Guidewire Software (GWRE, Financial) anticipates its Annual Recurring Revenue (ARR) for the fourth quarter to range between $1.012 billion and $1.022 billion. This forecast reflects the company's ongoing efforts to enhance its financial performance and secure a stable revenue stream. The ARR projection indicates Guidewire's strategic focus on sustaining growth and providing value to its stakeholders.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Guidewire Software Inc (GWRE, Financial) is $213.32 with a high estimate of $250.00 and a low estimate of $135.00. The average target implies an downside of 2.23% from the current price of $218.18. More detailed estimate data can be found on the Guidewire Software Inc (GWRE) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Guidewire Software Inc's (GWRE, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Guidewire Software Inc (GWRE, Financial) in one year is $138.88, suggesting a downside of 36.35% from the current price of $218.18. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Guidewire Software Inc (GWRE) Summary page.
GWRE Key Business Developments
Release Date: March 06, 2025
- ARR (Annual Recurring Revenue): Finished at $918 million, with a net new ARR addition of $45 million.
- Total Revenue: $289 million, up 20% year over year.
- Subscription and Support Revenue: $178 million, reflecting 35% year-over-year growth.
- Services Revenue: $48 million, in line with expectations.
- Gross Profit: $189 million, representing 25% year-over-year growth.
- Overall Gross Margin: 65%.
- Subscription and Support Gross Margin: 69%, compared to 65% a year ago.
- Services Gross Margin: 6%, compared to negative 11% a year ago.
- Operating Profit: $54 million, ahead of outlook.
- Cash, Cash Equivalents, and Investments: $1.4 billion.
- Operating Cash Flow: $86 million, ahead of expectations.
- Convertible Notes: Retired an additional $100 million at face value, with a $53 million charge to other income on a GAAP basis.
- Fiscal Year 2025 ARR Outlook: Raised to $1 billion to $1.01 billion, reflecting 16% to 17% growth year over year.
- Fiscal Year 2025 Total Revenue Outlook: Between $1.164 billion and $1.174 billion.
- Fiscal Year 2025 Subscription Revenue Outlook: Approximately $653 million.
- Fiscal Year 2025 Subscription and Support Revenue Outlook: $718 million.
- Fiscal Year 2025 Services Revenue Outlook: Approximately $210 million.
- Fiscal Year 2025 Non-GAAP Operating Income Outlook: Between $175 million and $185 million.
- Fiscal Year 2025 Cash Flow from Operations Outlook: Between $230 million and $260 million.
- Q3 ARR Outlook: Between $942 million and $947 million.
- Q3 Total Revenue Outlook: Between $283 million and $289 million.
- Q3 Subscription and Support Revenue Outlook: Approximately $178 million.
- Q3 Services Revenue Outlook: Approximately $52 million.
- Q3 Non-GAAP Operating Income Outlook: Between $36 million and $42 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Guidewire Software Inc (GWRE, Financial) reported strong sales activity with ARR finishing above the high end of their projected range.
- The company closed 12 cloud deals, including four full InsuranceSuite deals, indicating strong demand for their cloud offerings.
- Guidewire Software Inc (GWRE) welcomed five new customers in Q2, including international expansions in Brazil and Belgium.
- The company reported a 20% year-over-year increase in total revenue, with subscription and support revenue growing by 35%.
- Guidewire Software Inc (GWRE) has a growing cloud ecosystem with over 26,000 practitioners and more than 10,500 cloud-certified professionals, enhancing their market presence and support capabilities.
Negative Points
- The company faces challenges in migrating their on-prem customer base to the cloud, which is a multiyear process.
- There is uncertainty regarding the impact of geopolitical events and natural disasters on Guidewire Software Inc (GWRE)'s business.
- The company experienced a $53 million charge related to the retirement of convertible notes, impacting their financials.
- Guidewire Software Inc (GWRE) has been slower than expected in hiring for product development teams, which could affect future growth.
- The company anticipates a $9 million negative adjustment to ARR due to foreign currency exchange rate fluctuations.
