Guidewire Announces Second Quarter Fiscal Year 2026 Financial Results
MWN-AI** Summary
Guidewire Software, Inc. (NYSE: GWRE) reported impressive financial results for the second quarter of fiscal year 2026, showcasing a robust performance driven by continued demand for its services in the insurance technology sector. For the quarter ending January 31, 2026, Guidewire achieved a total revenue of $359.1 million, marking a 24% increase compared to the same period in the previous year. Subscription and support revenue surged by 33% to $237.2 million, while services revenue rose by 30%, reflecting the company's strong sales momentum and expansion activities.
CEO Mike Rosenbaum highlighted the growing influence of artificial intelligence in accelerating system modernization and customer engagement, underpinning Guidewire's ongoing success. Furthermore, the company reported an annual recurring revenue (ARR) of $1.121 billion, a year-over-year increase of 22%.
Profitability metrics also showed significant improvement; GAAP net income turned positive at $60.1 million, a sharp contrast to the $37.3 million net loss recorded the previous year. Non-GAAP net income rose to $100.7 million, reinforcing the company’s operational strength despite increased operational costs.
In terms of liquidity, Guidewire held $1.351 billion in cash and investments. The company concluded its existing share repurchase program and announced a new $500 million initiative, demonstrating confidence in its financial health and future growth.
Looking ahead, Guidewire raised its fiscal year 2026 outlook, projecting ending ARR between $1.229 billion and $1.237 billion. The company anticipates total revenue between $1.438 billion and $1.448 billion for the year, reflecting ongoing strategic initiatives and a strong market position. The positive outlook indicates continued momentum as Guidewire solidifies its role as a leader in the P&C insurance technology space.
MWN-AI** Analysis
Guidewire's recently announced financial results for the second quarter of fiscal year 2026 highlight several key factors that are noteworthy for investors. The company reported total revenue of $359.1 million, a robust 24% year-over-year increase, driven primarily by the subscription and support revenue segment, which rose by 33%. This growth underscores the company's strong positioning in the insurance software sector and its ongoing demand for cloud-based solutions enhanced by AI technology.
The company’s annual recurring revenue (ARR) reached $1.121 billion, reflecting solid growth of 22% year-over-year. This metric is critically important, as ARR indicates the predictability and sustainability of revenues, showing a healthy pipeline and customer retention. Additionally, Guidewire's GAAP net income turnaround to $60.1 million from a loss of $37.3 million in the prior year demonstrates improved operational efficiency and reflects positively on the company's financial health.
Investors may take note of the increased operational profitability, with non-GAAP income from operations jumping to $87.4 million, compared to $53.9 million in the same quarter of 2025. This reflects the company's effective cost management despite increased expenditures in R&D and sales and marketing.
However, the decrease in license revenue by 7% could signal a cautious note, indicating potential competitive pressures or challenges in transitioning existing clients into subscription-based services.
The outlook for the fiscal year remains optimistic, with raised revenue forecasts and strong ARR guidance. With $1.35 billion in cash and liquidity to fuel future growth initiatives, along with an active share buyback program, Guidewire appears well-equipped to enhance shareholder value.
In summary, Guidewire presents a compelling case for growth-oriented investors, especially given its significant market traction, innovative product offerings, and strategic financial management. Remaining vigilant about competitive dynamics in the tech-driven insurance space will be crucial moving forward.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Guidewire (NYSE: GWRE) today announced its financial results for the fiscal quarter ended January 31, 2026.
“We delivered another outstanding quarter highlighted by consistent execution, strong growth, and durable demand for large, multi-year deals,” said Mike Rosenbaum, chief executive officer, Guidewire. “Our momentum continues to build as AI drives core system modernization activity, product development velocity, and customer and partner engagement.”
“We are raising our fiscal year outlook across the board and this is informed by our better than expected Q2 results and the continued strength of our pipeline,” said Jeff Cooper, chief financial officer, Guidewire. “ARR growth of 22% year-over-year reflects the strong sales momentum and unique durability we have established.”
