Guidewire Announces Second Quarter Fiscal Year 2024 Financial Results
- Guidewire's second-quarter revenue for fiscal year 2024 was $240.9 million, showing a 4% increase from the same quarter in fiscal year 2023.
- Subscription and support revenue rose to $131.6 million, a 24% increase, while services revenue decreased by 29% to $38.2 million compared to the same quarter last year.
- License revenue also decreased by 3% to $71.1 million.
- Annual recurring revenue (ARR) stood at $800 million as of January 31, 2024, compared to $763 million in July 2023.
- Guidewire reported a GAAP loss from operations of $12.4 million for the second quarter of fiscal year 2024, an improvement from the $23.2 million loss in the same quarter of fiscal year 2023.
- Non-GAAP net income for the second quarter of fiscal year 2024 was $39.1 million, a significant increase from the $17.4 million net loss in the same quarter of fiscal year 2023.
- Guidewire had $932.7 million in cash, cash equivalents, and investments as of January 31, 2024.
- The company's business outlook for the third quarter of fiscal year 2024 includes an ARR range of $815 million to $820 million and total revenue between $228 million and $234 million.
- For fiscal year 2024, Guidewire updated its outlook with an ARR range of $852 million to $862 million and total revenue between $957 million and $967 million.
- Services revenue saw a decrease of 29% in the second quarter of fiscal year 2024.
- Operating loss is expected to be between $(34) million and $(28) million for the third quarter of fiscal year 2024.
- Guidewire's outlook for fiscal year 2024 includes an operating loss range of $(71) million to $(61) million.
- The company used $2.8 million in cash from operations during the six months ended January 31, 2024.
Insights
The reported financial results of Guidewire showcase a mixed performance, with a 4% increase in total revenue and a significant 24% increase in subscription and support revenue. This indicates a strategic shift towards a recurring revenue model, which is a positive sign for long-term financial stability. However, the 29% decrease in services revenue raises questions about the scalability of their services segment and the impact of their strategy to rely on Systems Integrator (SI) partners for cloud engagements.
The announcement of an increase in annual recurring revenue (ARR) to $800 million represents a healthy growth trajectory and is a key metric for investors as it provides a more predictable revenue stream. The non-GAAP profitability metrics, such as the increase in non-GAAP income from operations and non-GAAP net income, are also encouraging as they suggest improved operational efficiency. However, the reported GAAP losses indicate that there are still costs that need to be managed, such as stock-based compensation and amortization of intangibles.
The liquidity position, with over $930 million in cash and equivalents, appears robust and provides the company with strategic flexibility. The operating cash flow guidance for fiscal year 2024 is also a strong indicator of the company's ability to generate cash from its core operations.
Guidewire's performance in the cloud sector is noteworthy, with eleven cloud deals including migrations, expansions and new customers. This reflects a growing market demand for cloud-based solutions within the insurance industry software market. The company's focus on the Guidewire Cloud Platform aligns with broader industry trends towards digital transformation and cloud adoption.
The 65% non-GAAP subscription and support gross margins are an important indicator of the profitability of Guidewire's subscription model. High gross margins in this segment can be attributed to lower variable costs associated with delivering cloud services compared to traditional software. This margin performance will likely be closely watched by investors as an indicator of the company's ability to maintain profitability while scaling its cloud offerings.
The financial results must be contextualized within the broader economic environment. Given the current economic conditions, Guidewire's ability to increase its ARR and sustain high gross margins is indicative of strong demand for its services, despite a potential slowdown in IT spending. The operating expense discipline mentioned by the CFO suggests a strategic approach to cost management that could help buffer against economic uncertainties.
However, the decrease in services revenue may signal a shift in the company's business model or a reallocation of market resources that could affect labor dynamics within the company and its partners. The impact of currency rates is also a factor to consider, as ARR results are based on constant currency rates, which may not reflect actual market conditions and could influence investor perceptions of the company's performance.
