Guidewire(GWRE) - 2025 Q4 - Annual Results

Executive Summary Guidewire achieved exceptional FY2025 financial results, surpassing all targets and exceeding $1 billion in ARR Fiscal Year 2025 Performance Overview 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] 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 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] - Secured a significant 10-year agreement with a major Tier-1 insurer, indicating platform maturity and increased deal sizes[2] Fiscal Year 2025 Financial Highlights Guidewire's FY2025 financial highlights include strong revenue growth, a profitability turnaround, and robust liquidity Revenue Performance (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) 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) 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 Guidewire's Q4 FY2025 financial highlights include strong revenue growth and significant improvements in profitability Revenue Performance (Q4 FY2025) 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) 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 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 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 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 This section defines Guidewire's non-GAAP financial measures, detailing adjustments, management's use, and inherent limitations for key metrics Definitions and Adjustments 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] - 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] - 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] - 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] - 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] Management's Use and Limitations 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] - Non-GAAP measures provide additional tools for investors to evaluate ongoing operating results and compare Guidewire's performance with other software companies[14] - 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] - Investors are urged to review GAAP reconciliations and not rely on any single financial measure[15] About Guidewire This section provides an overview of Guidewire as a leading cloud platform for P&C insurers and details its investor communication channels Company Overview 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] - Serves over 570 insurers in 43 countries, from new ventures to the largest global players[16] - Offers core systems utilizing data and analytics, digital, and artificial intelligence[16] - Boasts an unparalleled implementation record with 1,700+ successful projects, supported by the industry's largest R&D team and SI partner ecosystem[17] Investor Relations and Disclosure 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] - These channels are used to comply with disclosure obligations under Regulation FD, and investors should monitor them[18][19] Financial Statements This section presents Guidewire's condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheets 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 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 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 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 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 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 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 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 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 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 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 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 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 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] - 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] - Guidewire undertakes no obligation to update or revise any forward-looking statements[21] Investor and Media Contacts Contact information for investor relations and media inquiries is provided for Guidewire - Investor Contact: Alex Hughes, (650) 356-4921, ir@guidewire.com[22] - Media Contact: Melissa Cobb, (650) 464-1177, mcobb@guidewire.com[22]