Core Insights - Guidewire Software, Inc. reported fourth-quarter earnings of $0.84 per share, exceeding analyst estimates of $0.64 per share, and quarterly sales of $356.570 million, surpassing the consensus estimate of $337.858 million [1] - The company projects FY2026 sales between $1.385 billion and $1.405 billion, significantly higher than the previous estimate of $1.184 billion [1] - Guidewire executed 19 cloud deals in the fourth quarter and achieved over $1 billion in Annual Recurring Revenue (ARR), highlighted by a notable 10-year agreement with a major Tier-1 insurer [2] Analyst Ratings and Price Targets - RBC Capital analyst Rishi Jaluria maintained an Outperform rating and raised the price target from $290 to $300 [9] - Oppenheimer analyst Ken Wong also maintained an Outperform rating, increasing the price target from $275 to $300 [9] - Stifel analyst Parker Lane maintained a Buy rating and raised the price target from $270 to $300 [9] - Wells Fargo analyst Michael Turrin maintained an Overweight rating, increasing the price target from $265 to $275 [9] - Goldman Sachs analyst Adam Hotchkiss maintained a Buy rating and raised the price target from $270 to $305 [9] - Raymond James analyst Alexander Sklar reiterated an Outperform rating and boosted the price target from $255 to $275 [9]

Core Insights - Guidewire Software, Inc (GWRE) reported non-GAAP earnings per share of 84 cents for Q4 fiscal 2025, reflecting a 35.5% year-over-year increase and surpassing the Zacks Consensus Estimate of 62 cents [1][10] - The company achieved revenues of $356.6 million, a 22% year-over-year growth, exceeding the Zacks Consensus Estimate by 5.8% and surpassing its own guidance of $332-$340 million [2][10] Revenue Performance - Subscription and support revenues, which accounted for 56.6% of total revenues, increased by 33% year-over-year to $201.9 million [9][11] - License revenues (26.3% of total) rose 5% year-over-year to $93.6 million, while services revenues (17.1%) jumped 20% year-over-year to $61 million [11] Cloud Momentum - Guidewire Cloud gained traction with 19 deal wins in the reported quarter, totaling 57 for the fiscal year, including nine deals with Tier 1 insurers [2][10] - The 10-year deal with Liberty Mutual was highlighted as a significant milestone, validating the platform's maturity and scalability [3][10] Annual Recurring Revenue (ARR) - As of July 31, ARR reached $1.032 billion, up 19% year-over-year, with expectations for fiscal 2026 ARR to be between $1.21 billion and $1.22 billion [4][10] Future Guidance - GWRE anticipates total revenues for fiscal 2026 to be between $1.385 billion and $1.405 billion, compared to $1.202 billion in fiscal 2025 [5] - Subscription revenues are projected at $888 million, with total subscription and support revenues expected to reach $945 million [5] Operating Income and Cash Flow - Non-GAAP operating income is forecasted to be between $259 million and $279 million, with cash flow from operations anticipated in the range of $350-$370 million [6] - Non-GAAP gross margin improved to 67.7% from 67% year-over-year, with the subscription and support segment's gross margin increasing to 70.2% from 66% [11] Stock Performance - Following the earnings results, GWRE shares rose by 15.2% in pre-market trading, with a 34.2% increase over the past year compared to the Internet Software industry's growth of 46.1% [8]

