Guidewire Announces First Quarter Fiscal Year 2026 Financial Results

SAN MATEO, Calif.--( BUSINESS WIRE)--Guidewire (NYSE: GWRE) today announced its financial results for the fiscal quarter ended October 31, 2025.

“We continue to see strong momentum for Guidewire Cloud Platform and we are off to a great start to the fiscal year,” said Mike Rosenbaum, chief executive officer, Guidewire. “This momentum was clear at our annual customer conference, Connections, where we launched new pricing and underwriting products that deliver intelligence and AI powered automation to P&C insurers.”

“First quarter results came in above the high end of our outlook on all metrics and informs our confidence to raise our outlook ranges for the fiscal year,” said Jeff Cooper, chief financial officer, Guidewire. “ARR growth of 22% year-over-year reflects the strong sales momentum we have established.”

First Quarter Fiscal Year 2026 Financial Highlights

Revenue

Profitability

Liquidity and Capital Resources

Business Outlook

Guidewire is issuing the following outlook for the second quarter of fiscal year 2026 based on current expectations:

Guidewire is issuing the following updated outlook for fiscal year 2026 based on current expectations:

Conference Call Information

What:

Guidewire First Quarter Fiscal Year 2026 Financial Results Conference Call

When:

Wednesday, December 3, 2025

Time:

2:00 p.m. PT (5:00 p.m. ET)

Dial-In:

(669) 444-9171

Meeting ID:

930 0540 5680

Password:

589958

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.

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 three months ended October 31, 2025, the recurring license and support or subscription contract value recognized as services revenue was $3.6 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, guidance, product strategy, market opportunities, and financial performance. 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; 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)

October 31,

2025

July 31,

2025

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

492,038

697,902

Short-term investments

519,861

451,541

Accounts receivable, net

94,600

140,639

Unbilled accounts receivable, net

163,016

130,959

Prepaid expenses and other current assets

87,509

86,374

Total current assets

1,357,024

1,507,415

Long-term investments

397,365

333,754

Unbilled accounts receivable, net

670

Property and equipment, net

65,199

60,436

Operating lease assets

37,636

39,309

Intangible assets, net

10,704

12,042

Goodwill

394,300

393,978

Deferred tax assets, net

305,494

297,234

Other assets

71,526

76,261

TOTAL ASSETS

2,639,331

2,721,099

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

33,557

28,797

Accrued employee compensation

70,300

140,613

Deferred revenue, net

253,537

340,253

Other current liabilities

32,464

35,139

Total current liabilities

389,858

544,802

Lease liabilities

29,057

30,687

Convertible senior notes, net

675,443

674,568

Deferred revenue, net

2,464

4,533

Other liabilities

9,091

9,279

Total liabilities

1,105,913

1,263,869

STOCKHOLDERS’ EQUITY:

Common stock

Additional paid-in capital

2,064,255

2,020,393

Accumulated other comprehensive income (loss)

(7,905

)

(8,922

)

Retained earnings (accumulated deficit)

(522,941

)

(554,249

)

Total stockholders’ equity

1,533,418

1,457,230

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

2,639,331

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 October 31,

2025

2024

Revenue:

Subscription and support

222,203

169,742

License

41,967

37,370

Services

68,469

55,789

Total revenue

332,639

262,901

Cost of revenue (1):

Subscription and support

63,927

54,024

License

644

881

Services

58,546

49,604

Total cost of revenue

123,117

104,509

Gross profit:

Subscription and support

158,276

115,718

License

41,323

36,489

Services

9,923

6,185

Total gross profit

209,522

158,392

Operating expenses (1):

Research and development

78,317

68,880

Sales and marketing

64,258

51,478

General and administrative

48,469

42,754

Total operating expenses

191,044

163,112

Income (loss) from operations

18,478

(4,720

)

Interest income

14,650

13,606

Interest expense

(3,312

)

(2,062

)

Other income (expense), net

(5,314

)

(4,055

)

Income (loss) before provision for (benefit from) income taxes

24,502

2,769

Provision for (benefit from) income taxes

(6,806

)

(6,370

)

Net income (loss)

31,308

9,139

Net income (loss) per share:

Basic

0.37

0.11

Diluted

0.36

0.11

Shares used in computing net income (loss) per share:

Basic

84,780,201

83,276,236

Diluted

86,451,737

85,960,868

(1)Amounts include stock-based compensation expense as follows:

Three Months Ended October 31,

2025

2024

Stock-based compensation expense:

Cost of subscription and support revenue

3,450

3,140

Cost of license revenue

—

Cost of services revenue

5,700

4,802

Research and development

11,259

9,824

Sales and marketing

11,822

9,688

General and administrative

11,085

10,570

Total stock-based compensation expense

43,316

38,060

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Three Months Ended October 31,