“Our strong performance in the second quarter was marked by eleven cloud deals, including a healthy mix of migrations, expansions, and net-new customers,” said Mike Rosenbaum, chief executive officer, Guidewire. “The enthusiasm and interest we’ve seen around Guidewire Cloud Platform is testament to our team’s hard work and our commitment to innovation and excellence.”
“We are pleased with the continued cloud momentum, enabling us to beat and raise our ARR outlook and deliver
Second Quarter Fiscal Year 2024 Financial Highlights
Revenue
-
Total revenue for the second quarter of fiscal year 2024 was
$240.9 million 4% from the same quarter in fiscal year 2023. Subscription and support revenue was$131.6 million 24% ; services revenue was$38.2 million 29% ; and license revenue was$71.1 million 3% , each as compared to the same quarter in fiscal year 2023. -
As of January 31, 2024, annual recurring revenue, or ARR, was
$800 million $763 million
Profitability
-
GAAP loss from operations was
$12.4 million $23.2 million -
Non-GAAP income from operations was
$25.7 million $15.1 million -
GAAP net income was
$9.7 million $9.2 million $0.12 $0.11 -
Non-GAAP net income was
$39.1 million $17.4 million $0.46 $0.21
Liquidity and Capital Resources
-
Guidewire had
$932.7 million $927.5 million $2.8 million
Business Outlook
Guidewire is issuing the following outlook for the third quarter of fiscal year 2024 based on current expectations:
-
ARR between
$815 million $820 million -
Total revenue between
$228 million $234 million -
Operating loss between
$(34) million $(28) million -
Non-GAAP operating income between
$4 million $10 million
Guidewire is updating the outlook for fiscal year 2024 based on current expectations as follows:
-
ARR between
$852 million $862 million -
Total revenue between
$957 million $967 million -
Operating loss between
$(71) million $(61) million -
Non-GAAP operating income between
$82 million $92 million -
Operating cash flow between
$120 million $140 million
Conference Call Information
What: |
Guidewire Second Quarter Fiscal Year 2024 Financial Results Conference Call |
|
When: |
Thursday, March 7, 2024 |
|
Time: |
2:00 p.m. PT (5:00 p.m. ET) |
|
Live Call: |
(877) 704-4453, Domestic |
|
Live Call: |
(201) 389-0920, International |
|
Replay: |
(844) 512-2921, Passcode 13744052, Domestic |
|
Replay |
(412) 317-6671, Passcode 13744052, International |
|
Webcast: |
http://ir.guidewire.com/ (live and replay) |
The webcast will be archived on Guidewire’s website (www.guidewire.com) for a period of three months.
Non-GAAP Financial Measures and Other Metrics
This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP tax provision (benefit), non-GAAP net income (loss) per share, and free cash flow. Non-GAAP gross profit and non-GAAP income (loss) from operations exclude stock-based compensation, amortization of intangibles, and acquisition consideration holdback. Non-GAAP net income (loss) and non-GAAP tax provision (benefit) also exclude the amortization of debt issuance costs from our convertible senior notes, gain on sale of strategic investment, and the related tax effects of the non-GAAP adjustments. Additionally, Non-GAAP net income (loss) per share excludes the interest expense on convertible debt. Free cash flow consists of net cash flow provided by (used in) operating activities less cash used for purchases of property and equipment and capitalized software development costs. These non-GAAP measures enable us to analyze our financial performance without the effects of certain non-cash items such as amortization and stock-based compensation.