Group 1 - Guidewire Software reported revenue of $356.57 million for the quarter ended July 2025, a year-over-year increase of 22.3% and a surprise of +5.76% over the Zacks Consensus Estimate of $337.15 million [1] - The company achieved an EPS of $0.84, compared to $0.62 a year ago, resulting in an EPS surprise of +35.48% [1] - Annual recurring revenue reached $1.03 billion, slightly above the four-analyst average estimate of $1.02 billion [4] Group 2 - Subscription and support revenue was $201.89 million, exceeding the estimated $194.68 million, representing a year-over-year increase of +33% [4] - License revenue was reported at $93.64 million, surpassing the average estimate of $86.17 million, with a year-over-year change of +5.4% [4] - Services revenue was $61.04 million, above the estimated $56.81 million, reflecting a year-over-year increase of +20.1% [4] Group 3 - Gross profit from subscription and support was $137.32 million, compared to the average estimate of $131.32 million [4] - Gross profit from services was $1.76 million, below the estimated $4.72 million [4] - Gross profit from license was $92.73 million, exceeding the average estimate of $84.37 million [4] Group 4 - Over the past month, Guidewire Software's shares returned -2.8%, while the Zacks S&P 500 composite increased by +3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

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]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Guidewire achieved exceptional FY2025 financial results, surpassing all targets and exceeding **$1 billion in ARR** [Fiscal Year 2025 Performance Overview](index=1&type=section&id=FY2025%20Performance%20Overview) Guidewire achieved exceptional financial results in fiscal year 2025, surpassing all financial targets, exceeding $1 billion in Annual Recurring Revenue (ARR), and demonstrating strong growth across key metrics, coupled with robust operational discipline - Guidewire surpassed **$1 billion in ARR** for fiscal year 2025[2](index=2&type=chunk) Fiscal Year 2025 Key Performance Indicators | Metric | Growth Rate (YoY) | | :--------------------- | :------------------ | | ARR | 19% | | Fully Ramped ARR | 22% | | Total Revenue | 23% | | Cash Flow from Operations Margin | 25% | [Fourth Quarter Fiscal Year 2025 Performance Overview](index=1&type=section&id=Q4%20FY2025%20Performance%20Overview) The fourth quarter of fiscal year 2025 was marked by significant cloud deal execution, including a major 10-year agreement with a Tier-1 insurer, reflecting the platform's maturity and increasing customer commitments - Executed **19 cloud deals** in the fourth quarter[2](index=2&type=chunk) - Secured a significant **10-year agreement** with a major Tier-1 insurer, indicating platform maturity and increased deal sizes[2](index=2&type=chunk) [Fiscal Year 2025 Financial Highlights](index=1&type=section&id=Fiscal%20Year%202025%20Financial%20Highlights) Guidewire's FY2025 financial highlights include strong revenue growth, a profitability turnaround, and robust liquidity [Revenue Performance (FY2025)](index=1&type=section&id=Revenue%20Performance%20(FY2025)) Guidewire reported strong revenue growth for fiscal year 2025, with total revenue increasing by 23%, primarily driven by a 33% increase in subscription and support revenue, alongside significant ARR growth Fiscal Year 2025 Revenue Breakdown | Revenue Type | FY2025 (Millions USD) | FY2024 (Millions USD) | YoY Change (%) | | :--------------------- | :-------------------- | :-------------------- | :------------- | | Total Revenue | $1,202.5 | $980.5 | 23% | | Subscription and Support | $731.3 | $549.1 | 33% | | License | $251.9 | $250.2 | 1% | | Services | $219.2 | $181.2 | 21% | Annual Recurring Revenue (ARR) - FY2025 | Metric | As of July 31, 2025 (Millions USD) | As of July 31, 2024 (Millions USD) | YoY Growth (Constant Currency) | | :-------------------------------- | :---------------------------------- | :---------------------------------- | :----------------------------- | | ARR (July 31, 2024 exchange rates) | $1,032 | $864 | - | | ARR (July 31, 2025 exchange rates) | $1,041 | - | 19% | [Profitability (FY2025)](index=1&type=section&id=Profitability%20(FY2025)) Guidewire achieved a significant turnaround in profitability for fiscal year 2025, moving from a GAAP operating loss and net loss in FY2024 to positive GAAP income from operations and net income, with substantial improvements in non-GAAP profitability Fiscal Year 2025 Profitability Highlights | Metric | FY2025 (Millions USD) | FY2024 (Millions USD) | YoY Change | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | GAAP Income (Loss) from Operations | $41.1 | ($52.6) | Improved | | Non-GAAP Income from Operations | $208.2 | $99.5 | +109.2% | | GAAP Net Income (Loss) | $69.8 | ($6.1) | Improved | | GAAP Net Income (Loss) per Share | $0.81 | ($0.07) | Improved | | Non-GAAP Net Income | $227.9 | $114.5 | +99.0% | | Non-GAAP Net Income per Share | $2.65 | $1.35 | +96.3% | [Liquidity and Capital Resources (FY2025)](index=1&type=section&id=Liquidity%20and%20Capital%20Resources%20(FY2025)) The company significantly increased its cash, cash equivalents, and investments, alongside generating substantial cash from operations in fiscal year 2025, indicating strong financial health and operational efficiency Fiscal Year 2025 Liquidity and Capital Resources | Metric | As of July 31, 2025 (Millions USD) | As of July 31, 2024 (Millions USD) | YoY Change | | :------------------------------------ | :---------------------------------- | :---------------------------------- | :--------- | | Cash, Cash Equivalents, and Investments | $1,483.2 | $1,129.5 | +31.3% | | Cash from Operations (FY2025) | $300.9 | - | - | [Fourth Quarter Fiscal Year 2025 Financial Highlights](index=2&type=section&id=Fourth%20Quarter%20Fiscal%20Year%202025%20Financial%20Highlights) Guidewire's Q4 FY2025 financial highlights include strong revenue growth and significant improvements in profitability [Revenue Performance (Q4 FY2025)](index=2&type=section&id=Revenue%20Performance%20(Q4%20FY2025)) Guidewire's total revenue for the fourth quarter of fiscal year 2025 increased by 22% year-over-year, driven primarily by a 33% increase in subscription and support revenue Fourth Quarter Fiscal Year 2025 Revenue Breakdown | Revenue Type | Q4 FY2025 (Millions USD) | Q4 FY2024 (Millions USD) | YoY Change (%) | | :--------------------- | :-------------------- | :-------------------- | :------------- | | Total Revenue | $356.6 | $291.5 | 22% | | Subscription and Support | $201.9 | $151.8 | 33% | | License | $93.6 | $88.9 | 5% | | Services | $61.0 | $50.8 | 20% | [Profitability (Q4 FY2025)](index=2&type=section&id=Profitability%20(Q4%20FY2025)) The company demonstrated strong profitability improvements in Q4 FY2025, with GAAP income from operations nearly tripling and non-GAAP income from operations increasing by 50% compared to the prior year's quarter Fourth Quarter Fiscal Year 2025 Profitability Highlights | Metric | Q4 FY2025 (Millions USD) | Q4 FY2024 (Millions USD) | YoY Change | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | GAAP Income from Operations | $29.6 | $10.3 | +187.4% | | Non-GAAP Income from Operations | $73.5 | $49.0 | +50.0% | | GAAP Net Income | $52.0 | $16.8 | +209.5% | | GAAP Net Income per Share | $0.60 | $0.20 | +200.0% | | Non-GAAP Net Income | $72.1 | $54.0 | +33.5% | | Non-GAAP Net Income per Share | $0.84 | $0.62 | +35.5% | [Business Outlook](index=2&type=section&id=Business%20Outlook) Guidewire's business outlook projects continued growth in key financial metrics for Q1 and the full fiscal year 2026 [First Quarter Fiscal Year 2026 Outlook](index=2&type=section&id=First%20Quarter%20Fiscal%20Year%202026%20Outlook) Guidewire provided an outlook for the first quarter of fiscal year 2026, projecting continued growth in ARR and total revenue, along with positive operating income Q1 Fiscal Year 2026 Outlook | Metric | Range (Millions USD) | | :------------------------ | :------------------- | | Ending ARR | $1,048 - $1,054 | | Total Revenue | $315 - $321 | | Operating Income | $1 - $7 | | Non-GAAP Operating Income | $47 - $53 | [Fiscal Year 2026 Outlook](index=2&type=section&id=Fiscal%20Year%202026%20Outlook) For the full fiscal year 2026, Guidewire anticipates further expansion in ARR and total revenue, alongside significant increases in both GAAP and Non-GAAP operating income and operating cash flow Fiscal Year 2026 Outlook | Metric | Range (Millions