Second Quarter Fiscal Year 2026 Financial Highlights
Revenue
- Total revenue for the second quarter of fiscal year 2026 was $359.1 million, an increase of 24% from the same quarter in fiscal year 2025. Subscription and support revenue was $237.2 million, an increase of 33%; license revenue was $59.5 million, a decrease of 7%; and services revenue was $62.4 million, an increase of 30%, each compared to the same quarter in fiscal year 2025.
- As of January 31, 2026, annual recurring revenue, or ARR, was $1,121 million, compared to $1,041 million as of July 31, 2025. ARR results for interim quarterly periods in fiscal year 2026 are based on actual currency rates at the end of fiscal year 2025, held constant throughout the year.
Profitability
- GAAP income from operations was $38.4 million for the second quarter of fiscal year 2026, compared with $11.7 million for the same quarter in fiscal year 2025.
- Non-GAAP income from operations was $87.4 million for the second quarter of fiscal year 2026, compared with $53.9 million for the same quarter in fiscal year 2025.
- GAAP net income was $60.1 million for the second quarter of fiscal year 2026, compared with GAAP net loss of $37.3 million for the same quarter in fiscal year 2025. GAAP diluted net income per share was $0.70 for the second quarter of fiscal year 2026, based on diluted weighted average shares outstanding of 86.1 million, compared with GAAP diluted net loss per share of $0.45 for the same quarter in fiscal year 2025, based on diluted weighted average shares outstanding of 83.7 million.
- Non-GAAP net income was $100.7 million for the second quarter of fiscal year 2026, compared with $43.9 million for the same quarter in fiscal year 2025. Non-GAAP diluted net income per share was $1.17 for the second quarter of fiscal year 2026, based on diluted weighted average shares outstanding of 86.1 million, compared with non-GAAP diluted net income per share of $0.51 for the same quarter in fiscal year 2025, based on diluted weighted average shares outstanding of 86.2 million.
Liquidity and Capital Resources
- Guidewire had $1,351.4 million in cash, cash equivalents, and investments at January 31, 2026, compared to $1,483.2 million at July 31, 2025.
- During the second quarter of fiscal year 2026, Guidewire completed its share repurchase program previously authorized in September 2022. In January 2026, Guidewire authorized a new $500 million share repurchase program. Guidewire repurchased 740,995 shares of common stock at an average price of $199.99 in the quarter ended January 31, 2026. As of January 31, 2026, $490 million remains under the January 2026 share repurchase program.
Business Outlook
Guidewire is issuing the following outlook for the third quarter of fiscal year 2026 based on current expectations:
- Ending ARR between $1,144 million and $1,150 million
- Subscription and support revenue between $239 million and $243 million
- Total revenue between $352 million and $358 million
- GAAP operating income between $11 million and $17 million
- Non-GAAP operating income between $59 million and $65 million
Guidewire is issuing the following updated outlook for fiscal year 2026 based on current expectations:
- Ending ARR between $1,229 million and $1,237 million
- Subscription and support revenue between $962 million and $966 million
- Total revenue between $1,438 million and $1,448 million
- GAAP operating income between $100 million and $110 million
- Non-GAAP operating income between $293 million and $303 million
- Operating cash flow between $360 million and $375 million
Conference Call Information
What: | Guidewire Second Quarter Fiscal Year 2026 Financial Results Conference Call | |
When: | Thursday, March 5, 2026 | |
Time: | 2:00 p.m. PT (5:00 p.m. ET) | |
Dial-In: | (669) 444-9171 | |
Meeting ID: | 999 2833 5730 | |
Password: | 925553 | |
Webcast: | http://ir.guidewire.com/ (live and replay) |
The webcast will be archived on Guidewire’s website ( www.guidewire.com ) for a period of three months. Beginning with the second quarter of fiscal year 2026, quarterly earnings supplemental presentations are available on our website.