Annual recurring revenue (“ARR”) is used to quantify the annualized recurring value outlined in active customer contracts at the end of a reporting period. ARR includes the annualized recurring value of term licenses, subscription agreements, support contracts, and hosting agreements based on customer contractual terms and invoicing activities for the current reporting period, which may not be the same as the timing and amount of revenue recognized. ARR reflects all fee changes due to contract renewals, non-renewals, expansion, cancellations, attrition, or renegotiations at a higher or lower fee arrangement that are effective as of the ARR reporting date. All components of the licensing and other arrangements that are not expected to recur (primarily perpetual licenses and professional services) are excluded from our ARR calculations. In some arrangements with multiple performance obligations, a portion of recurring license and support or subscription contract value is allocated to services revenue for revenue recognition purposes, but does not get allocated for purposes of calculating ARR. This revenue allocation only impacts the initial term of the contract. This means that as we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value will be recognized as services revenue, but our reported ARR amount will not be impacted. During the six months ended January 31, 2024, the recurring license and support or subscription contract value recognized as services revenue was
Guidewire believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Guidewire’s financial condition and results of operations. Guidewire’s management uses these non-GAAP measures and other metrics to compare the Company’s performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation, and for budgeting and planning purposes. Guidewire believes that the use of these non-GAAP financial measures and other metrics provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing Guidewire’s financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors.
Guidewire's management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in Guidewire’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Guidewire urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including the financial tables at the end of this press release, and not to rely on any single financial measure to evaluate Guidewire’s business.
About Guidewire
Guidewire is the platform P&C insurers trust to engage, innovate, and grow efficiently. We combine digital, core, analytics, and machine learning to deliver our platform as a cloud service. More than 540 insurers in 40 countries, from new ventures to the largest and most complex in the world, run on Guidewire.
As a partner to our customers, we continually evolve to enable their success. We are proud of our unparalleled implementation track record, with more than 1,600 successful projects, supported by the largest R&D team and partner ecosystem in the industry. Our marketplace provides hundreds of applications that accelerate integration, localization, and innovation.
For more information, please visit www.guidewire.com and follow us on X (formerly known as Twitter) @Guidewire_PandC and LinkedIn.
NOTE: For information about Guidewire’s trademarks, visit www.guidewire.com/legal-notices.