USD) | | :------------------------ | :------------------- | | Ending ARR | $1,210 - $1,220 | | Total Revenue | $1,385 - $1,405 | | Operating Income | $68 - $88 | | Non-GAAP Operating Income | $259 - $279 | | Operating Cash Flow | $350 - $370 | [Non-GAAP Financial Measures and Other Metrics](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Metrics) This section defines Guidewire's non-GAAP financial measures, detailing adjustments, management's use, and inherent limitations for key metrics [Definitions and Adjustments](index=3&type=section&id=Definitions%20and%20Adjustments) This section defines the non-GAAP financial measures used by Guidewire, detailing the specific adjustments made to GAAP figures, such as excluding stock-based compensation and amortization of intangibles, and clarifies the calculation of Annual Recurring Revenue (ARR) and Fully Ramped ARR - Non-GAAP gross profit and income (loss) from operations exclude **stock-based compensation**, **amortization of intangibles**, and **acquisition consideration holdback**[12](index=12&type=chunk) - Non-GAAP net income (loss) and tax provision (benefit) also exclude **amortization of debt issuance costs**, **changes in fair value of strategic investments**, **gain (loss) on sale of strategic investments**, **retirement of debt**, and related tax effects[12](index=12&type=chunk) - **Free cash flow** is defined as net cash flow from operating activities less cash used for purchases of property and equipment and capitalized software development costs[12](index=12&type=chunk) - **Annual recurring revenue (ARR)** quantifies the annualized recurring value in active customer contracts at the end of a reporting period, including term licenses, subscription, support, and hosting agreements, measured on a constant currency basis[13](index=13&type=chunk) - **Fully ramped ARR** includes all non-variable price increases outlined in the pricing schedule of an executed customer contract within the first five years[13](index=13&type=chunk) [Management's Use and Limitations](index=3&type=section&id=Management's%20Use%20and%20Limitations) Guidewire utilizes non-GAAP measures and other metrics to assess financial performance, compare trends, determine incentive compensation, and for budgeting, while acknowledging these measures are not a substitute for GAAP and have inherent limitations due to management's judgment in exclusions - Management uses non-GAAP measures for **trend analysis**, **executive compensation**, **budgeting**, and **planning**[14](index=14&type=chunk) - Non-GAAP measures provide additional tools for investors to evaluate ongoing operating results and compare Guidewire's performance with other software companies[14](index=14&type=chunk) - The principal limitation of non-GAAP financial measures is the exclusion of significant GAAP-required expenses and income, and they are subject to management's judgment[15](index=15&type=chunk) - Investors are urged to review GAAP reconciliations and not rely on any single financial measure[15](index=15&type=chunk) [About Guidewire](index=3&type=section&id=About%20Guidewire) This section provides an overview of Guidewire as a leading cloud platform for P&C insurers and details its investor communication channels [Company Overview](index=3&type=section&id=Company%20Overview) Guidewire is a leading cloud platform provider for Property & Casualty (P&C) insurers, serving over 570 insurers globally with core systems leveraging data, analytics, digital, and AI capabilities, boasting a strong implementation record and a large partner ecosystem - Guidewire is the trusted cloud platform for **P&C insurers** to engage, innovate, and grow efficiently[16](index=16&type=chunk) - Serves over **570 insurers** in **43 countries**, from new ventures to the largest global players[16](index=16&type=chunk) - Offers core systems utilizing **data and analytics**, **digital**, and **artificial intelligence**[16](index=16&type=chunk) - Boasts an unparalleled