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Guidewire's (GWRE) Q2 Earnings Beat Estimates, Revenues Up Y/Y
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Guidewire Software (GWRE - Free Report) reported non-GAAP earnings per share (EPS) of 46 cents in second-quarter fiscal 2024 (ended Jan 31, 2023), which surpassed the Zacks Consensus Estimate of 21 cents. The company reported a non-GAAP loss of 12 cents in the year-ago quarter.
The company reported revenues of $240.9 million, rising 4% year over year. The revenue was in line with the Zacks Consensus Estimate.
Guidewire Cloud continued to gain momentum in the reported quarter with 11 deal wins.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Subscription and support segment’s revenues (54.7% of total revenues) soared 24.5% from the year-ago quarter to $131.6 million.
License’s revenues (29.5%) were down 2.8% year over year to $71.1 million.
Services’ revenues (15.8%) fell 28.9% year over year to $38.1 million.
As of Jan 31, annual recurring revenues (ARR) were $800 million, up 4.8% year over year.
Non-GAAP gross margin expanded to 62.7% from 56.7% on a year-over-year basis.
Subscription and support segment’s gross margin increased to 65.1% from 57.4% on a year-over-year basis due to increased cloud infrastructure efficiency. Services’ non-GAAP gross margin was (11.2)% against a gross margin of (0.4)% in the year-ago reported quarter.
Total operating expenses increased 5.6% year over year to $154.8 million. Non-GAAP operating income was $25.6 compared with $15.1 million reported in the year-ago quarter.
Financial Details
As of Jan 31, 2024, cash and cash equivalents and short-term investments were $777.6 million compared with $712.9 million as of Oct 31, 2023.
Guidewire generated $69.2 million in cash from operations during the quarter under review, with a free cash flow of nearly $63.8 million.
Outlook
For the third quarter of fiscal 2024, revenues are expected to be in the range of $228-$234 million. ARR is projected to be between $815 million and $820 million. Non-GAAP operating income is estimated to be between $4 million and $10 million.
For fiscal 2024, the company expects total revenues between $957 million and $967 million compared with the previous guidance of $976 million-$986 million. ARR is projected to be in the range of $852-$862 million.
Non-GAAP operating income (loss) is estimated to be between $82 million and $92 million.
Cash flow from operations is now anticipated to be in the range of $120-$140 million compared with the previous guidance of $115-$135 million.
Zacks Rank & Stocks to Consider
Guidewire currently carries a Zacks Rank #3 (Hold)
The Zacks Consensus Estimate for Synopsys’ 2024 EPS has improved 1.1% in the past 60 days to $13.56. SNPS’ long-term earnings growth rate is 17.5%.
Synopsys’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have risen 56.1% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.27. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have risen 50.5% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies’ fiscal 2024 EPS has improved 2.5% in the past 60 days to $8.54. WTS’ long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.5%. Shares of WTS have risen 16.5% in the past year.
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Guidewire's (GWRE) Q2 Earnings Beat Estimates, Revenues Up Y/Y
Guidewire Software (GWRE - Free Report) reported non-GAAP earnings per share (EPS) of 46 cents in second-quarter fiscal 2024 (ended Jan 31, 2023), which surpassed the Zacks Consensus Estimate of 21 cents. The company reported a non-GAAP loss of 12 cents in the year-ago quarter.
The company reported revenues of $240.9 million, rising 4% year over year. The revenue was in line with the Zacks Consensus Estimate.
Guidewire Cloud continued to gain momentum in the reported quarter with 11 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 (54.7% of total revenues) soared 24.5% from the year-ago quarter to $131.6 million.
License’s revenues (29.5%) were down 2.8% year over year to $71.1 million.
Services’ revenues (15.8%) fell 28.9% year over year to $38.1 million.
As of Jan 31, annual recurring revenues (ARR) were $800 million, up 4.8% year over year.
Non-GAAP gross margin expanded to 62.7% from 56.7% on a year-over-year basis.
Subscription and support segment’s gross margin increased to 65.1% from 57.4% on a year-over-year basis due to increased cloud infrastructure efficiency. Services’ non-GAAP gross margin was (11.2)% against a gross margin of (0.4)% in the year-ago reported quarter.
Total operating expenses increased 5.6% year over year to $154.8 million. Non-GAAP operating income was $25.6 compared with $15.1 million reported in the year-ago quarter.
Financial Details
As of Jan 31, 2024, cash and cash equivalents and short-term investments were $777.6 million compared with $712.9 million as of Oct 31, 2023.
Guidewire generated $69.2 million in cash from operations during the quarter under review, with a free cash flow of nearly $63.8 million.
Outlook
For the third quarter of fiscal 2024, revenues are expected to be in the range of $228-$234 million. ARR is projected to be between $815 million and $820 million. Non-GAAP operating income is estimated to be between $4 million and $10 million.
For fiscal 2024, the company expects total revenues between $957 million and $967 million compared with the previous guidance of $976 million-$986 million. ARR is projected to be in the range of $852-$862 million.
Non-GAAP operating income (loss) is estimated to be between $82 million and $92 million.
Cash flow from operations is now anticipated to be in the range of $120-$140 million compared with the previous guidance of $115-$135 million.
Zacks Rank & Stocks to Consider
Guidewire currently carries a Zacks Rank #3 (Hold)
Some better-ranked stocks from the broader technology space are Synopsys (SNPS - Free Report) , Woodward (WWD - Free Report) and Watts Water Technologies (WTS - Free Report) . Synopsys sports a Zacks Rank #1 (Strong Buy), while Watts Water Technologies and Woodward carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Synopsys’ 2024 EPS has improved 1.1% in the past 60 days to $13.56. SNPS’ long-term earnings growth rate is 17.5%.
Synopsys’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have risen 56.1% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.27. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have risen 50.5% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies’ fiscal 2024 EPS has improved 2.5% in the past 60 days to $8.54. WTS’ long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.5%. Shares of WTS have risen 16.5% in the past year.