Cautionary Language Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and targets, our future business momentum relating to our product leadership and cloud deals, and our associated business plan, vision and strategy. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Guidewire’s control. Guidewire’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Guidewire’s most recent Forms 10-K and 10-Q filed with the Securities and Exchange Commission as well as other documents that may be filed by Guidewire from time to time with the Securities and Exchange Commission. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: quarterly and annual operating results may fluctuate more than expected; seasonal and other variations related to our customer agreements and related revenue recognition may cause significant fluctuations in our results of operations, ARR, and cash flows; our reliance on sales to and renewals from a relatively small number of large customers for a substantial portion of our revenue and ARR; our ability to successfully manage any changes to our business model, including the transition of our products to cloud offerings and the costs related to cloud operations and security; the timing, success, and number of professional services engagements and the billing rates and utilization of our professional services employees and contractors; recent global events (including, without limitation, the ongoing wars between
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(unaudited, in thousands) |
|||||||
|
|
|
|
||||
|
January 31,
|
|
July 31,
|
||||
ASSETS |
|
|
|
||||
CURRENT ASSETS: |
|
|
|
||||
Cash and cash equivalents |
$ |
349,989 |
|
|
$ |
401,813 |
|
Short-term investments |
|
427,634 |
|
|
|
396,872 |
|
Accounts receivable, net |
|
128,242 |
|
|
|
151,034 |
|
Unbilled accounts receivable, net |
|
90,966 |
|
|
|
87,752 |
|
Prepaid expenses and other current assets |
|
63,799 |
|
|
|
62,132 |
|
Total current assets |
|
1,060,630 |
|
|
|
1,099,603 |
|
Long-term investments |
|
155,061 |
|
|
|
128,782 |
|
Unbilled accounts receivable, net |
|
6,796 |
|
|
|
11,112 |
|
Property and equipment, net |
|
55,109 |
|
|
|
54,499 |
|
Operating lease assets |
|
48,327 |
|
|
|
52,373 |
|
Intangible assets, net |
|
11,739 |
|
|
|
14,473 |
|
Goodwill |
|
372,214 |
|
|
|
372,214 |
|
Deferred tax assets, net |
|
243,424 |
|
|
|
226,875 |
|
Other assets |
|
60,220 |
|
|
|
67,957 |
|
TOTAL ASSETS |
$ |
2,013,520 |
|
|
$ |
2,027,888 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
CURRENT LIABILITIES: |
|
|
|
||||
Accounts payable |
$ |
21,999 |
|
|
$ |
34,627 |
|
Accrued employee compensation |
|
62,669 |
|
|
|
103,980 |
|
Deferred revenue, net |
|
195,083 |
|
|
|
206,923 |
|
Other current liabilities |
|
27,325 |
|
|
|
27,731 |
|
Total current liabilities |
|
307,076 |
|
|
|
373,261 |
|
Lease liabilities |
|
39,074 |
|
|
|
42,972 |
|
Convertible senior notes, net |
|
398,033 |
|
|
|
397,171 |
|
Deferred revenue, net |
|
4,072 |
|
|
|
5,988 |
|
Other liabilities |
|
9,152 |
|
|
|
9,030 |
|
Total liabilities |
|
757,407 |
|
|
|
828,422 |
|
STOCKHOLDERS’ EQUITY: |
|
|
|
||||
Common stock |
|
8 |
|
|
|
8 |
|
Additional paid-in capital |
|
1,903,873 |
|
|
|
1,831,267 |
|
Accumulated other comprehensive income (loss) |
|
(12,434 |
) |
|
|
(13,859 |
) |
Retained earnings (accumulated deficit) |
|
(635,334 |
) |
|
|
(617,950 |
) |
Total stockholders’ equity |
|
1,256,113 |
|
|
|
1,199,466 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
2,013,520 |
|
|
$ |
2,027,888 |
|
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(unaudited, in thousands except share and per share data) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended January 31, |
