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Guidewire Software (GWRE - Free Report) reported second-quarter fiscal 2022 (ended Jan 31, 2022) non-GAAP loss of 6 cents per share, narrower than the Zacks Consensus Estimate of loss of 11 cents. However, this compares unfavorably with the year-ago quarter’s earnings of 11 cents per share.
The company reported revenues of $204.6 million, rising 13.67% year over year and beating the Zacks Consensus Estimate of $198 million.
Guidewire Cloud continued to gain momentum with 11 cloud deals in the reported quarter, consisting of a mix of existing customer migrations and new customer deployments.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Subscription and support revenues (41.2% of total revenues) soared 42% from the year-ago quarter to $84.3 million due to higher subscription revenues, which jumped 64% year over year. The reported figure surpassed the consensus mark of $83 million.
License revenues (34.1% of total revenues) declined 10% year over year to $69.8 million. Nonetheless, the reported figure beat the consensus mark of $68 million.
Services revenues (24.7% of total revenues) climbed 19% year over year to $50.5 million. The reported figure topped the consensus mark of $49 million.
Annual recurring revenues (ARR) were $620 million as of Jan 31, 2022, compared with $582 million as of Jul 31, 2021.
Non-GAAP gross margin contracted 3% on a year-over-year basis to 53%. 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 was 47%, up from 43% reported in the year-ago quarter, primarily due to benefits of the cloud infrastructure cost controls put in place. Services gross margin was 3% compared to negative 2% a year ago due to higher billable utilization.
Total operating expenses increased 18.1% year over year to $136.1 million. Non-GAAP operating income was $3 million compared to the operating income of $7.5 million reported in the year-ago quarter. Non-GAAP net loss was $4.8 million for the reported quarter against the net income of $9.0 million reported in the last-year quarter.
Financial Details
As of Jan 31, 2022, cash and cash equivalents and short-term investments came in at $1.1 billion compared with $1.3 billion as of Jul 31, 2021.
Guidewire used $110.1 million in cash from operations during the first half of fiscal year 2022 and $43.8 million for the acquisition of HazardHub during the first quarter of fiscal year 2022.
In the quarter under review, Guidewire repurchased 0.1 million shares worth $11.2 million, which marks the completion of its authorized share repurchase program of $200 million.
Guidance
For third-quarter fiscal 2022, revenues are expected in the range of $186-$190 million. ARR is expected between $632 million and $635 million. Non-GAAP operating loss is projected in the range of $25-$29 million.
The company also updated its outlook for fiscal year 2022 based on current expectations. For fiscal 2022, the company now expects total revenues between $784 million and $792 million, higher than the previous outlook of $780 million and $790 million. ARR is expected between $664 million and $670 million, above the previous forecast of $659 million to $669 million.
Non-GAAP operating loss for fiscal 2022 is projected in the range of $42-$50 million, narrower than the loss of $48-$58 million forecasted earlier. For fiscal 2022, cash flow from operations is projected in the range of $10-$20 million, in line with the previous guidance.
Zacks Rank & Stocks to Consider
At present, Guidewire carries a Zacks Rank #3 (Hold).
Progress Software has a projected earnings growth rate of 3.62% for fiscal 2022. The Zacks Consensus Estimate for Progress Software’s fiscal 2022 earnings has been revised upward by 6 cents in the past 60 days. The long-term earnings growth rate of PRGS is pegged at 2%.
Progress Software’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 26.8%. Shares of PRGS have lost 4% in the past year.
Badger Meter has a projected earnings growth rate of 5.77% for 2022. The Zacks Consensus Estimate for Badger Meter’s 2022 earnings has been revised upward by 19 cents in the past 60 days.
Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and met estimates once, the average surprise being 14%. Shares of BMI have dropped 8% in the past year.
Iridium has a projected earnings growth rate of 271.43% for 2022. The Zacks Consensus Estimate for Iridium’s 2022 earnings has been revised upward by a penny in the past 90 days.
Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and met estimates twice, the average surprise being 39.4%. Shares of IRDM have dropped 2% in the past year.