Non-GAAP Financial Measures and Other Metrics
This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP tax provision (benefit), non-GAAP net income (loss) per share, and free cash flow. Non-GAAP gross profit and non-GAAP income (loss) from operations exclude stock-based compensation, amortization of intangibles, and acquisition consideration holdback. Non-GAAP net income (loss) and non-GAAP tax provision (benefit) also exclude the amortization of debt issuance costs from our convertible senior notes, changes in fair value of strategic investments, gain (loss) on sale of strategic investments, retirement of debt, and related tax effects of the non-GAAP adjustments. Free cash flow consists of net cash flow provided by (used in) operating activities, less cash used for purchases of property and equipment and capitalized software development costs. These non-GAAP measures enable us to analyze our financial performance without the effects of certain non-cash items such as amortization and stock-based compensation.
Annual recurring revenue (“ARR”) is used to quantify the annualized recurring value outlined in active customer contracts at the end of a reporting period. ARR includes the annualized recurring value of term licenses, subscription agreements, support contracts, and hosting agreements based on customer contractual terms and invoicing activities for the current reporting period, which may not be the same as the timing and amount of revenue recognized. ARR reflects all fee changes due to contract renewals, non-renewals, expansion, cancellations, attrition, or renegotiations at a higher or lower fee arrangement that are effective as of the ARR reporting date. All components of the licensing and other arrangements that are not expected to recur (primarily perpetual licenses and professional services) are excluded from our ARR calculations. In some arrangements with multiple performance obligations, a portion of recurring license and support or subscription contract value is allocated to services revenue for revenue recognition purposes, but does not get allocated for purposes of calculating ARR. This revenue allocation generally only impacts the initial term of the contract. This means that if we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value would be recognized as services revenue, but our reported ARR amount would not be impacted. During the six months ended January 31, 2026, the recurring license and support or subscription contract value recognized as services revenue was $4.6 million.
Guidewire believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Guidewire’s financial condition and results of operations. Guidewire’s management uses these non-GAAP measures and other metrics to compare the Company’s performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation, and for budgeting and planning purposes. Guidewire believes that the use of these non-GAAP financial measures and other metrics provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing Guidewire’s financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors.
Guidewire’s management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in Guidewire’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Guidewire urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including the financial tables at the end of this press release, and not to rely on any single financial measure to evaluate Guidewire’s business.
About Guidewire
Guidewire is the platform P&C insurers trust to engage, innovate, and grow efficiently. More than 570 insurers in 43 countries, from new ventures to the largest and most complex in the world, rely on Guidewire products. With core systems leveraging data and analytics, digital, and artificial intelligence, Guidewire defines cloud platform excellence for P&C insurers.
We are proud of our unparalleled implementation record, with 1,700+ successful projects supported by the industry’s largest R&D team and SI partner ecosystem. Our marketplace represents the largest partner community in P&C, where customers can access hundreds of applications to accelerate integration, localization, and innovation.
Guidewire uses its Investor Relations website (ir.guidewire.com), X feed (@Guidewire_PandC), and LinkedIn page ( www.linkedin.com/company/guidewire-software ) as a means of disclosing information about the company and for complying with its disclosure obligations under Regulation FD. The information that is posted through these channels may be deemed material. Accordingly, investors should monitor these channels in addition to Guidewire’s press releases, filings with the Securities and Exchange Commission, public conference calls, and webcasts.
NOTE: For information about Guidewire’s trademarks, visit www.guidewire.com/legal-notices .
