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Guidewire's Q1 Earnings and Revenues Top Estimates, Increase Y/Y
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Guidewire Software, Inc (GWRE - Free Report) reported non-GAAP earnings per share of 43 cents for first-quarter fiscal 2025 (ended Oct. 31, 2024). The figure surpassed the Zacks Consensus Estimate by 43.3%. GWRE had reported break-even earnings in the prior-year period.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company reported revenues of $262.9 million, up 27% year over year. Revenues surpassed the Zacks Consensus Estimate by 3.4%. The figure also came ahead of the company’s guided range of $251-$257 million. This uptick was driven by solid deal volume, especially in Tier 1, and increasing international momentum, especially in Asia Pacific and Europe.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Guidewire Cloud continued to gain momentum in the reported quarter with nine deal wins. Out of these deals, seven were for InsuranceSuite Cloud and five of these deals were with Tier 1 insurers.
As of Oct. 31, annual recurring revenues (ARR) were $874 million, up 13.5% year over year. GWRE continues to expect ARR for fiscal 2025 to be in the range of $995-$1,005 million.
Driven by strong revenue performance in the fiscal first quarter, GWRE expects total revenues for fiscal 2025 to be between $1.155 billion and $1.167 billion compared with earlier guidance of $1.135 billion and $1.149 billion. Subscription revenues are forecasted to be $648 million, while subscription and support revenues are expected to be $713 million. Services revenues are expected to be approximately $205 million.
Non-GAAP operating income is estimated to be between $164 million and $176 million compared with $157-$171 million expected previously. Cash flow from operations is anticipated to be in the range of $220-$250 million.
Image Source: Zacks Investment Research
Following the results, shares are down 3.6% in pre-market trading session today. In the past year, shares of the company have gained 101.3% compared with the sub-industry’s growth of 36.6%.
GWRE’s Fiscal Q1 in Details
The subscription and support segment’s revenues (64.6% of total revenues) soared 33% from the year-ago quarter's level to $169.7 million.
License’s revenues (14.2%) were up 10% year over year to $37.4 million.
Services’ revenues (21.2%) jumped 22% year over year to $55.8 million.
Non-GAAP gross margin expanded to 63.5% from 58.4% on a year-over-year basis. The subscription and support segment’s gross margin increased to 70.3% from 65.4% on a year-over-year basis, attributed to higher-than-expected revenues and increases in cloud infrastructure platform efficiency. Services’ non-GAAP gross margin was 19.7% compared with 10.3% in the year-ago quarter, due to solid utilization rates and reduced subcontractor costs.
Total operating expenses increased 11.7% year over year to $163.1 million. Non-GAAP operating income was $34.7 million compared with $4.1 million in the year-ago quarter.
Financial Details of GWRE
As of Oct. 31, 2024, cash and cash equivalents and short-term investments were $1,480.4 million compared with $1,129.5 million as of July 31.
GWRE used $62.3 million in cash from operations in the quarter under review due to annual employee bonuses and commission expenses. Free cash outflow was nearly $67.4 million.
GWRE’s Fiscal Q2 Outlook
For the second quarter of fiscal 2025, revenues are expected in the range of $282-$288 million. ARR is anticipated between $909 million and $914 million. Non-GAAP operating income is estimated in the range of $39-$45 million.
Recent Performance of Other Companies in Tech Space
Cognizant Technology Solutions (CTSH - Free Report) reported non-GAAP earnings of $1.25 per share in third-quarter 2024, which beat the Zacks Consensus Estimate by 9.65% and increased 7.8% year over year. Revenues of $5 billion beat the consensus mark by 0.82%. The top line increased 3% year over year and 2.7% at constant currency. Acquisitions contributed 150 basis points to top-line growth.
MSCI’s (MSCI - Free Report) third-quarter 2024 adjusted earnings of $3.86 per share beat the Zacks Consensus Estimate by 2.39% and increased 11.9% year over year. Revenues increased 15.9% year over year to $724.7 million, beating the consensus mark by 1.54%. Organic revenues rose 11.1% year over year.
Tyler Technologies, Inc. (TYL - Free Report) reported third-quarter 2024 non-GAAP earnings of $2.52 per share, which beat the Zacks Consensus Estimate of $2.44. The bottom line was higher than the year-ago quarter’s $2.14. Non-GAAP revenues increased 9.8% year over year to $543.3 million. However, the top line missed the Zacks Consensus Estimate of $546.4 million. The year-over-year improvement in the top line was primarily due to a rise in subscription revenues.
