Key Takeaways GWRE's ClaimCenter deployed at Cincinnati Insurance to streamline claims operations.Guidewire Cloud adoption helps insurers modernize systems and improve efficiency.GWRE integrates AI, analytics and new apps to enhance underwriting and policyholder experience.Guidewire Software, Inc. (GWRE) announced that The Cincinnati Insurance Company has successfully deployed Guidewire ClaimCenter to modernize and streamline its claims operations. Running on the Guidewire Cloud Platform, ClaimCenter has al ...

Core Insights - Guidewire Software, Inc. (GWRE) reported non-GAAP earnings per share of 66 cents for Q1 fiscal 2026, reflecting a 53.5% year-over-year increase and aligning with Zacks Consensus Estimate [1] - The company achieved revenues of $332.6 million, a 26.5% year-over-year growth, surpassing Zacks Consensus Estimate by 4.9% and exceeding its own guidance of $315-$321 million [1][8] - Annual recurring revenues (ARR) as of October 31 were $1.063 billion, up 2.1% year over year, with expectations for ARR in fiscal 2026 to be between $1.22 billion and $1.23 billion [2] Revenue Performance - GWRE expects total revenues for fiscal 2026 to be between $1.403 billion and $1.419 billion, an increase from $1.202 billion in fiscal 2025, with previous guidance set at $1.385 billion to $1.405 billion [3] - Subscription revenues are forecasted at $891 million, while subscription and support revenues are expected to reach $948 million, with services revenues estimated at $245 million [3] Profitability Metrics - Non-GAAP operating income is projected to be between $266 million and $282 million, with cash flow from operations anticipated in the range of $355-$375 million [4] - Non-GAAP gross margin improved to 66% from 63.5% year over year, with the subscription and support segment's gross margin increasing to 73.2% from 70.3% [6] Segment Performance - Subscription and support segment revenues accounted for 66.8% of total revenues, soaring 31% year over year to $222.2 million [5] - License revenues increased by 12% year over year to $42 million, while services revenues jumped 23% year over year to $68.5 million [5] Financial Position - As of October 31, cash and cash equivalents and short-term investments totaled $1,409.3 million, down from $1,483.2 million as of July 31, 2025 [10] - The company reported a cash usage of $67.4 million from operations during the quarter, with free cash flow usage nearing $77.4 million [10] Future Outlook - For Q2 fiscal 2026, revenues are expected to be in the range of $339-$345 million, with non-GAAP operating income estimated between $68-$74 million [11]

Earnings Per Share (EPS) of $0.66, surpassing the estimated $0.61.Revenue for the quarter was approximately $332.6 million, exceeding estimates and showing substantial growth from the previous year.Strong focus on the Guidewire Cloud Platform and introduction of new products incorporating AI and intelligence.Guidewire Software, Inc. (NYSE: GWRE) is a prominent player in the software industry, specializing in providing technology solutions for the insurance sector. The company is known for its Guidewire Clou ...

Financial Data and Key Metrics Changes - The company reported a record Q1 with ARR ending at $1.063 billion, up 21% year over year on a constant currency basis [15] - Total revenue reached $333 million, reflecting a 27% year-over-year increase [15] - Subscription and support revenue grew 31% to $222 million, while license revenue increased by 12% to $42 million [15][16] - Operating income was $63 million, up 83% year over year, with gross profit at $219 million and a gross margin of 66% [17] Business Line Data and Key Metrics Changes - The company saw continued momentum with eight cloud deals in Q1, contributing to a 22% year-over-year growth in ARR [9] - Professional services revenue finished at $68 million, exceeding expectations due to high utilization [16] - New applications, Pricing Center and Underwriting Center, are expected to enhance agility and performance for insurers [10][11] Market Data and Key Metrics Changes - Five significant deals were closed in North America, including major insurers like The Hartford and Sompo, alongside three international deals [9] - The company is experiencing strong demand in both North America and international markets, with healthy demand in Europe and optimism in Asia-Pacific [66] Company Strategy and Development Direction - The company aims to leverage generative AI to enhance productivity and unlock new product opportunities [7][8] - Focus will shift towards new product offerings while continuing to grow the core business [13] - The acquisition of ProNavigator is expected to enhance the company's capabilities in AI and knowledge management [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the pipeline and raised the annual outlook for ARR to between $1.220 billion and $1.230 billion [18] - The company anticipates continued growth driven by cloud migrations and expansions into new product areas [78] - Management highlighted the importance of successful customer projects to drive future expansions [60] Other Important Information - The company is adjusting its expectations for cash flow from operations to be between $355 million and $375 million for the year [20] - Subscription and support gross margin expectations have been raised to between 72% and 73% for the year [19] Q&A Session Summary Question: Can you elaborate on the operational agility related to the new products? - The integration of new products is designed to enhance flexibility for insurers, allowing them to respond more effectively to market changes [25][26] Question: How should we interpret the momentum in services revenue? - The services revenue growth is indicative of strong demand and is expected to continue as the company invests in generative AI to improve implementation costs [30][31] Question: Are you seeing more simultaneous consumption of key products? - The company is witnessing a trend where large customers are migrating multiple products to the cloud simultaneously, reflecting increased trust in the platform [33][34] Question: What is the timeline for adoption of the new Pricing and Underwriting Centers? - Adoption is expected to be slightly faster than previous core products due to the incremental nature of the offerings [41][42] Question: How does the company view competition in the AI space? - The company aims to foster innovation in the industry by being an open platform, allowing third-party AI solutions to integrate with its core systems [55][56] Question: What are the growth drivers for the future? - Growth will be driven by migrations, expansions, and new product areas, with a healthy pipeline of opportunities [78][79]

