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Guidewire (GWRE) Q1 Earnings & Revenues Beat Estimates, Up Y/Y
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Guidewire Software (GWRE - Free Report) reported breakeven non-GAAP earnings per share (EPS) in first-quarter fiscal 2024 (ended Oct 31, 2023), which was narrower than the Zacks Consensus Estimate’s loss of 17 cents and year-ago quarter’s non-GAAP loss of 12 cents.
The company reported revenues of $207.4 million, rising 6% year over year and surpassing the Zacks Consensus Estimate by 3.2%.
Guidewire Cloud continued to gain momentum in the reported quarter with seven deal wins.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Subscription and support segment’s revenues (61.5% of total revenues) soared 29% from the year-ago quarter to $127.6 million.
License’s revenues (16.4%) were down 17% year over year to $34 million.
Services’ revenues (22.1%) fell 17% year over year to $45.8 million.
Annual recurring revenues (ARR) were $770 million as of Oct 31, up 0.9% year over year.
Non-GAAP gross margin expanded to 58% from 42% on a year-over-year basis.
Subscription and support segment’s gross margin increased to 65% from 49% on a year-over-year basis due to increased cloud infrastructure efficiency. Services’ non-GAAP gross margin was 10% against a gross margin of (9)% in the year-ago reported quarter.
Total operating expenses decreased 0.4% year over year to $146.1 million. Non-GAAP operating income was $4.1 million against the non-GAAP operating loss of $35.8 million reported in the year-ago quarter.
Financial Details
As of Oct 31, cash and cash equivalents and short-term investments were $712.9 million compared with $798.7 million on Jul 31, 2023.
Guidewire used $72.1 million in cash from operations during the quarter under review, with free cash outflow of nearly $76.7 million.
Outlook
For second-quarter fiscal 2024, revenues are expected to be in the range of $237-$243 million. ARR is projected to be between $793 million and $798 million. Non-GAAP operating income is estimated to be between $15 million and $20 million.
For fiscal 2024, the company continues to expect total revenues between $976 million and $986 million. ARR is projected to be in the range of $846-$858 million.
Non-GAAP operating income (loss) is now estimated to be between $82 million and $92 million compared with the previous guidance of $(62) million and $72 million.
Cash flow from operations is now anticipated to be in the range of $115-$135 million compared with the previous guidance of $95-$125 million.
Zacks Rank & Stocks to Consider
Guidewire currently carries a Zacks Rank #3 (Hold)
The Zacks Consensus Estimate for Pegasystems’ 2023 EPS has improved 21.2% in the past 60 days to $1.77. PEGA delivered an average earnings surprise of 1,250.2% in the trailing four quarters. Shares of PEGA have soared 43.4% in the past year.
The Zacks Consensus Estimate for Flex’s fiscal 2024 EPS has increased 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%.
Flex’s earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 11%. Shares of the company have risen 21% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 2.8% in the past 60 days to $8.00. Watts Water’s long-term earnings growth rate is 7.8%.
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Guidewire (GWRE) Q1 Earnings & Revenues Beat Estimates, Up Y/Y
Guidewire Software (GWRE - Free Report) reported breakeven non-GAAP earnings per share (EPS) in first-quarter fiscal 2024 (ended Oct 31, 2023), which was narrower than the Zacks Consensus Estimate’s loss of 17 cents and year-ago quarter’s non-GAAP loss of 12 cents.
The company reported revenues of $207.4 million, rising 6% year over year and surpassing the Zacks Consensus Estimate by 3.2%.
Guidewire Cloud continued to gain momentum in the reported quarter with seven deal wins.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. Quote
Quarter in Detail
Subscription and support segment’s revenues (61.5% of total revenues) soared 29% from the year-ago quarter to $127.6 million.
License’s revenues (16.4%) were down 17% year over year to $34 million.
Services’ revenues (22.1%) fell 17% year over year to $45.8 million.
Annual recurring revenues (ARR) were $770 million as of Oct 31, up 0.9% year over year.
Non-GAAP gross margin expanded to 58% from 42% on a year-over-year basis.
Subscription and support segment’s gross margin increased to 65% from 49% on a year-over-year basis due to increased cloud infrastructure efficiency. Services’ non-GAAP gross margin was 10% against a gross margin of (9)% in the year-ago reported quarter.
Total operating expenses decreased 0.4% year over year to $146.1 million. Non-GAAP operating income was $4.1 million against the non-GAAP operating loss of $35.8 million reported in the year-ago quarter.
Financial Details
As of Oct 31, cash and cash equivalents and short-term investments were $712.9 million compared with $798.7 million on Jul 31, 2023.
Guidewire used $72.1 million in cash from operations during the quarter under review, with free cash outflow of nearly $76.7 million.
Outlook
For second-quarter fiscal 2024, revenues are expected to be in the range of $237-$243 million. ARR is projected to be between $793 million and $798 million. Non-GAAP operating income is estimated to be between $15 million and $20 million.
For fiscal 2024, the company continues to expect total revenues between $976 million and $986 million. ARR is projected to be in the range of $846-$858 million.
Non-GAAP operating income (loss) is now estimated to be between $82 million and $92 million compared with the previous guidance of $(62) million and $72 million.
Cash flow from operations is now anticipated to be in the range of $115-$135 million compared with the previous guidance of $95-$125 million.
Zacks Rank & Stocks to Consider
Guidewire currently carries a Zacks Rank #3 (Hold)
Some better-ranked stocks in the broader technology space are Pegasystems (PEGA - Free Report) , Flex (FLEX - Free Report) and Watts Water Technologies (WTS - Free Report) . Pegasystems and Flex presently sport a Zacks Rank #1 (Strong Buy), whereas Watts Water Technologies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Pegasystems’ 2023 EPS has improved 21.2% in the past 60 days to $1.77. PEGA delivered an average earnings surprise of 1,250.2% in the trailing four quarters. Shares of PEGA have soared 43.4% in the past year.
The Zacks Consensus Estimate for Flex’s fiscal 2024 EPS has increased 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%.
Flex’s earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 11%. Shares of the company have risen 21% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 2.8% in the past 60 days to $8.00. Watts Water’s long-term earnings growth rate is 7.8%.