implementation record with **1,700+ successful projects**, supported by the industry's largest R&D team and SI partner ecosystem[17](index=17&type=chunk) [Investor Relations and Disclosure](index=4&type=section&id=Investor%20Relations%20and%20Disclosure) Guidewire uses its Investor Relations website, X feed, and LinkedIn page as official channels for disclosing company information and complying with Regulation FD, advising investors to monitor these platforms - Guidewire uses its **Investor Relations website** (ir.guidewire.com), **X feed** (@Guidewire_PandC), and **LinkedIn page** (www.linkedin.com/company/guidewire-software) for disclosing company information[18](index=18&type=chunk) - These channels are used to comply with disclosure obligations under **Regulation FD**, and investors should monitor them[18](index=18&type=chunk)[19](index=19&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents Guidewire's condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a significant increase in total assets and stockholders' equity from July 31, 2024, to July 31, 2025, while total current liabilities decreased, reflecting improved financial position Condensed Consolidated Balance Sheet Highlights | Metric | July 31, 2025 (Thousands USD) | July 31, 2024 (Thousands USD) | | :-------------------------- | :---------------------------- | :---------------------------- | | Total Assets | $2,721,099 | $2,226,294 | | Total Current Assets | $1,507,415 | $1,295,534 | | Total Liabilities | $1,263,869 | $883,562 | | Total Current Liabilities | $544,802 | $837,635 | | Total Stockholders' Equity | $1,457,230 | $1,342,732 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations highlight a strong performance in FY2025, with total revenue increasing by 23% and a shift from a net loss to a net income, while Q4 FY2025 also showed substantial revenue and net income growth Condensed Consolidated Statements of Operations Highlights | Metric | Q4 FY2025 (Thousands USD) | Q4 FY2024 (Thousands USD) | FY2025 (Thousands USD) | FY2024 (Thousands USD) | | :--------------------------------------- | :------------------------ | :------------------------ | :--------------------- | :--------------------- | | Total Revenue | $356,570 | $291,515 | $1,202,459 | $980,497 | | Total Gross Profit | $231,811 | $186,436 | $752,053 | $583,361 | | Income (Loss) from Operations | $29,597 | $10,314 | $41,068 | ($52,573) | | Net Income (Loss) | $51,951 | $16,759 | $69,804 | ($6,103) | | Diluted Net Income (Loss) per Share | $0.60 | $0.20 | $0.81 | ($0.07) | Stock-Based Compensation Expense | Category | Q4 FY2025 (Thousands USD) | Q4 FY2024 (Thousands USD) | FY2025 (Thousands USD) | FY2024 (Thousands USD) | | :------------------------------ | :------------------------ | :------------------------ | :--------------------- | :--------------------- | | Total Stock-based Compensation | $42,191 | $37,286 | $161,556 | $146,460 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Guidewire generated significantly more cash from operating activities in FY2025 compared to FY2024, contributing to a substantial net increase in cash, cash equivalents, and restricted cash Condensed Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | Q4 FY2025 (Thousands USD) | Q4 FY2024 (Thousands USD) | FY2025 (Thousands USD) | FY2024 (Thousands USD) | | :--------------------------------------- | :------------------------ | :------------------------ | :--------------------- | :--------------------- | | Net Cash Provided by Operating Activities | $244,831 | $193,777 | $300,867 | $195,748 | | Net Cash Used in Investing Activities | ($58,390) | ($7,292) | ($236,965) | ($52,359) | | Net Cash Provided by Financing Activities | $728 | $1,041 | $82,293 | $1,055 | | Net Increase in Cash, Cash Equivalents, and Restricted Cash | $187,581 | $188,391 | $149,910 | $142,394 | | Cash, Cash Equivalents, and Restricted Cash — End of Period | $699,094 | $549,184 | $699,094 | $549,184 