Cautionary Language Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and targets, our business and product strategies, our sales and pipeline momentum, and our market opportunities. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Guidewire’s control. Guidewire’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Guidewire’s most recent Forms 10-K and 10-Q filed with the Securities and Exchange Commission (the “SEC”) as well as other documents that may be filed by Guidewire from time to time with the SEC. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: fluctuations in our quarterly and annual operating results; our reliance on sales to, and renewals from, a relatively small number of large customers and the related substantial negotiating leverage of these customers; the length and complexity of our sales, product development, and implementation cycles; our competitive environment and changes thereto; our ability to effectively manage international expansion; issues in the development and use of artificial intelligence and machine learning technologies and the related evolving regulatory environment; our making long-term pricing commitments in our customer contracts based on available information and estimates about our future costs that may change; our ability to expand adoption of our cloud-based products and services, and the risk that any of our established products may fail to satisfy customer demands or maintain market acceptance; seasonal and other variations related to our customer agreements and related revenue recognition may cause significant fluctuations in our results of operations, ARR, and cash flows; our ability to develop, introduce, and market new and enhanced versions of our products and services; our ability to retain existing and hire new personnel, including managing a hybrid and geographically distributed workforce; errors or failures in our products or services, as well as service interruptions or failure of the third-party service providers we rely on; our ability to sell our services and products is highly dependent on the quality of our professional services and third-party global system integrators partners; use of AI by our workforce may present risks to our business; our services revenue produces lower gross margins than our license, subscription and support revenue; the impact of global events (including, without limitation, ongoing global conflicts, inflation, high interest rates, economic volatility, political uncertainties, tariffs, bank failures and associated financial instability, and supply chain issues); data security breaches of our cloud-based services and products or unauthorized access to our employees’ or our customers’ data; the impact of new regulations and laws (including, without limitation, security, privacy, AI and machine learning, tax regulations and laws, and accounting standards); assertions by third parties that we violate their intellectual property rights; stock price volatility regardless of our operating performance; and other risks and uncertainties. Past performance is not indicative of future results. The forward-looking statements included in this press release represent Guidewire’s views as of the date of this press release. Guidewire anticipates that subsequent events and developments will cause its views to change. Guidewire undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Guidewire’s views as of any date subsequent to the date of this press release.
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(unaudited, in thousands) | ||||||||
January 31, 2026 | July 31, 2 025 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 407,946 | $ | 697,902 | ||||
Short-term investments | 511,221 | 451,541 | ||||||
Accounts receivable, net | 162,937 | 140,639 | ||||||
Unbilled accounts receivable, net | 174,651 | 130,959 | ||||||
Prepaid expenses and other current assets | 89,434 | 86,374 | ||||||
Total current assets | 1,346,188 | 1,507,415 | ||||||