|
Six Months Ended January 31, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Subscription and support |
$ |
131,642 |
|
|
$ |
105,754 |
|
|
$ |
259,269 |
|
|
$ |
204,822 |
|
License |
|
71,083 |
|
|
|
73,115 |
|
|
|
105,108 |
|
|
|
114,067 |
|
Services |
|
38,172 |
|
|
|
53,742 |
|
|
|
83,927 |
|
|
|
109,004 |
|
Total revenue |
|
240,897 |
|
|
|
232,611 |
|
|
|
448,304 |
|
|
|
427,893 |
|
Cost of revenue(1): |
|
|
|
|
|
|
|
||||||||
Subscription and support |
|
49,934 |
|
|
|
48,924 |
|
|
|
97,988 |
|
|
|
104,615 |
|
License |
|
1,483 |
|
|
|
1,845 |
|
|
|
2,702 |
|
|
|
3,718 |
|
Services |
|
47,074 |
|
|
|
58,379 |
|
|
|
92,916 |
|
|
|
123,945 |
|
Total cost of revenue |
|
98,491 |
|
|
|
109,148 |
|
|
|
193,606 |
|
|
|
232,278 |
|
Gross profit: |
|
|
|
|
|
|
|
||||||||
Subscription and support |
|
81,708 |
|
|
|
56,830 |
|
|
|
161,281 |
|
|
|
100,207 |
|
License |
|
69,600 |
|
|
|
71,270 |
|
|
|
102,406 |
|
|
|
110,349 |
|
Services |
|
(8,902 |
) |
|
|
(4,637 |
) |
|
|
(8,989 |
) |
|
|
(14,941 |
) |
Total gross profit |
|
142,406 |
|
|
|
123,463 |
|
|
|
254,698 |
|
|
|
195,615 |
|
Operating expenses(1): |
|
|
|
|
|
|
|
||||||||
Research and development |
|
65,458 |
|
|
|
61,702 |
|
|
|
127,927 |
|
|
|
119,872 |
|
Sales and marketing |
|
49,181 |
|
|
|
44,781 |
|
|
|
93,762 |
|
|
|
91,249 |
|
General and administrative |
|
40,177 |
|
|
|
40,196 |
|
|
|
79,200 |
|
|
|
82,263 |
|
Total operating expenses |
|
154,816 |
|
|
|
146,679 |
|
|
|
300,889 |
|
|
|
293,384 |
|
Income (loss) from operations |
|
(12,410 |
) |
|
|
(23,216 |
) |
|
|
(46,191 |
) |
|
|
(97,769 |
) |
Interest income |
|
10,290 |
|
|
|
5,392 |
|
|
|
20,903 |
|
|
|
10,030 |
|
Interest expense |
|
(1,692 |
) |
|
|
(1,677 |
) |
|
|
(3,375 |
) |
|
|
(3,351 |
) |
Other income (expense), net |
|
10,776 |
|
|
|
11,291 |
|
|
|
(2,966 |
) |
|
|
(2,533 |
) |
Income (loss) before provision for (benefit from) income taxes |
|
6,964 |
|
|
|
(8,210 |
) |
|
|
(31,629 |
) |
|
|
(93,623 |
) |
Provision for (benefit from) income taxes |
|
(2,723 |
) |
|
|
979 |
|
|
|
(14,245 |
) |
|
|
(15,116 |
) |
Net income (loss) |
$ |
9,687 |
|
|
$ |
(9,189 |
) |
|
$ |
(17,384 |
) |
|
$ |
(78,507 |
) |
Net income (loss) per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.12 |
|
|
$ |
(0.11 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.95 |
) |
Diluted |
$ |
0.12 |
|
|
$ |
(0.11 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.95 |
) |
Shares used in computing net income (loss) per share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
82,133,632 |
|
|
|
82,051,867 |
|
|
|
81,912,272 |
|
|
|
82,686,420 |
|
Diluted |
|
83,305,080 |
|
|
|
82,051,867 |
|
|
|
81,912,272 |
|
|
|
82,686,420 |
|
|
|||||||||||||||
(1)Amounts include stock-based compensation expense as follows: |
|||||||||||
|
Three Months Ended January 31, |
|
Six Months Ended January 31, |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Stock-based compensation expense: |
|
|
|
|
|
|
|
||||
Cost of subscription and support revenue |
$ |
3,414 |
|
$ |
3,440 |
|
$ |
6,876 |
|
$ |
6,908 |
Cost of license revenue |
|
53 |
|
|
119 |
|
|
148 |
|
|
266 |
Cost of services revenue |
|
4,643 |
|
|
4,397 |
|
|
9,432 |
|
|
9,746 |
Research and development |
|
10,138 |
|
|
10,301 |
|
|
20,124 |
|
|
19,592 |
Sales and marketing |
|
8,190 |
|
|
8,024 |
|
|
15,919 |
|
|
14,911 |
General and administrative |
|
9,989 |
|
|
9,898 |
|
|
20,025 |
|
|
19,852 |
Total stock-based compensation expense |
$ |
36,427 |
|
$ |