Guidewire Software (NYSE:GWRE) Q1 2026 Earnings Call December 03, 2025 05:00 PM ET Speaker3Greetings and welcome to the Guidewire First Quarter of Fiscal 2026 Financial Results Conference Call. As a reminder, this call is being recorded and will be posted on our Investor Relations page later today. I would like to now turn the call over to Alex Hughes, Vice President of Investor Relations. Thank you, Alex. You may begin.Speaker2Thank you, Grace. Hello, everyone. With me today is Mike Rosenbaum, Chief Execut ...

Core Insights - The company is experiencing an exciting phase with the integration of the Guidewire Cloud Platform and agile components, which presents significant opportunities for both customers and the company [1][2] - The concept of the Intelligent Insurance platform is being emphasized, showcasing how various elements are coming together to enhance the overall offering [2] Company Developments - The CEO, Mike Rosenbaum, will discuss the advancements in powering Intelligent Insurance, indicating a strategic focus on innovation and technology [2] - John Mullen, the President, will present on the company's successes to date, highlighting achievements and progress within the organization [2]

Business Overview - The P&C insurance industry represents a ~$3.0 trillion Direct Written Premium (DWP) market, accounting for approximately 3% of global GDP[13, 16] - Tier 1 and 2 insurers, defined as those with DWP greater than $1 billion, represent over 85% of the total DWP, highlighting the importance of large customers[13] - Guidewire has 349 core customers, representing $1.041 billion in ARR and $775 billion in DWP as of FY25[28] Cloud Transition and Growth - Guidewire is transitioning to a cloud-based model, with a focus on intelligent insurance through AI and a portfolio of applications[25] - The company's cloud transformation has seen significant success, with InsuranceSuite Cloud customers expanding rapidly[36] - Total Cloud ARR and InsuranceSuite Cloud Customer ARR have experienced 6-year CAGRs of 50% and 52% respectively[115, 135] - Guidewire is targeting 17-18% ARR growth and 15-16% total revenue growth (excluding Services Revenue) CAGR from FY25 to FY28[140] - The company aims to achieve a subscription and support gross margin of ~80% and an operating margin of ~40% in the long term[141] New Products and Market Opportunity - New applications like PricingCenter and UnderwritingCenter are being introduced to drive faster speed to market and smarter risk selection[72, 75, 77] - Industry Intel, a set of predictive models, can improve loss ratios by ~50 bps for auto bodily injury and collision claims, and ~25 bps for workers' compensation claims[83] - The introduction of new products expands Guidewire's DWP monetization opportunity by +$4 billion for analytics and data products, and +$8 billion for UnderwritingCenter and PricingCenter[86] Financial Position - Guidewire has a strong balance sheet with $1.5 billion in cash and cash equivalents[145] - The company expects $360 million in cash flow from operations and ~$28 million in CAPEX and capitalized software development costs in FY26[145]

Core Insights - OP Life Assurance has adopted the Guidewire Jutro Digital Platform to enhance its digital capabilities and improve sales team performance [1][2] - The implementation of Guidewire PolicyCenter and BillingCenter on the Guidewire Cloud Platform aims to transform OP Life Assurance's term life insurance offerings [1][2] Digital Transformation - The Jutro Digital Platform is designed to enhance sales channel capabilities, aiding in new business acquisition, customer retention, and partner engagement [2][4] - Customers can now purchase life insurance and additional coverage for critical illness and disabilities through both digital channels and insurance sales agents [3] Competitive Advantage - The Jutro Platform allows for the updating and deployment of products across all digital channels and partner networks, facilitating the creation and testing of digital customer journeys [3][4] - OP Life Assurance is the first life insurance company to implement the Guidewire Jutro Platform, positioning itself to innovate in IT and reduce the risk of losing market share to competitors [2][4] Partnership and Support - CGI, a partner of Guidewire, assisted OP Life Assurance in the implementation of the Jutro Digital Platform [4][5] - The platform enables insurers to build reusable and brandable applications, integrating seamlessly with Guidewire's core policy, claims, and billing systems [5]

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]