Long-term investments | 432,255 | 333,754 | ||||||
Unbilled accounts receivable, net | 83 | 670 | ||||||
Property and equipment, net | 65,315 | 60,436 | ||||||
Operating lease assets | 37,430 | 39,309 | ||||||
Intangible assets, net | 19,833 | 12,042 | ||||||
Goodwill | 422,113 | 393,978 | ||||||
Deferred tax assets, net | 292,842 | 297,234 | ||||||
Other assets | 75,686 | 76,261 | ||||||
TOTAL ASSETS | $ | 2,691,745 | $ | 2,721,099 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 28,946 | $ | 28,797 | ||||
Accrued employee compensation | 84,697 | 140,613 | ||||||
Deferred revenue, net | 307,646 | 340,253 | ||||||
Other current liabilities | 37,694 | 35,139 | ||||||
Total current liabilities | 458,983 | 544,802 | ||||||
Lease liabilities | 28,673 | 30,687 | ||||||
Convertible senior notes, net | 676,323 | 674,568 | ||||||
Deferred revenue, net | 4,977 | 4,533 | ||||||
Other liabilities | 12,171 | 9,279 | ||||||
Total liabilities | 1,181,127 | 1,263,869 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Common stock | 8 | 8 | ||||||
Additional paid-in capital | 2,124,589 | 2,020,393 | ||||||
Accumulated other comprehensive income (loss) | (2,959 | ) | (8,922 | ) | ||||
Retained earnings (accumulated deficit) | (611,021 | ) | (554,249 | ) | ||||
Total stockholders’ equity | 1,510,618 | 1,457,230 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,691,745 | $ | 2,721,099 |
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(unaudited, in thousands except share and per share data) | ||||||||||||||||
Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Revenue: | ||||||||||||||||
Subscription and support | $ | 237,209 | $ | 177,838 | $ | 459,412 | $ | 347,580 | ||||||||
License | 59,528 | 63,694 | 101,495 | 101,064 | ||||||||||||
Services | 62,358 | 47,948 | 130,827 | 103,737 | ||||||||||||
Total revenue | 359,095 | 289,480 | 691,734 | 552,381 | ||||||||||||
Cost of revenue (1) : | ||||||||||||||||
Subscription and support | 63,928 | 59,096 | 127,854 | 113,120 | ||||||||||||
License | 442 | 942 | 1,086 | 1,823 | ||||||||||||
Services | 63,205 | 50,290 | 121,750 | 99,894 | ||||||||||||
Total cost of revenue | 127,574 | 110,328 | 250,690 | 214,837 | ||||||||||||
Gross profit: | ||||||||||||||||
Subscription and support | 173,281 | 118,742 | 331,558 | 234,460 | ||||||||||||
License | 59,086 | 62,752 | 100,409 | 99,241 | ||||||||||||
Services | (847 | ) | (2,342 | ) | 9,077 | 3,843 | ||||||||||
Total gross profit | 231,521 | 179,152 | 441,044 | 337,544 | ||||||||||||
Operating expenses (1) : | ||||||||||||||||
Research and development | 83,324 | 70,268 | 161,642 | 139,148 | ||||||||||||
Sales and marketing | 61,475 | 55,452 | 125,733 | 106,930 | ||||||||||||
General and administrative | 48,281 | 41,709 | 96,750 | 84,463 | ||||||||||||
Total operating expenses | 193,080 | 167,429 | 384,125 | 330,541 | ||||||||||||
Income (loss) from operations | 38,441 | 11,723 | 56,919 | 7,003 | ||||||||||||
Interest income | 12,487 | 15,722 | 27,137 | 29,328 | ||||||||||||
Interest expense | (3,334 | ) | (4,183 | ) | (6,646 | ) | (6,245 | ) | ||||||||
Other income (expense), net | 26,958 | (66,289 | ) | 21,644 | (70,344 | ) | ||||||||||
Income (loss) before provision for (benefit from) income taxes | 74,552 | (43,027 | ) | 99,054 | (40,258 | ) | ||||||||||
Provision for (benefit from) income taxes | 14,442 | (5,750 | ) | 7,636 | (12,120 | ) | ||||||||||
Net income (loss) | $ | 60,110 | $ | (37,277 | ) | $ | 91,418 | $ | (28,138 | ) | ||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 0.71 | $ | (0.45 | ) | $ | 1.08 | $ | (0.34 | ) | ||||||
Diluted | $ | 0.70 | $ | (0.45 | ) | $ | 1.06 | $ | (0.34 | ) | ||||||
Shares used in computing net income (loss) per share: | ||||||||||||||||
Basic | 84,858,179 | 83,705,700 | 84,819,190 | 83,490,968 | ||||||||||||
Diluted | 86,116,567 | 83,705,700 | 86,339,391 | 83,490,968 |
(1) Amounts include stock-based compensation expense as follows:
Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Stock-based compensation expense: | ||||||||||||||||
Cost of subscription and support revenue | $ | 3,596 | $ | 3,773 | $ | 7,046 | $ | 6,913 | ||||||||
Cost of license revenue | — | 36 | — | 72 | ||||||||||||
Cost of services revenue | 6,395 | 5,361 | 12,095 | 10,163 | ||||||||||||
Research and development | 12,957 | 10,469 | 24,216 | 20,293 | ||||||||||||
Sales and marketing | 11,594 | 10,880 | 23,416 | 20,568 | ||||||||||||
General and administrative | 12,216 | 10,429 | 23,301 | 20,999 | ||||||||||||
Total stock-based compensation expense | $ | 46,758 | $ | 40,948 | $ | 90,074 | $ | 79,008 |
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(unaudited, in thousands) | ||||||||||||||||
Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income (loss) | $ | 60,110 | $ | (37,277 | ) | $ | 91,418 | $ | (28,138 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation and amortization | 7,040 | 5,728 | 13,402 | 11,573 | ||||||||||||
Amortization of debt issuance costs | 984 | 1,179 | 1,964 | 1,724 | ||||||||||||
Amortization of contract costs | 8,502 | 7,453 | 17,304 | 15,233 | ||||||||||||
Stock-based compensation | 46,758 | 40,948 | 90,074 | 79,008 | ||||||||||||
Changes to allowance for credit losses and revenue reserves | (21 | ) | (167 | ) | 2,337 | 1,090 | ||||||||||
Deferred income tax | 9,993 | (6,204 | ) | 1,466 | (14,159 | ) | ||||||||||
Amortization of premium (accretion of discount) on available-for-sale securities, net | (2,060 | ) | (3,321 | ) | (4,008 | ) | (6,549 | ) | ||||||||
Gain on sale of strategic investments | — | (3,671 | ) | — | (3,671 | ) | ||||||||||
Changes in fair value of strategic investments | (15 | ) | 291 | 45 | 238 | |||||||||||
Loss on retirement of debt | — | 53,265 | — | 53,565 | ||||||||||||
Other non-cash items affecting net income (loss) | (10 | ) | 17 | 7 | 3 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (67,341 | ) | (25,792 | ) | (23,665 | ) | 12,817 | |||||||||
Unbilled accounts receivable | (11,625 | ) | 14,795 | (43,095 | ) | (24,094 | ) | |||||||||
Prepaid expenses and other assets | (9,571 | ) | (8,275 | ) | (14,281 | ) | (17,207 | ) | ||||||||
Operating lease assets | 206 | (1,149 | ) | 1,879 | 608 | |||||||||||
Accounts payable | (2,451 | ) | (6,056 | ) | 1,813 | 10,150 | ||||||||||
Accrued employee compensation | 11,973 | 9,667 | (57,657 | ) | (46,878 | ) | ||||||||||
Deferred revenue | 56,270 | 40,585 | (32,515 | ) | (17,522 | ) | ||||||||||
Lease liabilities | 207 | 1,534 | (1,330 | ) | (151 | ) | ||||||||||
Other liabilities | 3,097 | 2,441 | (510 | ) | (3,954 | ) | ||||||||||
Net cash provided by (used in) operating activities | 112,046 | 85,991 | 44,648 | 23,686 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Purchases of available-for-sale securities | (217,024 | ) | (218,093 | ) | (535,549 | ) | (429,742 | ) | ||||||||
Maturities and sales of available-for-sale securities | 193,217 | 163,215 | 382,943 | 303,111 | ||||||||||||
Purchases of property and equipment | (3,284 | ) | (790 | ) | (8,162 | ) | (1,633 | ) | ||||||||
Capitalized software development costs | (3,104 | ) | (2,923 | ) | (8,192 | ) | (7,156 | ) | ||||||||
Acquisition of strategic investments | (2,348 | ) | — | (2,348 | ) | (772 | ) | |||||||||
Sale of strategic investment | — | 5,671 | — | 5,671 | ||||||||||||
Acquisition of business, net of acquired cash | (33,252 | ) | — | (33,252 | ) | — | ||||||||||
Net cash provided by (used in) investing activities | (65,795 | ) | (52,920 | ) | (204,560 | ) | (130,521 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs | — | (910 | ) | — | 671,840 | |||||||||||
Payment for the retirement of convertible senior notes | — | (153,141 | ) | — | (353,535 | ) | ||||||||||
Purchase of capped calls | — | — | — | (58,788 | ) | |||||||||||
Payment of revolving credit facility costs | — | (2,065 | ) | — | (2,065 | ) | ||||||||||
Proceeds from issuance of common stock under employee stock purchase plan | 13,364 | — | 13,364 | — | ||||||||||||
