Guidewire Software (GWRE - Free Report) reported fourth-quarter fiscal 2021 non-GAAP earnings of 37 cents per share, beating the Zacks Consensus Estimate by 32.1% but declining 55.4% year over year.
The company reported revenues of $229.4 million, which beat the Zacks Consensus Estimate by 3.3% but declined 5.8% year over year.
Guidewire closed a record 17 core cloud deals, including 16 for Insurance Suite in the fourth quarter.
Quarter in Detail
Subscription and support revenues (30.5% of total revenues) increased 29.3% from the year-ago quarter to $70 million due to higher subscription revenues, which jumped 47% to $48.6 million.
Support revenues were up 1.8% year over year to $21.4 million in the quarter under review.
License revenues (47.8% of total revenues) declined 20.3% year over year to $109.7 million while Services revenues (21.7% of total revenues) fell 4.2% year over year to $49.8 million.
Annual recurring revenues (ARR) were $575 million as of Jul 31, 2021, compared with $509 million as of Jul 30, 2020.
Non-GAAP gross margin contracted 810 basis points (bps) on a year-over-year basis to 60.8%.
Total operating expenses increased 16% year over year to $129.4 million.
Non-GAAP operating income was $32 million, down 58.1% year over year.
Balance Sheet
As of Jul 31, 2021, cash and cash equivalents and short-term investments came in at $1.1 billion compared with $1.3 billion as of Apr 30, 2021.
The company generated cash of $108.4 million from operating activities compared with $5.6 million reported in third-quarter fiscal 2021. Adjusted free cash flow was $82.7 million.
In the quarter under review, Guidewire repurchased 0.4 million shares worth $38.8 million.
Guidance
For first-quarter fiscal 2022, revenues are expected in the range of $162-$166 million. ARR is expected between $586 million and $590 million.
Non-GAAP operating loss is projected in the range of $23-$27 million.
For fiscal 2022, the company expects total revenues between $780 million and $790 million. ARR is expected between $657 million and $667 million.
Non-GAAP operating loss for fiscal 2022 is projected in the range of $28-$38 million.
For fiscal 2022, cash flow from operations is projected in the range of $30-$40 million.
Zacks Rank & Stocks to Consider
Guidewire currently has a Zacks Rank #3 (Hold).
Apple (AAPL - Free Report) , Advanced Micro Devices (AMD - Free Report) and Zscaler (ZS - Free Report) are better-ranked stocks in the broader computer & technology sector. All the three stocks carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long term earnings growth rate for Apple, AMD and Zscaler stands at 12.7%, 44.6% and 50.6%, respectively.
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Guidewire Software (GWRE - Free Report) reported fourth-quarter fiscal 2021 non-GAAP earnings of 37 cents per share, beating the Zacks Consensus Estimate by 32.1% but declining 55.4% year over year.
The company reported revenues of $229.4 million, which beat the Zacks Consensus Estimate by 3.3% but declined 5.8% year over year.
Guidewire closed a record 17 core cloud deals, including 16 for Insurance Suite in the fourth quarter.
Quarter in Detail
Subscription and support revenues (30.5% of total revenues) increased 29.3% from the year-ago quarter to $70 million due to higher subscription revenues, which jumped 47% to $48.6 million.
Support revenues were up 1.8% year over year to $21.4 million in the quarter under review.
License revenues (47.8% of total revenues) declined 20.3% year over year to $109.7 million while Services revenues (21.7% of total revenues) fell 4.2% year over year to $49.8 million.
Annual recurring revenues (ARR) were $575 million as of Jul 31, 2021, compared with $509 million as of Jul 30, 2020.
Non-GAAP gross margin contracted 810 basis points (bps) on a year-over-year basis to 60.8%.
Total operating expenses increased 16% year over year to $129.4 million.
Non-GAAP operating income was $32 million, down 58.1% year over year.
Balance Sheet
As of Jul 31, 2021, cash and cash equivalents and short-term investments came in at $1.1 billion compared with $1.3 billion as of Apr 30, 2021.
The company generated cash of $108.4 million from operating activities compared with $5.6 million reported in third-quarter fiscal 2021. Adjusted free cash flow was $82.7 million.
In the quarter under review, Guidewire repurchased 0.4 million shares worth $38.8 million.
Guidance
For first-quarter fiscal 2022, revenues are expected in the range of $162-$166 million. ARR is expected between $586 million and $590 million.
Non-GAAP operating loss is projected in the range of $23-$27 million.
For fiscal 2022, the company expects total revenues between $780 million and $790 million. ARR is expected between $657 million and $667 million.
Non-GAAP operating loss for fiscal 2022 is projected in the range of $28-$38 million.
For fiscal 2022, cash flow from operations is projected in the range of $30-$40 million.
Zacks Rank & Stocks to Consider
Guidewire currently has a Zacks Rank #3 (Hold).
Apple (AAPL - Free Report) , Advanced Micro Devices (AMD - Free Report) and Zscaler (ZS - Free Report) are better-ranked stocks in the broader computer & technology sector. All the three stocks carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long term earnings growth rate for Apple, AMD and Zscaler stands at 12.7%, 44.6% and 50.6%, respectively.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
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