36,179 |
|
$ |
72,524 |
|
$ |
71,275 |
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||
(unaudited, in thousands) |
|||||||||||||||
|
Three Months Ended January 31, |
|
Six Months Ended January 31, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
9,687 |
|
|
$ |
(9,189 |
) |
|
$ |
(17,384 |
) |
|
$ |
(78,507 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
5,492 |
|
|
|
6,606 |
|
|
|
10,934 |
|
|
|
14,229 |
|
Amortization of debt issuance costs |
|
432 |
|
|
|
425 |
|
|
|
862 |
|
|
|
848 |
|
Amortization of contract costs |
|
4,681 |
|
|
|
4,107 |
|
|
|
8,745 |
|
|
|
8,597 |
|
Stock-based compensation |
|
36,427 |
|
|
|
36,179 |
|
|
|
72,524 |
|
|
|
71,275 |
|
Changes to allowance for credit losses and revenue reserves |
|
(322 |
) |
|
|
(243 |
) |
|
|
(194 |
) |
|
|
(315 |
) |
Deferred income tax |
|
(4,170 |
) |
|
|
(323 |
) |
|
|
(17,390 |
) |
|
|
(18,358 |
) |
Amortization of premium (accretion of discount) on available-for-sale securities, net |
|
(3,296 |
) |
|
|
(820 |
) |
|
|
(6,223 |
) |
|
|
(722 |
) |
Gain on sale of strategic investment |
|
(1,758 |
) |
|
|
— |
|
|
|
(1,758 |
) |
|
|
— |
|
Other non-cash items affecting net income (loss) |
|
(17 |
) |
|
|
42 |
|
|
|
(46 |
) |
|
|
76 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Accounts receivable |
|
(34,646 |
) |
|
|
(38,721 |
) |
|
|
22,547 |
|
|
|
16,524 |
|
Unbilled accounts receivable |
|
18,352 |
|
|
|
(8,801 |
) |
|
|
1,102 |
|
|
|
(29,460 |
) |
Prepaid expenses and other assets |
|
(5,971 |
) |
|
|
(3,981 |
) |
|
|
(12,531 |
) |
|
|
(4,820 |
) |
Operating lease assets |
|
2,075 |
|
|
|
1,040 |
|
|
|
4,046 |
|
|
|
4,808 |
|
Accounts payable |
|
4,770 |
|
|
|
(3,136 |
) |
|
|
(12,212 |
) |
|
|
(2,289 |
) |
Accrued employee compensation |
|
14,919 |
|
|
|
13,009 |
|
|
|
(39,657 |
) |
|
|
(32,539 |
) |
Deferred revenue |
|
24,137 |
|
|
|
7,284 |
|
|
|
(13,756 |
) |
|
|
(26,291 |
) |
Lease liabilities |
|
(1,644 |
) |
|
|
(1,276 |
) |
|
|
(3,245 |
) |
|
|
(5,717 |
) |
Other liabilities |
|
103 |
|
|
|
(982 |
) |
|
|
804 |
|
|
|
(3,554 |
) |
Net cash provided by (used in) operating activities |
|
69,251 |
|
|
|
1,220 |
|
|
|
(2,832 |
) |
|
|
(86,215 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
||||||||
Purchases of available-for-sale securities |
|
(154,607 |
) |
|
|
(101,097 |
) |
|
|
(314,846 |
) |
|
|
(270,329 |
) |
Maturities and sales of available-for-sale securities |
|
130,030 |
|
|
|
116,092 |
|
|
|
267,416 |
|
|
|
235,383 |
|
Purchases of property and equipment |
|
(2,992 |
) |
|
|
(1,333 |
) |
|
|
(3,990 |
) |
|
|
(1,937 |
) |
Capitalized software development costs |
|
(2,366 |
) |
|
|
(2,421 |
) |
|
|
(6,058 |
) |
|
|
(6,118 |
) |
Acquisition of strategic investments |
|
— |
|
|
|
(5,660 |
) |
|
|
(250 |
) |
|
|
(5,841 |
) |
Sale of strategic investment |
|
6,508 |
|
|
|
— |
|
|
|
6,508 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
(23,427 |
) |
|
|
5,581 |
|
|
|
(51,220 |
) |
|
|
(48,842 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of common stock upon exercise of stock options |
|
4 |
|
|
|
2 |
|
|
|
4 |
|
|
|
2 |
|
Repurchase and retirement of common stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(200,000 |
) |
Net cash provided by (used in) financing activities |
|
4 |
|
|
|
2 |
|
|
|
4 |
|
|
|
(199,998 |
) |
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
2,742 |
|
|
|
4,933 |
|
|
|
(1,561 |
) |
|
|
1,941 |
|
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
|
48,570 |
|
|
|
11,736 |
|
|
|
(55,609 |
) |