Proceeds from issuance of common stock upon exercise of stock options | 118 | 525 | 531 | 2,464 | ||||||||||||
Repurchase and retirement of common stock | (148,192 | ) | — | (148,192 | ) | — | ||||||||||
Net cash provided by (used in) financing activities | (134,710 | ) | (155,591 | ) | (134,297 | ) | 259,916 | |||||||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | 3,175 | (3,554 | ) | 3,061 | (3,585 | ) | ||||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (85,284 | ) | (126,074 | ) | (291,148 | ) | 149,496 | |||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period | 493,230 | 824,754 | 699,094 | 549,184 | ||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period | $ | 407,946 | $ | 698,680 | $ | 407,946 | $ | 698,680 |
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||
(unaudited, in thousands) | ||||||||||||||||
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below: | ||||||||||||||||
Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Gross profit reconciliation: | ||||||||||||||||
GAAP gross profit | $ | 231,521 | $ | 179,152 | $ | 441,044 | $ | 337,544 | ||||||||
Non-GAAP adjustments: | ||||||||||||||||
Stock-based compensation | 9,991 | 9,170 | 19,141 | 17,148 | ||||||||||||
Amortization of intangibles | 1,057 | 485 | 1,864 | 970 | ||||||||||||
Non-GAAP gross profit | $ | 242,569 | $ | 188,807 | $ | 462,049 | $ | 355,662 | ||||||||
Income (loss) from operations reconciliation: | ||||||||||||||||
GAAP income (loss) from operations | $ | 38,441 | $ | 11,723 | $ | 56,919 | $ | 7,003 | ||||||||
Non-GAAP adjustments: | ||||||||||||||||
Stock-based compensation | 46,758 | 40,948 | 90,074 | 79,008 | ||||||||||||
Amortization of intangibles | 1,748 | 1,278 | 3,203 | 2,645 | ||||||||||||
Acquisition consideration holdback | 447 | — | 624 | — | ||||||||||||
Non-GAAP income (loss) from operations | $ | 87,394 | $ | 53,949 | $ | 150,820 | $ | 88,656 | ||||||||
Net income (loss) reconciliation: | ||||||||||||||||
GAAP net income (loss) | $ | 60,110 | $ | (37,277 | ) | $ | 91,418 | $ | (28,138 | ) | ||||||
Non-GAAP adjustments: | ||||||||||||||||
Stock-based compensation | 46,758 | 40,948 | 90,074 | 79,008 | ||||||||||||
Amortization of intangibles | 1,748 | 1,278 | 3,203 | 2,645 | ||||||||||||
Acquisition consideration holdback | 447 | — | 624 | — | ||||||||||||
Amortization of debt issuance costs | 984 | 1,179 | 1,963 | 1,724 | ||||||||||||
Changes in fair value of strategic investments | (15 | ) | 291 | 45 | 238 | |||||||||||
Gain on sale of strategic investments | — | (3,671 | ) | — | (3,671 | ) | ||||||||||
Retirement of debt | — | 53,265 | — | 53,565 | ||||||||||||
Tax impact of non-GAAP adjustments | (9,345 | ) | (12,084 | ) | (29,680 | ) | (24,751 | ) | ||||||||
Non-GAAP net income (loss) | $ | 100,687 | $ | 43,929 | $ | 157,647 | $ | 80,620 | ||||||||
Tax provision (benefit) reconciliation: | ||||||||||||||||
GAAP tax provision (benefit) | $ | 14,442 | $ | (5,750 | ) | $ | 7,636 | $ | (12,120 | ) | ||||||
Non-GAAP adjustments: | ||||||||||||||||
Stock-based compensation | 8,996 | 5,160 | 17,310 | 10,735 | ||||||||||||
Amortization of intangibles | 336 | 161 | 615 | 361 | ||||||||||||
Acquisition consideration holdback | 86 | — | 120 | — | ||||||||||||
Amortization of debt issuance costs | 189 | 149 | 377 | 229 | ||||||||||||
Changes in fair value of strategic investments | (3 | ) | 37 | 9 | 29 | |||||||||||
Gain on sale of strategic investments | — | (463 | ) | — | (463 | ) | ||||||||||
Retirement of debt | — | 6,712 | — | 6,756 | ||||||||||||
Tax impact of non-GAAP adjustments | (260 | ) | 328 | 11,249 | 7,104 | |||||||||||
Non-GAAP tax provision (benefit) | $ | 23,787 | $ | 6,334 | $ | 37,317 | $ | 12,631 |
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||
(unaudited, in thousands except share and per share data) | ||||||||||||||||
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below: | ||||||||||||||||
Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Net income (loss) per share reconciliation: | ||||||||||||||||
