Guidewire Software, Inc. GWRE reported fourth-quarter results above analyst estimates on Thursday.Guidewire Software reported quarterly earnings of $84 cents per share which beat the analyst consensus estimate of 64 cents per share. The company reported quarterly sales of $356.570 million which beat the analyst consensus estimate of $337.858 million.Guidewire Software said it sees FY2026 sales of $1.385B-$1.405B, versus estimates of $1.184 billion.“We were thrilled to close the year with an outstanding four ...

Key Takeaways Guidewire's Q4 EPS rose 35.5% YoY to $0.84, beating estimates on 22% revenue growth.Cloud momentum included 19 wins, with a landmark 10-year Liberty Mutual deal.ARR hit $1.03B, with fiscal 2026 ARR estimated up to $1.22B.Guidewire Software, Inc (GWRE) reported non-GAAP earnings per share of 84 cents in fourth-quarter fiscal 2025 (ended July 31, 2025), up 35.5% year over year and beat the Zacks Consensus Estimate of 62 cents. The company reported revenues of $356.6 million, up 22% year over yea ...

Guidewire Software (GWRE) reported $356.57 million in revenue for the quarter ended July 2025, representing a year-over-year increase of 22.3%. EPS of $0.84 for the same period compares to $0.62 a year ago.The reported revenue represents a surprise of +5.76% over the Zacks Consensus Estimate of $337.15 million. With the consensus EPS estimate being $0.62, the EPS surprise was +35.48%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to W ...

Financial Data and Key Metrics Changes - Annual Recurring Revenue (ARR) grew 19% year-over-year, reaching $1.032 billion, with fully ramped ARR increasing 22% on a constant currency basis [7][19] - Total revenue for the year was $1.2 billion, exceeding expectations, with subscription revenue at $667 million, up 40% year-over-year [20][22] - Operating income was $208 million, up 109% year-over-year, with cash flow from operations at $301 million [23][26] Business Line Data and Key Metrics Changes - The company signed 19 core cloud deals in Q4, totaling 57 for the year, indicating healthy annual growth in deal count [12] - Subscription and support gross margins finished the year at 70%, reflecting improved cloud margins [8][22] - Services revenue grew 21% year-over-year, reaching $219 million, supported by strong partnerships with the SI community [22][16] Market Data and Key Metrics Changes - North America showed exceptional win rates, while Europe closed 11 deals for the year, indicating strong geographic performance [14][15] - Latin America experienced a sharp increase in market momentum, closing three deals in Q4 [14] - The Asia-Pacific region saw success in Australia and New Zealand, positioning the company well for long-term growth [15] Company Strategy and Development Direction - The company is focused on expanding its cloud platform and enhancing data-driven analytics and AI applications to modernize the P&C insurance industry [9][10] - The acquisition of Quanti aims to modernize pricing operations and product management across the industry [9] - The company is optimistic about leveraging generative AI to improve operational efficiencies and customer outcomes [10][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for the Guidewire Cloud Platform, with a healthy pipeline entering fiscal 2026 [8][24] - The company anticipates ARR growth of 17% for fiscal 2026, with total revenue expected between $1.385 and $1.405 billion [24][26] - Management highlighted the importance of customer success and project implementation quality in driving low ARR attrition rates [30][32] Other Important Information - The company ended the year with $1.5 billion in cash, cash equivalents, and investments, indicating strong financial health [23] - The Guidewire Marketplace has expanded to over 300 third-party applications, enhancing the platform's value proposition [60][62] Q&A Session Summary Question: What are the drivers behind the record low ARR attrition? - Management attributed the low attrition to a durable customer base, focus on project success, and proactive customer engagement [30][32] Question: How should investors think about platform expansion post-cloud transition? - Management indicated that the next phase involves focusing on data and analytics, with significant opportunities in pricing and underwriting [34][37] Question: How does premium growth impact the business model? - Management clarified that while premium growth benefits the company, the complexity of contract structures means it does not directly translate to revenue [41][43] Question: What is the competitive landscape like? - Management noted that demand for modernization remains strong, and minimizing project failure risks is key to driving growth [49][50] Question: Can you discuss the Liberty Mutual deal's significance? - Management emphasized the strategic nature of the partnership and its potential to set a precedent for future long-term commitments [56][66] Question: How is the company leveraging AI in its services? - Management confirmed that AI is a primary focus for enhancing service delivery and minimizing modernization risks [64][70]