|
|
(333,114 |
) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period |
|
302,611 |
|
|
|
269,836 |
|
|
|
406,790 |
|
|
|
614,686 |
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period |
$ |
351,181 |
|
$ |
281,572 |
|
|
$ |
351,181 |
|
|
$ |
281,572 |
||
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES |
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||||||||||
(unaudited, in thousands) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below: |
|||||||||||||||
|
Three Months Ended January 31, |
|
Six Months Ended January 31, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Gross profit reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP gross profit |
$ |
142,406 |
|
|
$ |
123,463 |
|
|
$ |
254,698 |
|
|
$ |
195,615 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
8,110 |
|
|
|
7,956 |
|
|
|
16,456 |
|
|
|
16,920 |
|
Amortization of intangibles |
|
485 |
|
|
|
485 |
|
|
|
970 |
|
|
|
2,390 |
|
Non-GAAP gross profit |
$ |
151,001 |
|
|
$ |
131,904 |
|
|
$ |
272,124 |
|
|
$ |
214,925 |
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP income (loss) from operations |
$ |
(12,410 |
) |
|
$ |
(23,216 |
) |
|
$ |
(46,191 |
) |
|
$ |
(97,769 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
36,427 |
|
|
|
36,179 |
|
|
|
72,524 |
|
|
|
71,275 |
|
Amortization of intangibles |
|
1,367 |
|
|
|
1,367 |
|
|
|
2,734 |
|
|
|
4,154 |
|
Acquisition consideration holdback |
|
299 |
|
|
|
730 |
|
|
|
685 |
|
|
|
1,503 |
|
Non-GAAP income (loss) from operations |
$ |
25,683 |
|
|
$ |
15,060 |
|
|
$ |
29,752 |
|
|
$ |
(20,837 |
) |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP net income (loss) |
$ |
9,687 |
|
|
$ |
(9,189 |
) |
|
$ |
(17,384 |
) |
|
$ |
(78,507 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
36,427 |
|
|
|
36,179 |
|
|
|
72,524 |
|
|
|
71,275 |
|
Amortization of intangibles |
|
1,367 |
|
|
|
1,367 |
|
|
|
2,734 |
|
|
|
4,154 |
|
Acquisition consideration holdback |
|
299 |
|
|
|
730 |
|
|
|
685 |
|
|
|
1,503 |
|
Amortization of debt issuance costs |
|
432 |
|
|
|
425 |
|
|
|
862 |
|
|
|
848 |
|
Gain on sale of strategic investment (1) |
|
(1,809 |
) |
|
|
— |
|
|
|
(1,809 |
) |
|
|
— |
|
Tax impact of non-GAAP adjustments |
|
(7,327 |
) |
|
|
(46,863 |
) |
|
|
(18,820 |
) |
|
|
(26,485 |
) |
Non-GAAP net income (loss) |
$ |
39,076 |
|
|
$ |
(17,351 |
) |
|
$ |
38,792 |
|
|
$ |
(27,212 |
) |
|
|
|
|
|
|
|
|
||||||||
Tax provision (benefit) reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP tax provision (benefit) |
$ |
(2,723 |
) |
|
$ |
979 |
|
|
$ |
(14,245 |
) |
|
$ |
(15,116 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
3,839 |
|
|
|
56,765 |
|
|
|
7,218 |
|
|
|
84,391 |
|
Amortization of intangibles |
|
144 |
|
|
|
2,145 |
|
|
|
272 |
|
|
|
4,339 |
|
Acquisition consideration holdback |
|
32 |
|
|
|
1,145 |
|
|
|
68 |
|
|
|
1,753 |
|
Amortization of debt issuance costs |
|
46 |
|
|
|
667 |
|
|
|
86 |
|
|
|
1,000 |
|
Gain on sale of strategic investment (1) |
|
(191 |
) |
|
|
— |
|
|
|
(191 |
) |
|
|
— |
|
Tax impact of non-GAAP adjustments |
|
3,457 |
|
|
|
(13,859 |
) |
|
|
11,367 |
|
|
|
(64,998 |
) |
Non-GAAP tax provision (benefit) |
$ |
4,604 |
|
|
$ |
47,842 |
|
|
$ |
4,575 |
|
|
$ |
11,369 |
|
(1) During the three months ended January 31, 2024, one of Guidewire’s strategic investments was acquired by a privately-held limited partnership. As a result, Guidewire received |
|||||||||||||||
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES |