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations between GAAP and non-GAAP financial measures for gross profit, operating income, net income, tax, and EPS [Gross Profit Reconciliation](index=11&type=section&id=Gross%20Profit%20Reconciliation) The reconciliation shows that non-GAAP gross profit consistently exceeded GAAP gross profit due to the exclusion of stock-based compensation and amortization of intangibles Gross Profit Reconciliation | Metric | Q4 FY2025 (Thousands USD) | Q4 FY2024 (Thousands USD) | FY2025 (Thousands USD) | FY2024 (Thousands USD) | | :------------------------ | :------------------------ | :------------------------ | :--------------------- | :--------------------- | | GAAP Gross Profit | $231,811 | $186,436 | $752,053 | $583,361 | | Non-GAAP Adjustments | $9,815 | $8,741 | $37,103 | $34,564 | | Non-GAAP Gross Profit | $241,626 | $195,177 | $789,156 | $617,925 | [Income (Loss) from Operations Reconciliation](index=11&type=section&id=Income%20(Loss)%20from%20Operations%20Reconciliation) Non-GAAP income from operations significantly outpaced GAAP figures, particularly in FY2025, by excluding non-cash items like stock-based compensation and amortization of intangibles Income (Loss) from Operations Reconciliation | Metric | Q4 FY2025 (Thousands USD) | Q4 FY2024 (Thousands USD) | FY2025 (Thousands USD) | FY2024 (Thousands USD) | | :-------------------------------- | :------------------------ | :------------------------ | :--------------------- | :--------------------- | | GAAP Income (Loss) from Operations | $29,597 | $10,314 | $41,068 | ($52,573) | | Non-GAAP Adjustments | $43,933 | $38,653 | $167,177 | $152,071 | | Non-GAAP Income (Loss) from Operations | $73,530 | $48,967 | $208,245 | $99,498 | [Net Income (Loss) Reconciliation](index=11&type=section&id=Net%20Income%20(Loss)%20Reconciliation) Non-GAAP net income was substantially higher than GAAP net income (or lower loss) across all periods, primarily due to adjustments for stock-based compensation, amortization, and the tax impact of these adjustments Net Income (Loss) Reconciliation | Metric | Q4 FY2025 (Thousands USD) | Q4 FY2024 (Thousands USD) | FY2025 (Thousands USD) | FY2024 (Thousands USD) | | :------------------------ | :------------------------ | :------------------------ | :--------------------- | :--------------------- | | GAAP Net Income (Loss) | $51,951 | $16,759 | $69,804 | ($6,103) | | Non-GAAP Adjustments | $20,137 | $37,255 | $158,071 | $120,624 | | Non-GAAP Net Income (Loss) | $72,088 | $54,014 | $227,875 | $114,521 | [Tax Provision (Benefit) Reconciliation](index=11&type=section&id=Tax%20Provision%20(Benefit)%20Reconciliation) The reconciliation of tax provision shows a significant difference between GAAP and non-GAAP figures, mainly driven by the tax impact of non-GAAP adjustments, leading to a higher non-GAAP tax provision Tax Provision (Benefit) Reconciliation | Metric | Q4 FY2025 (Thousands USD) | Q4 FY2024 (Thousands USD) | FY2025 (Thousands USD) | FY2024 (Thousands USD) | | :-------------------------------- | :------------------------ | :------------------------ | :--------------------- | :--------------------- | | GAAP Tax Provision (Benefit) | ($10,966) | $2,125 | ($20,409) | ($20,735) | | Non-GAAP Adjustments | $26,561 | $4,044 | $64,888 | $33,333 | | Non-GAAP Tax Provision (Benefit) | $15,595 | $6,169 | $44,479 | $12,598 | [Net Income (Loss) Per Share Reconciliation](index=12&type=section&id=Net%20Income%20(Loss)%20Per%20Share%20Reconciliation) Non-GAAP diluted net income per share was considerably higher than GAAP figures, reflecting the impact of various non-GAAP adjustments, including stock-based compensation and the tax effects Net Income (Loss) Per Share Reconciliation (Diluted) | Metric | Q4 FY2025 (USD) | Q4 FY2024 (USD) | FY2025 (USD) | FY2024 (USD) | | :--------------------------------------- | :-------------- | :-------------- | :----------- | :----------- | | GAAP Net Income (Loss) per Share – Diluted | $0.60 | $0.20 | $0.81 | ($0.07) | | Non-GAAP Adjustments (Net Impact) | $0.24 | $0.42 | $1.84 | $1.42 | | Non-GAAP Net Income (Loss) per Share – Diluted | $0.84 | $0.62 | $2.65 | $1.35 | [Free Cash Flow Reconciliation](index=12&type=section&id=Free%20Cash%20Flow%20Reconciliation) Guidewire's free cash flow saw substantial growth in both Q4 and the full fiscal year 2025, driven by increased net cash provided by operating activities Free Cash Flow Reconciliation | Metric | Q4 FY2025 (Thousands USD) | Q4 FY2024 (Thousands USD) | FY2025 (Thousands USD) | FY2024 (Thousands USD) | | :--------------------------------------- | :------------------------ | :------------------------ | :--------------------- | :--------------------- | | Net Cash Provided by Operating Activities | $244,831 | $193,777 | $300,867 | $195,748 | | Purchases of Property and Equipment | ($3,405) | ($1,694) | ($5,741) | ($6,362) | | Capitalized Software Development Costs | ($3,742) | ($2,736) | ($14,714) | ($12,165) | | Free Cash Flow | $237,684 | $189,347 | $280,412 | $177,221 | [Reconciliation of GAAP to Non-GAAP Outlook](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Outlook) This section reconciles Guidewire's GAAP to non-GAAP outlook for income from operations for Q1 and the full fiscal year 2026 [Income (Loss) from Operations Outlook Reconciliation](index=13&type=section&id=Income%20(Loss)%20from%20Operations%20Outlook%20Reconciliation) The outlook reconciliation for income from operations highlights the expected difference between GAAP and non-GAAP figures for Q1 and full fiscal year 2026, primarily due to adjustments for stock-based compensation and amortization Income (Loss) from Operations Outlook Reconciliation | Metric | Q1 FY2026 GAAP (Millions USD) | Q1 FY2026 Non-GAAP (Millions USD) | FY2026 GAAP (Millions USD) | FY2026 Non-GAAP (Millions USD) | | :-------------------------------- | :---------------------------- | :------------------------------ | :------------------------- | :----------------------------- | | Income (Loss) from Operations | $1 - $7 | $47 - $53 | $68 - $88 | $259 - $279 | | Non-GAAP Adjustments (Stock-based compensation, Amortization of intangibles & other) | - | $46 | - | $191 | [Legal and Contact Information](index=5&type=section&id=Legal%20and%20Contact%20Information) This section includes cautionary language for forward-looking statements and provides essential contact information for investor relations and media [Cautionary Language Concerning Forward-Looking Statements](index=5&type=section&id=Cautionary%20Language%20Concerning%20Forward-Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, emphasizing that actual results may differ materially due to various risks and uncertainties detailed in SEC filings, and that these statements should not be relied upon as representing Guidewire's views beyond the date of issuance - The press release contains **forward-looking statements** regarding financial outlook, guidance, expectations, business momentum, market opportunities, and financial performance[21](index=21&type=chunk) - Forward-looking statements are subject to risks and uncertainties, including **fluctuating operating results**, **reliance on large customers**, **long-term pricing commitments**, **cloud adoption challenges**, **global events**, **data security breaches**, **competition**, **AI development risks**, **product errors**, and **regulatory changes**[21](index=21&type=chunk) - Guidewire undertakes no obligation to update or revise any forward-looking statements[21](index=21&type=chunk) [Investor and Media Contacts](index=5&type=section&id=Investor%20and%20Media%20Contacts) Contact information for investor relations and media inquiries is provided for Guidewire - Investor Contact: **Alex Hughes**, (650) 356-4921, ir@guidewire.com[22](index=22&type=chunk) - Media Contact: **Melissa Cobb**, (650) 464-1177, mcobb@guidewire.com[22](index=22&type=chunk)

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]