Financial Data and Key Metrics Changes - Annual Recurring Revenue (ARR) grew 19% year-over-year, reaching $1.032 billion, with fully ramped ARR increasing by 22% on a constant currency basis [5][17] - Total revenue for the year was $1.2 billion, exceeding expectations, with subscription revenue at $667 million, up 40% year-over-year [18] - Operating income was $208 million, up 109% year-over-year, with cash flow from operations at $301 million [20][24] Business Line Data and Key Metrics Changes - The company signed 19 core cloud deals in Q4, totaling 57 for the year, indicating healthy annual growth in deal count [10] - Subscription and support revenue increased by 33% year-over-year, while services revenue grew by 21% [19] - Total cloud ARR grew 36% year-over-year, comprising 74% of total ARR [18] Market Data and Key Metrics Changes - North America showed strong performance with a stable win rate, while Europe closed 11 deals for the year, and Latin America saw a sharp increase with three deals in Q4 [11][12] - The Asia-Pacific region benefited from successes in Australia, New Zealand, and Japan, positioning the company well for long-term growth [12] Company Strategy and Development Direction - The company is focused on enhancing its cloud platform and expanding its data-driven analytics and AI applications to modernize the insurance industry [7][8] - The acquisition of Quanti aims to modernize pricing operations and product management across the industry [7] - The company is optimistic about leveraging generative AI to improve operational efficiencies and customer outcomes [8][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for the Guidewire Cloud Platform and the healthy pipeline entering fiscal 2026 [6][21] - The company anticipates ARR growth of 17% for fiscal 2026, with total revenue expected between $1.385 and $1.405 billion [21][22] - Management highlighted the importance of customer success and project implementation quality in driving low ARR attrition rates [28][29] Other Important Information - The company ended the year with $1.5 billion in cash, cash equivalents, and investments [20] - The professional services team is focused on improving the pace and predictability of cloud program implementations [62] Q&A Session Summary Question: What are the drivers behind the record low ARR attrition? - Management attributed the low attrition to a durable customer base, focus on project success, and proactive customer engagement [28][29] Question: How should investors think about platform expansion post-cloud transition? - Management indicated that the next phase involves focusing on data and analytics, with significant potential in pricing, underwriting, and claims [33][34] Question: How does premium growth impact the business model? - Management clarified that while premium growth generally benefits the company, the complexity of contract structures means it does not directly translate to revenue [39][41] Question: What is the competitive landscape like? - Management noted that the demand for modernization remains strong, and minimizing the risk of project failure is key to driving growth [47][48] Question: Can you discuss the Liberty Mutual deal and its implications? - Management described the deal as significant but noted it is not yet a pattern for all Tier 1 conversations [54] Question: How is the Guidewire Marketplace performing? - Management highlighted the importance of third-party development and the potential for innovation through the marketplace [58][59] Question: How is AI being integrated into service operations? - Management confirmed that AI is a primary focus for improving deployment efficiency and minimizing modernization risks [61][62]

SAN MATEO, Calif., September 4, 2025 - Guidewire (NYSE: GWRE) today announced its financial results for the fiscal quarter and year ended July 31, 2025. "We were thrilled to close the year with an outstanding fourth quarter executing 19 cloud deals and surpassing $1 billion in ARR," said Mike Rosenbaum, chief executive officer, Guidewire. "The fourth quarter was highlighted by a significant 10-year agreement with a major Tier-1 insurer that exemplifies the platform maturity and referenceability driving incr ...

Core Insights - Guidewire Software, Inc. (GWRE) is expected to report fourth-quarter fiscal 2025 results on September 4, with revenue guidance between $332 million and $340 million, reflecting a 15.7% increase year-over-year [1][2] - The consensus estimate for the fiscal year total revenues is between $1.178 billion and $1.186 billion, with an average surprise of 38% in earnings over the last four quarters [2] Revenue and Earnings Expectations - For fiscal 2025, subscription revenues are projected at $660 million, with annual recurring revenue (ARR) expected between $1.012 billion and $1.022 billion [8][9] - Non-GAAP operating income for the fiscal year is anticipated to be in the range of $187 million to $195 million, representing an 88.4% year-over-year increase [10] Market Performance - GWRE shares have increased by 48.5% over the past year, outperforming the Internet-Software industry, which grew by 42.9% [3] Growth Drivers - The company is experiencing strong momentum in its cloud business as insurers transition from legacy systems, with solid deal volume particularly among Tier 1 insurers [4][5] - The introduction of the Guidewire Industry Intelligence solution is expected to drive growth, enhancing data-driven claims decisions for insurers [6] Challenges - Increasing investments in product enhancements and global macroeconomic conditions may pose challenges, particularly affecting license revenues due to the migration of on-premise customers to the cloud [11]

