Guidewire Software (GWRE - Free Report) reported non-GAAP earnings of 3 cents per share in fourh-quarter fiscal 2022 (ended Jul 31, 2022), surpassing the Zacks Consensus Estimate of a loss of 4 cents. However, this compares unfavorably with the year-ago quarter’s non-GAAP earnings of 37 cents per share.
The company reported revenues of $244.6 million, rising 7% year over year and beating the Zacks Consensus Estimate by 6.6%.
Guidewire Cloud continued to gain momentum with 16 cloud deals in the reported quarter among new and existing clients.
For the fiscal year, the company reported a non-GAAP loss of 51 cents per share compared with non-GAAP earnings of 49 cents per share in the previous fiscal year. Revenues for the year came in at $812.6 million, up 9% on a year-over-year basis.
Quarter in Detail
Subscription and support revenues (38.3% of total revenues) soared 34% from the year-ago quarter’s levels to $93.6 million, owing to higher subscription revenues. Subscription revenues surged 49.9% year over year to $72.8 million. In the fiscal, Subscription and support revenue increased 36% year over year to $343.7 million.
License revenues (38.7% of total revenues) declined 14% year over year to $94.8 million. In the fiscal, license revenues fell 15% year over year to $258.6 million.
Services revenues (23% of total revenues) climbed 13% year over year to $56.2 million, driven by increased cloud implementation programs. For the fiscal year, service revenue increased 12% year over year to $210.3 million
Annual recurring revenues (ARR) were $664 million as of Jul 31, 2022, up 14.1% year-over-year and 17% on a constant-currency basis, driven by new sales and deal ramps.
Non-GAAP gross margin contracted 890 basis points (bps) on a year-over-year basis to 51.9%. This year-over-year decline was due to the revenue mix shift toward subscription and support revenues and away from higher-margin term license revenues.
Subscription and support gross margin came in at 44.2%, up 460 bps from reported in the year-ago quarter. Services’ non-GAAP gross margin was negative 13% compared with a gross margin of 8.6% in the year-ago quarter.
Total operating expenses increased 14.4% year over year to $148.1 million. Non-GAAP operating income was $5.3 million compared with the operating income of $32 million reported in the year-ago quarter.
Financial Details
As of Jul 31, 2022, cash and cash equivalents and short-term investments came in at $1.2 billion compared with $1.1 billion as of Apr 30, 2022.
Guidewire generated $83.6 million in cash from operations during the fiscal fourth quarter, with a free cash flow of nearly $79 million.
For fiscal 2022, Guidewire used $37.9 million in cash for operations, with a free cash outflow of nearly $59.7 million.
Guidance
For first-quarter fiscal 2023, revenues are expected in the range of $190-$195 million. ARR is expected to be between $667 million and $670 million. Non-GAAP operating income (loss) is expected between $(45) million and $(40) million. GAAP operating income (loss) is expected to be between $(82) million and $(77) million.
For fiscal 2023, the company expects total revenues between $885 million and $895 million. ARR is expected to be between $745 million and $760 million.
Non-GAAP operating loss for fiscal 2023 is projected in the range of $20-$30 million. For fiscal 2022, cash flow from operations is projected in the range of $50-$80 million.
Zacks Rank & Stocks to Consider
At present, Guidewire carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Cadence Design Systems (CDNS - Free Report) , Badger Meter (BMI - Free Report) and Arista Networks (ANET - Free Report) . While Badger Meter and Arista Networks sport a Zacks Rank #1 (Strong Buy), Cadence carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS are up 1.5% in the past year.
The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 6% in the past 60 days.
Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 10.7% of their value in the past year.
The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 9.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.
Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 30.8% in the past year.
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Guidewire Software (GWRE - Free Report) reported non-GAAP earnings of 3 cents per share in fourh-quarter fiscal 2022 (ended Jul 31, 2022), surpassing the Zacks Consensus Estimate of a loss of 4 cents. However, this compares unfavorably with the year-ago quarter’s non-GAAP earnings of 37 cents per share.
The company reported revenues of $244.6 million, rising 7% year over year and beating the Zacks Consensus Estimate by 6.6%.
Guidewire Cloud continued to gain momentum with 16 cloud deals in the reported quarter among new and existing clients.
For the fiscal year, the company reported a non-GAAP loss of 51 cents per share compared with non-GAAP earnings of 49 cents per share in the previous fiscal year. Revenues for the year came in at $812.6 million, up 9% on a year-over-year basis.
Quarter in Detail
Subscription and support revenues (38.3% of total revenues) soared 34% from the year-ago quarter’s levels to $93.6 million, owing to higher subscription revenues. Subscription revenues surged 49.9% year over year to $72.8 million. In the fiscal, Subscription and support revenue increased 36% year over year to $343.7 million.
License revenues (38.7% of total revenues) declined 14% year over year to $94.8 million. In the fiscal, license revenues fell 15% year over year to $258.6 million.
Services revenues (23% of total revenues) climbed 13% year over year to $56.2 million, driven by increased cloud implementation programs. For the fiscal year, service revenue increased 12% year over year to $210.3 million
Annual recurring revenues (ARR) were $664 million as of Jul 31, 2022, up 14.1% year-over-year and 17% on a constant-currency basis, driven by new sales and deal ramps.
Non-GAAP gross margin contracted 890 basis points (bps) on a year-over-year basis to 51.9%. This year-over-year decline was due to the revenue mix shift toward subscription and support revenues and away from higher-margin term license revenues.
Subscription and support gross margin came in at 44.2%, up 460 bps from reported in the year-ago quarter. Services’ non-GAAP gross margin was negative 13% compared with a gross margin of 8.6% in the year-ago quarter.
Total operating expenses increased 14.4% year over year to $148.1 million. Non-GAAP operating income was $5.3 million compared with the operating income of $32 million reported in the year-ago quarter.
Financial Details
As of Jul 31, 2022, cash and cash equivalents and short-term investments came in at $1.2 billion compared with $1.1 billion as of Apr 30, 2022.
Guidewire generated $83.6 million in cash from operations during the fiscal fourth quarter, with a free cash flow of nearly $79 million.
For fiscal 2022, Guidewire used $37.9 million in cash for operations, with a free cash outflow of nearly $59.7 million.
Guidance
For first-quarter fiscal 2023, revenues are expected in the range of $190-$195 million. ARR is expected to be between $667 million and $670 million. Non-GAAP operating income (loss) is expected between $(45) million and $(40) million. GAAP operating income (loss) is expected to be between $(82) million and $(77) million.
For fiscal 2023, the company expects total revenues between $885 million and $895 million. ARR is expected to be between $745 million and $760 million.
Non-GAAP operating loss for fiscal 2023 is projected in the range of $20-$30 million. For fiscal 2022, cash flow from operations is projected in the range of $50-$80 million.
Zacks Rank & Stocks to Consider
At present, Guidewire carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Cadence Design Systems (CDNS - Free Report) , Badger Meter (BMI - Free Report) and Arista Networks (ANET - Free Report) . While Badger Meter and Arista Networks sport a Zacks Rank #1 (Strong Buy), Cadence carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS are up 1.5% in the past year.
The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 6% in the past 60 days.
Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 10.7% of their value in the past year.
The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 9.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.
Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 30.8% in the past year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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