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    Guidewire Software (GWRE)

    Q2 2024 Earnings Summary

    Reported on Feb 18, 2025 (After Market Close)
    Pre-Earnings Price$116.93Last close (Mar 7, 2024)
    Post-Earnings Price$118.00Open (Mar 8, 2024)
    Price Change
    $1.07(+0.92%)
    • Strong Cloud Adoption and Customer Demand: Guidewire is experiencing strong demand for its cloud platform, with a record of 11 cloud deals in the quarter, including 3 net new customers and 3 migrations, and is confident in their pipeline and win rates for future growth.
    • Increased ARR Guidance and Confidence in $1 Billion ARR Target: Guidewire has increased its ARR guidance to between $852 million and $862 million, and remains confident in achieving the $1 billion ARR target by fiscal 2025, supported by strong visibility into their pipeline and backlog from previous deals.
    • Improved Cloud Gross Margins and Operating Cash Flow: Guidewire is seeing improved cloud gross margins, with subscription and support gross margin increasing to 65%, an 8-point improvement year-over-year, leading to better-than-expected operating income and higher cash flow from operations, allowing them to raise their cash flow outlook for the fiscal year to between $120 million and $140 million.
    • Services revenue was lower than expected as partners took the lead in more cloud programs, leading to a $20 million downward adjustment to services revenue expectations and a $19 million downward adjustment in total revenue guidance at the midpoint. This could impact total revenue growth.
    • The transition to SI partner-led implementations may pressure services gross margins in the short term. The company now expects services gross margins to be between 5% and 8%, down from previous expectations, which may affect profitability.
    • Macroeconomic factors, such as inflation and higher claims expenses, could potentially impact customers' IT investment decisions in the future, which might slow down demand for Guidewire's products.

    Research analysts covering Guidewire Software.