Core Viewpoint - Guidewire Software (GWRE) has shown a year-to-date stock appreciation of 23.3%, closely aligning with the Zacks Internet Software industry's growth of 23.7%, while outperforming the broader Computer and Technology sector and the S&P 500 composite, which returned 14.6% and 9.5% respectively [1] Growth Drivers - Guidewire is experiencing strong momentum in its cloud business, driven by increasing demand from insurers transitioning from legacy systems to cloud-based solutions [6] - The company has expanded its cloud ecosystem to include 26,000 Guidewire-specialized practitioners across 38 system integrators, enhancing its Guidewire Cloud platform with new capabilities [6] - The first sale of Guidewire Industry Intelligence, a predictive model integrated into ClaimCenter workflow, represents a new revenue opportunity and adds value for insurers [7] - In the fiscal third quarter of 2025, Guidewire secured 17 new deals, including 14 for various InsuranceSuite Cloud applications and three for InsuranceNow, with significant wins from Tier 1 and Tier 2 insurers [8] Financial Performance - Guidewire's non-GAAP gross margin improved to 65.5% from 62.6% year-over-year, with the subscription and support segment's gross margin rising to 70.6% from 65.6% [10] - For the fiscal fourth quarter, non-GAAP operating income is estimated to be between $52 million and $60 million, with fiscal 2025 operating income projected between $187 million and $195 million [11] - The company generated $32.4 million in cash from operations and nearly $27.8 million in free cash flow, with cash and cash equivalents totaling $1,243.7 million as of April 30, 2025 [12] - Total revenues for fiscal 2025 are expected to be between $1.178 billion and $1.186 billion, with subscription revenues forecasted at $660 million [13] Challenges - Guidewire faces higher costs, with total operating expenses increasing by 12.1% year-over-year to $178.2 million, which could pressure profitability if revenue performance weakens [15] - The company's expansion into diverse international markets introduces foreign exchange and integration risks, particularly with a strengthening U.S. dollar [16] - GWRE's stock is currently trading at a premium valuation, with a forward 12-month price/sales ratio of 12.95X compared to the industry's 5.84X, indicating potential caution for new investors [17] Investment Outlook - With a Zacks Rank 3 (Hold), GWRE is viewed as a moderate investment, suggesting that new investors may want to wait for a better entry point while current investors can maintain their positions [19]

Group 1 - Guidewire Software (GWRE) has experienced significant selling pressure, resulting in a 12.4% decline in stock price over the past four weeks, but analysts anticipate better earnings than previously predicted [1] - The Relative Strength Index (RSI) for GWRE is currently at 26.61, indicating that the stock is in oversold territory, which may suggest a potential reversal in trend [5] - There has been a strong consensus among sell-side analysts to raise earnings estimates for GWRE, leading to a 10.8% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [6] Group 2 - GWRE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [7]

Core Viewpoint - Guidewire Software (GWRE) has seen a stock appreciation of 36.4% over the past six months, outperforming the Zacks Internet Software industry's growth of 17.3% [1] Group 1: Company Performance - GWRE closed at $231.25, which is 12.1% lower than its 52-week high of $263.20 [2] - The company reported 17 deal wins in the fiscal third quarter of 2025, including 14 for various InsuranceSuite Cloud applications and three InsuranceNow deals [3] - Non-GAAP gross margin improved to 65.5% from 62.6% year-over-year, with the subscription and support segment's gross margin increasing to 70.6% from 65.6% [6] Group 2: Financial Outlook - For the fiscal fourth quarter, non-GAAP operating income is estimated to be between $52 million and $60 million, with fiscal 2025 non-GAAP operating income expected between $187 million and $195 million [9] - Guidewire expects total revenues for fiscal 2025 to be between $1.178 billion and $1.186 billion, an increase from earlier guidance of $1.164 billion to $1.174 billion [11] - The company generated $32.4 million in cash from operations in the last quarter, with free cash flow nearly at $27.8 million [10] Group 3: Market Position and Challenges - Guidewire's focus on enhancing its cloud platform with new capabilities is expected to boost long-term sales of subscription-based solutions [4] - The company is expanding its global footprint, with new customers from diverse markets, which presents forex and integration risks [14] - GWRE's stock is trading at a premium valuation, with a forward 12-month price/sales ratio of 14.58X compared to the industry's 5.88X [15]