Guidewire Q4 Earnings & Revenues Surpass Estimates, Stock Surges

Guidewire Software, Inc GWRE reported non-GAAP earnings per share of 84 cents in fourth-quarter fiscal 2025 (ended July 31, 2025), up 35.5% year over year and beat the Zacks Consensus Estimate of 62 cents. 

The company reported revenues of $356.6 million, up 22% year over year. Revenues beat the Zacks Consensus Estimate by 5.8%. The figure also surpassed the company’s guided range of $332-$340 million. This uptick was driven by solid sales activity across various geographies, expansions and net new deals.

Guidewire Cloud continued to gain momentum in the reported quarter with 19 deal wins, bringing the fiscal year count to 57. It closed nine deals with Tier 1 insurers. 

The 10-year Liberty Mutual deal was highlighted by the management as a milestone moment. Endorsement of the GWRE platform by Liberty Mutual, which is a key Tier 1 insurer, provides validation of platform maturity, scalability and referenceability. Liberty is transitioning its on-premises ClaimCenter instance to the cloud. It has also made a decade long commitment to adopt PolicyCenter on Guidewire Cloud platform.

Guidewire Software, Inc. Price, Consensus and EPS Surprise

Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. Quote

As of July 31, annual recurring revenues (“ARR”) were $1.032 billion, up 19% year over year. GWRE expects ARR for fiscal 2026 to be in the range of $1.21 billion to $1.22 billion.

Driven by strong revenue performance, GWRE expects total revenues for fiscal 2026 to be between $1.385 billion and $1.405 billion compared with $1.202 billion in fiscal 2025. Subscription revenues are now forecasted to be $888 million, while subscription and support revenues are expected to be $945 million. Services revenues are expected to increase modestly to $232 million. 

Non-GAAP operating income is forecasted to be between $259 million and $279 million. Cash flow from operations is now anticipated to be in the range of $350-$370 million.

Following the results, shares are up 15.2% in the pre-market trading session today. In the past year, shares of the company have gained 34.2% compared with the Internet Software industry’s growth of 46.1%.

GWRE’s Fiscal Q4 in Details

The subscription and support segment’s revenues (56.6% of total revenues) soared 33% from the year-ago quarter's level to $201.9 million.

License’s revenues (26.3%) were up 5% year over year to $93.6 million. 

Services’ revenues (17.1%) jumped 20% year over year to $61 million.

Non-GAAP gross margin expanded to 67.7% from 67% on a year-over-year basis. The subscription and support segment’s gross margin increased to 70.2% from 66% on a year-over-year basis, attributed to strong revenues and increases in cloud infrastructure platform efficiency. Services’ non-GAAP gross margin was 12% compared with 14.2% in the year-ago quarter. 

Total operating expenses increased 14.8% year over year to $202.2 million. Non-GAAP operating income was $73.5 million compared with $49 million in the year-ago quarter.

Financial Details of GWRE

As of July 31, cash and cash equivalents and short-term investments were $1,483.2 million compared with $1,243.7 million as of April 30, 2025.

Driven by strong collections, GWRE generated $244.8 million in cash from operations in the quarter under discussion, while free cash flow was nearly $237.7 million.

GWRE’s Fiscal Q1 Outlook

For the first quarter of fiscal 2026, revenues are expected in the range of $315-$321 million. Non-GAAP operating income is estimated in the band of $47-$53 million.

GWRE’s Zacks Rank

Guidewire currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Recent Performance of Other Companies in the Same Space

CoreWeave CRWV reported a second-quarter 2025 loss per share of 60 cents compared with a loss of $1.62 in the year-ago quarter. Revenues in the quarter were a record $1212.8 million, which beat the Zacks Consensus Estimate by 12.5%. Total revenues jumped 207% year over year. The top-line performance was driven by increasing demand for the AI-cloud platform.

In the second quarter, CoreWeave recorded a series of major achievements — securing high-profile customer wins across AI labs, hyperscalers and enterprises. Highlights included a $4 billion expansion with OpenAI, adding to the previously announced $11.9 billion deal and onboarding a new hyperscaler customer that expanded within the quarter.

Arista Networks ANET reported strong second-quarter 2025 results, with revenues and adjusted earnings soaring year over year, driven by robust demand trends. Innovative product launches and steady customer additions backed by the company’s best-in-class portfolio strength led to top-line expansion, while steady margin improvement contributed to earnings growth.

On a non-GAAP basis, net income was $923.5 million or 73 cents per share compared with $672.6 million or 53 cents in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate by 8 cents. Revenues surged to $2.2 billion from $1.69 billion in the prior-year quarter, driven by strength across the product portfolio.

Atlassian Corporation TEAM reported fourth-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Its non-GAAP earnings per share of 98 cents beat the Zacks Consensus Estimate by 18.1%. The figure jumped 48.5% from the year-ago quarter’s non-GAAP earnings of 66 cents per share.

TEAM’s fiscal fourth-quarter revenues climbed 22% year over year to $1.38 billion and beat the Zacks Consensus Estimate by 2.3%. The top line was primarily driven by robust paid growth in Atlassian Government Cloud and Isolated Cloud, and momentum in AI adoption.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research