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Guidewire (GWRE) Posts Q2 Loss, Tops Revenue Mark, Lifts '22 View
Guidewire Software (GWRE - Free Report) reported second-quarter fiscal 2022 (ended Jan 31, 2022) non-GAAP loss of 6 cents per share, narrower than the Zacks Consensus Estimate of loss of 11 cents. However, this compares unfavorably with the year-ago quarter’s earnings of 11 cents per share.
The company reported revenues of $204.6 million, rising 13.67% year over year and beating the Zacks Consensus Estimate of $198 million.
Guidewire Cloud continued to gain momentum with 11 cloud deals in the reported quarter, consisting of a mix of existing customer migrations and new customer deployments.
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 revenues (41.2% of total revenues) soared 42% from the year-ago quarter to $84.3 million due to higher subscription revenues, which jumped 64% year over year. The reported figure surpassed the consensus mark of $83 million.
License revenues (34.1% of total revenues) declined 10% year over year to $69.8 million. Nonetheless, the reported figure beat the consensus mark of $68 million.
Services revenues (24.7% of total revenues) climbed 19% year over year to $50.5 million. The reported figure topped the consensus mark of $49 million.
Annual recurring revenues (ARR) were $620 million as of Jan 31, 2022, compared with $582 million as of Jul 31, 2021.
Non-GAAP gross margin contracted 3% on a year-over-year basis to 53%. 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 was 47%, up from 43% reported in the year-ago quarter, primarily due to benefits of the cloud infrastructure cost controls put in place. Services gross margin was 3% compared to negative 2% a year ago due to higher billable utilization.
Total operating expenses increased 18.1% year over year to $136.1 million. Non-GAAP operating income was $3 million compared to the operating income of $7.5 million reported in the year-ago quarter. Non-GAAP net loss was $4.8 million for the reported quarter against the net income of $9.0 million reported in the last-year quarter.
Financial Details
As of Jan 31, 2022, cash and cash equivalents and short-term investments came in at $1.1 billion compared with $1.3 billion as of Jul 31, 2021.
Guidewire used $110.1 million in cash from operations during the first half of fiscal year 2022 and $43.8 million for the acquisition of HazardHub during the first quarter of fiscal year 2022.
In the quarter under review, Guidewire repurchased 0.1 million shares worth $11.2 million, which marks the completion of its authorized share repurchase program of $200 million.
Guidance
For third-quarter fiscal 2022, revenues are expected in the range of $186-$190 million. ARR is expected between $632 million and $635 million. Non-GAAP operating loss is projected in the range of $25-$29 million.
The company also updated its outlook for fiscal year 2022 based on current expectations. For fiscal 2022, the company now expects total revenues between $784 million and $792 million, higher than the previous outlook of $780 million and $790 million. ARR is expected between $664 million and $670 million, above the previous forecast of $659 million to $669 million.
Non-GAAP operating loss for fiscal 2022 is projected in the range of $42-$50 million, narrower than the loss of $48-$58 million forecasted earlier. For fiscal 2022, cash flow from operations is projected in the range of $10-$20 million, in line with the previous guidance.
Zacks Rank & Stocks to Consider
At present, Guidewire carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space include Progress Software (PRGS - Free Report) , Badger Meter (BMI - Free Report) and Iridium Communications (IRDM - Free Report) . While Progress Software and Badger Meter sport a Zacks Rank #1 (Strong Buy), Iridium carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Progress Software has a projected earnings growth rate of 3.62% for fiscal 2022. The Zacks Consensus Estimate for Progress Software’s fiscal 2022 earnings has been revised upward by 6 cents in the past 60 days. The long-term earnings growth rate of PRGS is pegged at 2%.
Progress Software’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 26.8%. Shares of PRGS have lost 4% in the past year.
Badger Meter has a projected earnings growth rate of 5.77% for 2022. The Zacks Consensus Estimate for Badger Meter’s 2022 earnings has been revised upward by 19 cents in the past 60 days.
Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and met estimates once, the average surprise being 14%. Shares of BMI have dropped 8% in the past year.
Iridium has a projected earnings growth rate of 271.43% for 2022. The Zacks Consensus Estimate for Iridium’s 2022 earnings has been revised upward by a penny in the past 90 days.
Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and met estimates twice, the average surprise being 39.4%. Shares of IRDM have dropped 2% in the past year.