Japan’s March meeting released on Thursday showed that many board members believed interest rates may need to be raised if the energy shock driven by the Iran war persists and triggers concerns about second-round effects on broader inflation. One member said the BOJ should raise rates “without long intervals,” while another stated the central bank would need to tighten “without hesitation” if the economy showed no signs of weakening from the conflict. Elsewhere, Japan’s top currency diplomat, Atsushi Mimura, said on Thursday that the country faces no limits on how frequently it can intervene in currency markets and remains in daily contact with U.S. authorities, underscoring Tokyo’s readiness to step in to support the yen. In corporate news, TOTO Ltd. rose over +4% as investors continued to pour into the stock, reassessing the toilet maker as a stealth AI play given its critical role in the semiconductor supply chain. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -5.40% to 37.64.
Pre-Market U.S. Stock Movers
Fortinet (FTNT) surged more than +15% in pre-market trading after the cybersecurity vendor posted upbeat Q1 results and raised its full-year revenue guidance.
DoorDash (DASH) climbed about +10% in pre-market trading after the food-delivery app reported better-than-expected Q1 EPS.
AppLovin (APP) rose more than +3% in pre-market trading after the mobile advertising platform reported stronger-than-expected Q1 results and issued above-consensus Q2 revenue guidance.
Arm Holdings (ARM) slumped over -6% in pre-market trading after CEO Rene Haas cautioned about weakness in the smartphone industry, denting a vital source of the company’s revenue.
Fastly (FSLY) plummeted more than -21% in pre-market trading despite the cloud computing company posting strong Q1 results and raising its full-year guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - May 7th
McDonald’s (MCD), Gilead Sciences (GILD), Howmet Aerospace (HWM), McKesson (MCK), Cloudflare (NET), Airbnb (ABNB), Monster Beverage (MNST), CoreWeave (CRWV), Motorola Solutions (MSI), Republic Services (RSG), Ubiquiti (UI), Sempra (SRE), Wheaton Precious Metals (WPM), W.W. Grainger (GWW), Microchip Technology (MCHP), Cheniere Energy (LNG), Vistra (VST), Targa Resources (TRGP), Coinbase Global (COIN), Datadog (DDOG), Zoetis (ZTS), Rocket Lab (RKLB), Rocket Companies (RKT), Block (XYZ), Becton, Dickinson and Company (BDX), Consolidated Edison (ED), Kenvue (KVUE), Cheniere Energy Partners (CQP), Natera (NTRA), Insmed (INSM), Tapestry (TPR), Expedia Group (EXPE), Mettler-Toledo International (MTD), MACOM Technology Solutions Holdings (MTSI), Formula One Group (FWONA), Formula One Group (FWONK), Affirm Holdings (AFRM), US Foods Holding (USFD), Corpay (CPAY), Evergy (EVRG), Viatris (VTRS), The Carlyle Group (CG), Akamai Technologies (AKAM), Toast (TOST), Warner Music Group (WMG), News Corporation (NWS), News Corporation (NWSA), Lamar Advertising Company (LAMR), Reinsurance Group of America (RGA), Applied Optoelectronics (AAOI), BridgeBio Pharma (BBIO), MP Materials (MP), Globus Medical (GMED), HubSpot (HUBS), DraftKings (DKNG), Guardant Health (GH), Gen Digital (GEN), Unity Software (U), The Trade Desk (TTD), Wynn Resorts (WYNN), Arrowhead Pharmaceuticals (ARWR), Essential Utilities (WTRG), Texas Roadhouse (TXRH), Bentley Systems (BSY), Arrow Electronics (ARW), American Healthcare REIT (AHR), Allegro MicroSystems (ALGM), Charles River Laboratories International (CRL), CareTrust REIT (CTRE), StandardAero (SARO), ESCO Technologies (ESE), Celsius Holdings (CELH), Vaxcyte (PCVX), Installed Building Products (IBP), Lincoln National (LNC), Clearwater Analytics Holdings (CWAN), Primo Brands (PRMB), GATX Corporation (GATX), The Middleby Corporation (MIDD), JFrog (FROG), Clearway Energy (CWEN), ESAB Corporation (ESAB), USA Rare Earth (USAR), Century Aluminum Company (CENX), Nexstar Media Group (NXST), Dropbox (DBX), Loar Holdings (LOAR), Genpact (G), EPAM Systems (EPAM), Blackstone Secured Lending Fund (BXSL), Scholar Rock Holding (SRRK), Xenon Pharmaceuticals (XENE), OUTFRONT Media (OUT), Paylocity Holding (PCTY), HA Sustainable Infrastructure Capital (HASI), Lantheus Holdings (LNTH), PTC Therapeutics (PTCT), Lyft, Inc. (LYFT), Teleflex (TFX), Diodes (DIOD), MarketAxess Holdings (MKTX), Opendoor Technologies (OPEN), BGC Group (BGC), Planet Fitness (PLNT), Main Street Capital (MAIN), Nelnet (NNI), Vontier (VNT), Axcelis Technologies (ACLS), Post Holdings (POST), Fortune Brands Innovations (FBIN), Ligand Pharmaceuticals (LGND), MDU Resources Group (MDU), NuScale Power (SMR), Crinetics Pharmaceuticals (CRNX), ACI Worldwide (ACIW), Power Integrations (POWI), Griffon (GFF), International Seaways (INSW), WillScot Holdings (WSC), Synaptics (SYNA), Trex Company (TREX), Shake Shack (SHAK), Kontoor Brands (KTB), SoundHound AI (SOUN), RingCentral (RNG).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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