We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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's Q3 revenues rose 26.9% YoY to $372.5M, beating estimates and company guidance.
Subscription and support revenues jumped 34.6%, helping lift ARR 19% to $1.147 billion.
GWRE raised FY26 revenue, operating income and cash flow outlook after strong Q3 results.
Guidewire Software, Inc. (GWRE - Free Report) reported non-GAAP earnings per share of 82 cents for third-quarter fiscal 2026 (ended April 30, 2026) compared with 55 cents in the same period last year. Earnings surpassed the Zacks Consensus Estimate of 79 cents.
The company reported revenues of $372.5 million, up 26.9% year over year. Revenues beat the Zacks Consensus Estimate by 4.6%. The figure also surpassed the company’s guided range of $352-$358 million. This uptick was driven by solid momentum in Subscription and support and Services segments.
Management highlighted that third-quarter results reinforced its confidence in the strength and sustained momentum of the business and positioned the company for what it expects to be a record fourth quarter. The company noted that its strategy and market position continue to resonate with insurers as they modernize core systems, migrate critical business functions to Guidewire’s cloud platform solutions, and increasingly adopt AI capabilities across its applications.
As of April 30, 2026, annual recurring revenue (ARR) was $1.147 billion, up 19% year over year.
However, shares of the company dropped around 14% in the after-market trading session yesterday. In the past year, the stock has lost 40.9% compared with the Internet Software industry’s decline of 12.1%.
Image Source: Zacks Investment Research
GWRE’s Q3 in Details
The subscription and support segment’s revenues (65.7% of total revenues) gained 34.6% from the year-ago quarter's level to $244.7 million.
License’s revenues (15%) were down 2.2% year over year to $56 million.
Services’ revenues (19.3%) jumped 31.9% year over year to $71.8 million.
Non-GAAP gross margin expanded to 66.4% from 65.5% on a year-over-year basis. The subscription and support segment’s gross margin increased to 74.1% from 70.6%, while the License segment’s gross margin was 99.3% compared with 98.5% in the year-ago quarter. Services’ non-GAAP gross margin was 14.3% compared with 12.9% a year ago.
Total operating expenses increased 15.6% year over year to $206 million. Non-GAAP operating income was $77.8 million compared with $46.1 million in the year-ago quarter.
Financial Details of GWRE
As of April 30, 2026, cash and cash equivalents and short-term investments were $1146.8 million compared with $919.2 million as of Jan. 31, 2026.
Driven by strong collections, GWRE generated $61.2 million in cash from operations in the quarter under discussion, while free cash flow was nearly $53.7 million.
GWRE’s Q4 Outlook
For the fourth quarter of fiscal 2026, Guidewire expects total revenues of $396 million to $406 million.
Subscription and support revenues are anticipated to be between $259 million and $265 million.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
The company projects ending ARR to be in the range of $1.229 billion to $1.237 billion.
Guidewire also projects GAAP operating income of $36 million to $46 million and non-GAAP operating income of $86 million to $96 million.
Guidewire Provides Guidance for FY26
GWRE still expects ARR for fiscal 2026 to be in the range of $1.229 billion to $1.237 billion, indicating an increase of 18%-19% year over year.
For fiscal 2026, Guidewire has raised its outlook for revenues, operating income and cash flow, reflecting stronger-than-expected third-quarter results and improved visibility into opportunities advancing through its sales pipeline.
Total revenues are projected in the range of $1.460 billion to $1.470 billion, up from the prior expectation of $1.438 billion to $1.448 billion. The company reported total revenues of $1.202 billion in fiscal 2025.
Subscription and support revenues are expected to be between $963 million and $969 million, up from the earlier projection of $962 million to $966 million.
The company forecasts GAAP operating income of $124 million to $134 million, up from the $100-$110 million anticipated earlier. It predicts non-GAAP operating income of $314 million to $324 million, up from the $293-$303 million projected earlier.
Operating cash flow is expected to be between $365 million and $380 million, higher than the previous expectation of $360 million to $375 million.
Recent Performance of Other Companies in the Same Space
Flex Ltd. (FLEX - Free Report) reported fourth-quarter fiscal 2026 adjusted EPS of 93 cents, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line compared favorably with 73 cents posted in the prior-year quarter.
Revenues increased 17% year over year to $7.5 billion. It beat the consensus mark by 8.1%. The growth was primarily driven by strong momentum across all three segments, with Cloud and Power Infrastructure emerging as the standout performers.
Fortive Corporation (FTV - Free Report) reported first-quarter 2026 adjusted EPS of 70 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 64 cents. The bottom line increased 25.4% year over year.
Revenues increased 7.7% year over year to $1069.4 million. The top line beat the Zacks Consensus Estimate by 3.8%. Core revenues jumped 5.3%.
Sensata Technologies Holding plc (ST - Free Report) reported first-quarter 2026 adjusted EPS of 86 cents, up from 78 cents a year ago. The bottom line beat the Zacks Consensus Estimate by 2.4%.