GAAP net income (loss) per share – diluted | $ | 0.70 | $ | (0.45 | ) | $ | 1.06 | $ | (0.34 | ) | ||||||
Non-GAAP adjustments: | ||||||||||||||||
Stock-based compensation | 0.54 | 0.49 | 1.04 | 0.95 | ||||||||||||
Amortization of intangibles | 0.02 | 0.02 | 0.04 | 0.03 | ||||||||||||
Acquisition consideration holdback | — | — | — | — | ||||||||||||
Amortization of debt issuance costs | 0.01 | 0.01 | 0.02 | 0.02 | ||||||||||||
Changes in fair value of strategic investments | — | — | — | — | ||||||||||||
Gain on sale of strategic investments | — | (0.04 | ) | — | (0.04 | ) | ||||||||||
Retirement of debt | — | 0.64 | — | 0.64 | ||||||||||||
Tax impact of non-GAAP adjustments | (0.11 | ) | (0.14 | ) | (0.34 | ) | (0.30 | ) | ||||||||
Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation | — | (0.02 | ) | — | (0.02 | ) | ||||||||||
Non-GAAP net income (loss) per share – diluted | $ | 1.17 | $ | 0.51 | $ | 1.83 | $ | 0.94 | ||||||||
Shares used in computing non-GAAP net income (loss) per share amounts: | ||||||||||||||||
GAAP weighted average shares – diluted | 86,116,567 | 83,705,700 | 86,339,391 | 83,490,968 | ||||||||||||
Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation | — | 2,510,517 | — | 2,494,953 | ||||||||||||
GAAP and pro forma weighted average shares — diluted | 86,116,567 | 86,216,217 | 86,339,391 | 85,985,921 | ||||||||||||
The following table summarizes our free cash flow for the periods indicated below: | ||||||||||||||||
Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Free cash flow: | ||||||||||||||||
Net cash provided by (used in) operating activities | $ | 112,046 | $ | 85,991 | $ | 44,648 | $ | 23,686 | ||||||||
Purchases of property and equipment | (3,284 | ) | (790 | ) | (8,162 | ) | (1,633 | ) | ||||||||
Capitalized software development costs | (3,104 | ) | (2,923 | ) | (8,192 | ) | (7,156 | ) | ||||||||
Free cash flow | $ | 105,658 | $ | 82,278 | $ | 28,294 | $ | 14,897 |
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||
Reconciliation of GAAP to Non-GAAP Outlook | ||||||||
The following table reconciles the specific items excluded from GAAP outlook in the calculation of non-GAAP outlook for the periods indicated below (in millions): | ||||||||
Third Quarter Fiscal Year 2026 | Fiscal Year 2026 | |||||||
Income (loss) from operations outlook reconciliation: | ||||||||
GAAP income (loss) from operations | $11 | — | $17 | $100 | — | $110 | ||
Non-GAAP adjustments: | ||||||||
Stock-based compensation | 46 | — | 46 | 185 | — | 185 | ||
Amortization of intangibles & other | 2 | — | 2 | 9 | — | 9 | ||
Non-GAAP income (loss) from operations | $59 | — | $65 | $293 | — | $303 |
Certain figures included in this document have been subjected to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260305249334/en/
Investor Contact:
Alex Hughes
Guidewire
(650) 356-4921
ir@guidewire.com
Media Contact:
Melissa Cobb
Guidewire
(650) 464-1177
mcobb@guidewire.com
FAQ**
Given that Guidewire Software Inc. (NYSE: GWRE) reported a substantial ARR growth of 22% year-over-year, what specific strategies initiated this growth and how sustainable are these strategies moving forward?
How does Guidewire Software Inc. (GWRE) plan to manage the 7% decrease in license revenue while maintaining overall revenue growth? What measures are being taken to address the decline in this segment?
With a new share repurchase program authorized for $500 million, what is Guidewire Software Inc. (GWRE)'s rationale behind this decision, and how does it plan to balance this with ongoing investments in innovation?
Considering the net income turnaround from a loss in Q2 FY2025 to a profit in Q2 FY2026, what key factors contributed to this change for Guidewire Software Inc. (GWRE), and how does management plan to sustain this profitability?
**MWN-AI FAQ is based on asking OpenAI questions about Guidewire Software Inc. (NYSE: GWRE).
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