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Guidewire's Q1 Earnings and Revenues Top Estimates, Increase Y/Y
Guidewire Software, Inc (GWRE - Free Report) reported non-GAAP earnings per share of 43 cents for first-quarter fiscal 2025 (ended Oct. 31, 2024). The figure surpassed the Zacks Consensus Estimate by 43.3%. GWRE had reported break-even earnings in the prior-year period.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company reported revenues of $262.9 million, up 27% year over year. Revenues surpassed the Zacks Consensus Estimate by 3.4%. The figure also came ahead of the company’s guided range of $251-$257 million. This uptick was driven by solid deal volume, especially in Tier 1, and increasing international momentum, especially in Asia Pacific and Europe.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. Quote
Guidewire Cloud continued to gain momentum in the reported quarter with nine deal wins. Out of these deals, seven were for InsuranceSuite Cloud and five of these deals were with Tier 1 insurers.
As of Oct. 31, annual recurring revenues (ARR) were $874 million, up 13.5% year over year. GWRE continues to expect ARR for fiscal 2025 to be in the range of $995-$1,005 million.
Driven by strong revenue performance in the fiscal first quarter, GWRE expects total revenues for fiscal 2025 to be between $1.155 billion and $1.167 billion compared with earlier guidance of $1.135 billion and $1.149 billion. Subscription revenues are forecasted to be $648 million, while subscription and support revenues are expected to be $713 million. Services revenues are expected to be approximately $205 million.
Non-GAAP operating income is estimated to be between $164 million and $176 million compared with $157-$171 million expected previously. Cash flow from operations is anticipated to be in the range of $220-$250 million.
Image Source: Zacks Investment Research
Following the results, shares are down 3.6% in pre-market trading session today. In the past year, shares of the company have gained 101.3% compared with the sub-industry’s growth of 36.6%.
GWRE’s Fiscal Q1 in Details
The subscription and support segment’s revenues (64.6% of total revenues) soared 33% from the year-ago quarter's level to $169.7 million.
License’s revenues (14.2%) were up 10% year over year to $37.4 million.
Services’ revenues (21.2%) jumped 22% year over year to $55.8 million.
Non-GAAP gross margin expanded to 63.5% from 58.4% on a year-over-year basis. The subscription and support segment’s gross margin increased to 70.3% from 65.4% on a year-over-year basis, attributed to higher-than-expected revenues and increases in cloud infrastructure platform efficiency. Services’ non-GAAP gross margin was 19.7% compared with 10.3% in the year-ago quarter, due to solid utilization rates and reduced subcontractor costs.
Total operating expenses increased 11.7% year over year to $163.1 million. Non-GAAP operating income was $34.7 million compared with $4.1 million in the year-ago quarter.
Financial Details of GWRE
As of Oct. 31, 2024, cash and cash equivalents and short-term investments were $1,480.4 million compared with $1,129.5 million as of July 31.
GWRE used $62.3 million in cash from operations in the quarter under review due to annual employee bonuses and commission expenses. Free cash outflow was nearly $67.4 million.
GWRE’s Fiscal Q2 Outlook
For the second quarter of fiscal 2025, revenues are expected in the range of $282-$288 million. ARR is anticipated between $909 million and $914 million. Non-GAAP operating income is estimated in the range of $39-$45 million.
GWRE’s Zacks Rank
Guidewire currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in Tech Space
Cognizant Technology Solutions (CTSH - Free Report) reported non-GAAP earnings of $1.25 per share in third-quarter 2024, which beat the Zacks Consensus Estimate by 9.65% and increased 7.8% year over year. Revenues of $5 billion beat the consensus mark by 0.82%. The top line increased 3% year over year and 2.7% at constant currency. Acquisitions contributed 150 basis points to top-line growth.
MSCI’s (MSCI - Free Report) third-quarter 2024 adjusted earnings of $3.86 per share beat the Zacks Consensus Estimate by 2.39% and increased 11.9% year over year. Revenues increased 15.9% year over year to $724.7 million, beating the consensus mark by 1.54%. Organic revenues rose 11.1% year over year.
Tyler Technologies, Inc. (TYL - Free Report) reported third-quarter 2024 non-GAAP earnings of $2.52 per share, which beat the Zacks Consensus Estimate of $2.44. The bottom line was higher than the year-ago quarter’s $2.14. Non-GAAP revenues increased 9.8% year over year to $543.3 million. However, the top line missed the Zacks Consensus Estimate of $546.4 million. The year-over-year improvement in the top line was primarily due to a rise in subscription revenues.