Revenues for the quarter reached $934.8 million, up 2.6% from a year ago. The figure came near to the upper end of management’s expectations ($917-$937 million) and beat the consensus estimate by 0.7%. Strength Aerospace, Defense and Commercial Equipment segments drove the top-line performance.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Guidewire Q3 Earnings & Revenues Beat Estimates, Increase Y/Y
Key Takeaways
Guidewire Software, Inc. (GWRE - Free Report) reported non-GAAP earnings per share of 82 cents for third-quarter fiscal 2026 (ended April 30, 2026) compared with 55 cents in the same period last year. Earnings surpassed the Zacks Consensus Estimate of 79 cents.
The company reported revenues of $372.5 million, up 26.9% year over year. Revenues beat the Zacks Consensus Estimate by 4.6%. The figure also surpassed the company’s guided range of $352-$358 million. This uptick was driven by solid momentum in Subscription and support and Services segments.
Management highlighted that third-quarter results reinforced its confidence in the strength and sustained momentum of the business and positioned the company for what it expects to be a record fourth quarter. The company noted that its strategy and market position continue to resonate with insurers as they modernize core systems, migrate critical business functions to Guidewire’s cloud platform solutions, and increasingly adopt AI capabilities across its applications.
As of April 30, 2026, annual recurring revenue (ARR) was $1.147 billion, up 19% year over year.
However, shares of the company dropped around 14% in the after-market trading session yesterday. In the past year, the stock has lost 40.9% compared with the Internet Software industry’s decline of 12.1%.
Image Source: Zacks Investment Research
GWRE’s Q3 in Details
The subscription and support segment’s revenues (65.7% of total revenues) gained 34.6% from the year-ago quarter's level to $244.7 million.
License’s revenues (15%) were down 2.2% year over year to $56 million.
Services’ revenues (19.3%) jumped 31.9% year over year to $71.8 million.
Non-GAAP gross margin expanded to 66.4% from 65.5% on a year-over-year basis. The subscription and support segment’s gross margin increased to 74.1% from 70.6%, while the License segment’s gross margin was 99.3% compared with 98.5% in the year-ago quarter. Services’ non-GAAP gross margin was 14.3% compared with 12.9% a year ago.
Total operating expenses increased 15.6% year over year to $206 million. Non-GAAP operating income was $77.8 million compared with $46.1 million in the year-ago quarter.
Financial Details of GWRE
As of April 30, 2026, cash and cash equivalents and short-term investments were $1146.8 million compared with $919.2 million as of Jan. 31, 2026.
Driven by strong collections, GWRE generated $61.2 million in cash from operations in the quarter under discussion, while free cash flow was nearly $53.7 million.
GWRE’s Q4 Outlook
For the fourth quarter of fiscal 2026, Guidewire expects total revenues of $396 million to $406 million.
Subscription and support revenues are anticipated to be between $259 million and $265 million.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. Quote
The company projects ending ARR to be in the range of $1.229 billion to $1.237 billion.
Guidewire also projects GAAP operating income of $36 million to $46 million and non-GAAP operating income of $86 million to $96 million.
Guidewire Provides Guidance for FY26
GWRE still expects ARR for fiscal 2026 to be in the range of $1.229 billion to $1.237 billion, indicating an increase of 18%-19% year over year.
For fiscal 2026, Guidewire has raised its outlook for revenues, operating income and cash flow, reflecting stronger-than-expected third-quarter results and improved visibility into opportunities advancing through its sales pipeline.
Total revenues are projected in the range of $1.460 billion to $1.470 billion, up from the prior expectation of $1.438 billion to $1.448 billion. The company reported total revenues of $1.202 billion in fiscal 2025.
Subscription and support revenues are expected to be between $963 million and $969 million, up from the earlier projection of $962 million to $966 million.
The company forecasts GAAP operating income of $124 million to $134 million, up from the $100-$110 million anticipated earlier. It predicts non-GAAP operating income of $314 million to $324 million, up from the $293-$303 million projected earlier.
Operating cash flow is expected to be between $365 million and $380 million, higher than the previous expectation of $360 million to $375 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 the Same Space
Flex Ltd. (FLEX - Free Report) reported fourth-quarter fiscal 2026 adjusted EPS of 93 cents, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line compared favorably with 73 cents posted in the prior-year quarter.
Revenues increased 17% year over year to $7.5 billion. It beat the consensus mark by 8.1%. The growth was primarily driven by strong momentum across all three segments, with Cloud and Power Infrastructure emerging as the standout performers.
Fortive Corporation (FTV - Free Report) reported first-quarter 2026 adjusted EPS of 70 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 64 cents. The bottom line increased 25.4% year over year.
Revenues increased 7.7% year over year to $1069.4 million. The top line beat the Zacks Consensus Estimate by 3.8%. Core revenues jumped 5.3%.
Sensata Technologies Holding plc (ST - Free Report) reported first-quarter 2026 adjusted EPS of 86 cents, up from 78 cents a year ago. The bottom line beat the Zacks Consensus Estimate by 2.4%.
Revenues for the quarter reached $934.8 million, up 2.6% from a year ago. The figure came near to the upper end of management’s expectations ($917-$937 million) and beat the consensus estimate by 0.7%. Strength Aerospace, Defense and Commercial Equipment segments drove the top-line performance.