2025

2024

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

31,308

9,139

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

6,362

5,845

Amortization of debt issuance costs

980

545

Amortization of contract costs

8,802

7,780

Stock-based compensation

43,316

38,060

Changes to allowance for credit losses and revenue reserves

2,358

1,257

Deferred income tax

(8,527

)

(7,955

)

Amortization of premium (accretion of discount) on available-for-sale securities, net

(1,948

)

(3,228

)

Changes in fair value of strategic investments

(53

)

Other non-cash items affecting net income (loss)

286

Changes in operating assets and liabilities:

Accounts receivable

43,676

38,609

Unbilled accounts receivable

(31,470

)

(38,889

)

Prepaid expenses and other assets

(4,710

)

(8,932

)

Operating lease assets

1,673

1,757

Accounts payable

4,264

16,206

Accrued employee compensation

(69,630

)

(56,545

)

Deferred revenue

(88,785

)

(58,107

)

Lease liabilities

(1,537

)

(1,685

)

Other liabilities

(3,607

)

(6,395

)

Net cash provided by (used in) operating activities

(67,398

)

(62,305

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of available-for-sale securities

(318,525

)

(211,649

)

Maturities and sales of available-for-sale securities

189,726

139,896

Purchases of property and equipment

(4,878

)

(843

)

Capitalized software development costs

(5,088

)

(4,233

)

Acquisition of strategic investments

—

(772

)

Net cash provided by (used in) investing activities

(138,765

)

(77,601

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of convertible senior notes, net of issuance costs

—

672,750

Payment for the retirement of convertible senior notes

—

(200,394

)

Purchase of capped calls

—

(58,788

)

Proceeds from issuance of common stock upon exercise of stock options

413

1,939

Net cash provided by (used in) financing activities

413

415,507

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

(114

)

(31

)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

(205,864

)

275,570

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period

699,094

549,184

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period

493,230

824,754

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 October 31,

2025

2024

Gross profit reconciliation:

GAAP gross profit

209,522

158,392

Non-GAAP adjustments:

Stock-based compensation

9,150

7,978

Amortization of intangibles

808

485

Non-GAAP gross profit

219,480

166,855

Income (loss) from operations reconciliation:

GAAP income (loss) from operations

18,478

(4,720

)

Non-GAAP adjustments:

Stock-based compensation

43,316

38,060

Amortization of intangibles

1,455

1,367

Acquisition consideration holdback

177

—

Non-GAAP income (loss) from operations

63,426

34,707

Net income (loss) reconciliation:

GAAP net income (loss)

31,308

9,139

Non-GAAP adjustments:

Stock-based compensation

43,316

38,060

Amortization of intangibles

1,455

1,367

Acquisition consideration holdback

177

—

Amortization of debt issuance costs

980

545

Changes in fair value of strategic investments

(53

)

Retirement of debt

—

300

Tax impact of non-GAAP adjustments

(20,335

)

(12,667

)

Non-GAAP net income (loss)

56,961

36,691

Tax provision (benefit) reconciliation:

GAAP tax provision (benefit)

(6,806

)

(6,370

)

Non-GAAP adjustments:

Stock-based compensation

8,314

5,575

Amortization of intangibles

279

200

Acquisition consideration holdback

—

Amortization of debt issuance costs

188

Changes in fair value of strategic investments

)

Retirement of debt

—

Tax impact of non-GAAP adjustments

11,509

6,776

Non-GAAP tax provision (benefit)

13,530

6,297

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 October 31,

2025

2024

Net income (loss) per share reconciliation:

GAAP net income (loss) per share – diluted

0.36

0.11

Non-GAAP adjustments:

Stock-based compensation

0.51

0.44

Amortization of intangibles

0.02

Acquisition consideration holdback

—

Amortization of debt issuance costs

0.01

Changes in fair value of strategic investments

—

Retirement of debt

—

Tax impact of non-GAAP adjustments

(0.24

)

(0.15

)

Non-GAAP net income (loss) per share – diluted

0.66

0.43

Shares used in computing non-GAAP net income (loss) per share amounts:

GAAP and pro forma weighted average shares — diluted

86,451,737

85,960,868

The following table summarizes our free cash flow for the periods indicated below:

Three Months Ended October 31,

2025

2024

Free cash flow:

Net cash provided by (used in) operating activities

(67,398

)

(62,305

)

Purchases of property and equipment

(4,878

)

(843

)

Capitalized software development costs

(5,088

)

(4,233

)

Free cash flow

(77,364

)

(67,381

)

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):

Second Quarter

Fiscal Year 2026

Income (loss) from operations outlook reconciliation:

GAAP income (loss) from operations

$19

—

$25

$72

—

$88

Non-GAAP adjustments:

Stock-based compensation

—

185

—

185

Amortization of intangibles & other

—

Non-GAAP income (loss) from operations

$68

—

$74

$266

—

$282