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Guidewire Software Gross Margin %

: 46.43% (As of Oct. 2020)
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Gross Margin % is calculated as gross profit divided by its revenue. Guidewire Software's Gross Profit for the three months ended in Oct. 2020 was $78.8 Mil. Guidewire Software's Revenue for the three months ended in Oct. 2020 was $169.8 Mil. Therefore, Guidewire Software's Gross Margin % for the quarter that ended in Oct. 2020 was 46.43%.

Warning Sign:

Guidewire Software Inc gross margin has been in long term decline. The average rate of decline per year is -3.4%.


NYSE:GWRE' s Gross Margin % Range Over the Past 10 Years
Min: 53.9   Med: 59.29   Max: 64.23
Current: 53.9

53.9
64.23

During the past 12 years, the highest Gross Margin % of Guidewire Software was 64.23%. The lowest was 53.90%. And the median was 59.29%.

NYSE:GWRE's Gross Margin % is ranked higher than
59% of the 2100 Companies
in the Software industry.

( Industry Median: 46.05 vs. NYSE:GWRE: 53.90 )

Guidewire Software had a gross margin of 46.43% for the quarter that ended in Oct. 2020 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Guidewire Software was -3.40% per year.


Guidewire Software Gross Margin % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Guidewire Software Annual Data
Jul11 Jul12 Jul13 Jul14 Jul15 Jul16 Jul17 Jul18 Jul19 Jul20
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 64.23 62.40 54.54 54.92 54.46

Guidewire Software Quarterly Data
Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 48.50 51.81 49.01 63.96 46.43

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Guidewire Software Gross Margin % Distribution

* The bar in red indicates where Guidewire Software's Gross Margin % falls into.



Guidewire Software Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Guidewire Software's Gross Margin for the fiscal year that ended in Jul. 2020 is calculated as

Gross Margin % (A: Jul. 2020 )=Gross Profit (A: Jul. 2020 ) / Revenue (A: Jul. 2020 )
=404.3 / 742.307
=(Revenue - Cost of Goods Sold) / Revenue
=(742.307 - 338.015) / 742.307
=54.46 %

Guidewire Software's Gross Margin for the quarter that ended in Oct. 2020 is calculated as


Gross Margin % (Q: Oct. 2020 )=Gross Profit (Q: Oct. 2020 ) / Revenue (Q: Oct. 2020 )
=78.8 / 169.802
=(Revenue - Cost of Goods Sold) / Revenue
=(169.802 - 90.967) / 169.802
=46.43 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Guidewire Software  (NYSE:GWRE) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Guidewire Software had a gross margin of 46.43% for the quarter that ended in Oct. 2020 => Durable competitive advantage


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


Guidewire Software Gross Margin % Related Terms


Guidewire Software Gross Margin % Headlines

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