We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Guidewire (GWRE) Q2 Loss Wider Than Expected, Revenues Up Y/Y
Read MoreHide Full Article
Guidewire Software (GWRE - Free Report) reported non-GAAP loss of 21 cents per share in second-quarter fiscal 2023 (ended Jan 31), wider than the Zacks Consensus Estimate of a loss of 4 cents and year-ago quarter’s non-GAAP loss of 6 cents.
The company reported revenues of $232.6 million, rising 14% year over year and beating the Zacks Consensus Estimate by 4.7%.
Guidewire Cloud continued to gain momentum in the reported quarter among new and existing clients.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Subscription and support segments’ revenues (45.5% of total revenues) soared 25% from the year-ago quarter’s levels to $105.8 million, owing to higher subscription revenues. Subscription’s revenues surged 36.8% year over year to $86 million. Support’s revenues declined 7.9% year over year to $19.7 million.
License’s revenues (31.4% of total revenues) were up 5% year over year to $73.1 million.
Services’ revenues (23.1% of total revenues) climbed 6% year over year to $53.7 million, driven by increased cloud implementation programs.
Annual recurring revenues (ARR) were $707 million as of Jan 31, up 14% (up 17% on constant-currency basis) year over year.
Non-GAAP gross margin expanded 140 basis points (bps) on a year-over-year basis to 56.7%.
Subscription and support segments’ gross margin expanded 850 bps on a year-over-year basis to 57.5%, due to increased cloud infrastructure efficiency. Services’ non-GAAP gross margin was negative 0.4% compared with a gross margin of 8.3% in the year-ago reported quarter.
Total operating expenses increased 3.6% year over year to $146.7 million. Non-GAAP operating loss was $23.2 million compared with $39.5 million reported in the year-ago quarter.
Financial Details
As of Jan 31, cash and cash equivalents and short-term investments came in at $714.7 million compared with $0.9 billion as of Oct 31, 2022.
Guidewire generated $1.2 million in cash from operations during the fiscal second quarter, with a free cash outflow of nearly $2.5 million.
Guidance
For third-quarter fiscal 2023, revenues are expected in the range of $211-$216 million. ARR is expected to be between $715 million and $720 million. GAAP operating loss is expected to be between $59 million and $64 million. Non-GAAP operating loss is expected to be between $16 million and $20 million.
For fiscal 2023, the company expects total revenues to be between $894 million and $904 million. ARR is expected in the range of $745-$760 million.
Non-GAAP operating loss for fiscal 2023 is projected in the range of $7-$17 million. Cash flow from operations is anticipated to be between $50 million and $80 million.
Zacks Rank & Stocks to Consider
At present, Guidewire carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.79 per share, rising 11.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 18.4% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 66.4% in the past year.
The Zacks Consensus Estimate for Pegasystem’s 2023 earnings is pegged at $1.31 per share, rising 96% in the past 60 days.
Pegasystem’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of PEGA have declined 41.1% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Guidewire (GWRE) Q2 Loss Wider Than Expected, Revenues Up Y/Y
Guidewire Software (GWRE - Free Report) reported non-GAAP loss of 21 cents per share in second-quarter fiscal 2023 (ended Jan 31), wider than the Zacks Consensus Estimate of a loss of 4 cents and year-ago quarter’s non-GAAP loss of 6 cents.
The company reported revenues of $232.6 million, rising 14% year over year and beating the Zacks Consensus Estimate by 4.7%.
Guidewire Cloud continued to gain momentum in the reported quarter among new and existing clients.
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 segments’ revenues (45.5% of total revenues) soared 25% from the year-ago quarter’s levels to $105.8 million, owing to higher subscription revenues. Subscription’s revenues surged 36.8% year over year to $86 million. Support’s revenues declined 7.9% year over year to $19.7 million.
License’s revenues (31.4% of total revenues) were up 5% year over year to $73.1 million.
Services’ revenues (23.1% of total revenues) climbed 6% year over year to $53.7 million, driven by increased cloud implementation programs.
Annual recurring revenues (ARR) were $707 million as of Jan 31, up 14% (up 17% on constant-currency basis) year over year.
Non-GAAP gross margin expanded 140 basis points (bps) on a year-over-year basis to 56.7%.
Subscription and support segments’ gross margin expanded 850 bps on a year-over-year basis to 57.5%, due to increased cloud infrastructure efficiency. Services’ non-GAAP gross margin was negative 0.4% compared with a gross margin of 8.3% in the year-ago reported quarter.
Total operating expenses increased 3.6% year over year to $146.7 million. Non-GAAP operating loss was $23.2 million compared with $39.5 million reported in the year-ago quarter.
Financial Details
As of Jan 31, cash and cash equivalents and short-term investments came in at $714.7 million compared with $0.9 billion as of Oct 31, 2022.
Guidewire generated $1.2 million in cash from operations during the fiscal second quarter, with a free cash outflow of nearly $2.5 million.
Guidance
For third-quarter fiscal 2023, revenues are expected in the range of $211-$216 million. ARR is expected to be between $715 million and $720 million. GAAP operating loss is expected to be between $59 million and $64 million. Non-GAAP operating loss is expected to be between $16 million and $20 million.
For fiscal 2023, the company expects total revenues to be between $894 million and $904 million. ARR is expected in the range of $745-$760 million.
Non-GAAP operating loss for fiscal 2023 is projected in the range of $7-$17 million. Cash flow from operations is anticipated to be between $50 million and $80 million.
Zacks Rank & Stocks to Consider
At present, Guidewire carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Perion Network (PERI - Free Report) and Pegasystems (PEGA - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.79 per share, rising 11.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 18.4% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 66.4% in the past year.
The Zacks Consensus Estimate for Pegasystem’s 2023 earnings is pegged at $1.31 per share, rising 96% in the past 60 days.
Pegasystem’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of PEGA have declined 41.1% in the past year.