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||||||||||
(unaudited, in thousands except share and per share data) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below: |
|||||||||||||||
|
Three Months Ended January 31, |
|
Six Months Ended January 31, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP net income (loss) per share – diluted |
$ |
0.12 |
|
|
$ |
(0.11 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.95 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
0.44 |
|
|
|
0.44 |
|
|
|
0.88 |
|
|
|
0.86 |
|
Amortization of intangibles |
|
0.02 |
|
|
|
0.02 |
|
|
|
0.04 |
|
|
|
0.05 |
|
Acquisition consideration holdback |
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.02 |
|
Amortization of debt issuance costs |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.02 |
|
Gain on sale of strategic investment (1) |
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
Tax impact of non-GAAP adjustments |
|
(0.09 |
) |
|
|
(0.58 |
) |
|
|
(0.23 |
) |
|
|
(0.34 |
) |
Interest expense on convertible debt (2) |
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation |
|
(0.03 |
) |
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
Non-GAAP net income (loss) per share – diluted |
$ |
0.46 |
|
|
$ |
(0.21 |
) |
|
$ |
0.47 |
|
|
$ |
(0.34 |
) |
|
|
|
|
|
|
|
|
||||||||
Shares used in computing Non-GAAP income (loss) per share amounts: |
|
|
|
|
|
|
|
||||||||
GAAP weighted average shares – diluted |
|
83,305,080 |
|
|
|
82,051,867 |
|
|
|
81,912,272 |
|
|
|
82,686,420 |
|
Non-GAAP dilutive shares excluded from GAAP income (loss) per share calculation |
|
3,516,480 |
|
|
|
— |
|
|
|
1,031,222 |
|
|
|
— |
|
Pro forma weighted average shares — diluted |
|
86,821,560 |
|
|
|
82,051,867 |
|
|
|
82,943,494 |
|
|
|
82,686,420 |
|
(1) During the three months ended January 31, 2024, one of Guidewire’s strategic investments was acquired by a privately-held limited partnership. As a result, Guidewire received |
|||||||||||||||
| (2) During the three months ended January 31, 2024, Guidewire's convertible senior notes were dilutive due to non-GAAP net income. Accordingly, |
|||||||||||||||
The following table summarizes our free cash flow for the periods indicated below:
|
Three Months Ended January 31, |
|
Six Months Ended January 31, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Free cash flow: |
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities |
$ |
69,251 |
|
|
$ |
1,220 |
|
|
$ |
(2,832 |
) |
|
$ |
(86,215 |
) |
Purchases of property and equipment |
|
(2,992 |
) |
|
|
(1,333 |
) |
|
|
(3,990 |
) |
|
|
(1,937 |
) |
Capitalized software development costs |
|
(2,366 |
) |
|
|
(2,421 |
) |
|
|
(6,058 |
) |
|
|
(6,118 |
) |
Free cash flow |
$ |
63,893 |
|
|
$ |
(2,534 |
) |
|
$ |
(12,880 |
) |
|
$ |
(94,270 |
) |
GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES |
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Outlook |
|||||||||||||||
The following table reconciles the specific items excluded from GAAP outlook in the calculation of non-GAAP outlook for the periods indicated below (in millions): |
|||||||||||||||
|
Third Quarter Fiscal Year 2024 |
|
Fiscal Year 2024 |
||||||||||||
Income (loss) from operations outlook reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP income (loss) from operations |
$ |
(34 |
) |
— |
$ |
(28 |
) |
|
$ |
(71 |
) |
— |
$ |
(61 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
37 |
|
— |
|
37 |
|
|
|
147 |
|
— |
|
147 |
|
Amortization of intangibles |
|
1 |
|
— |
|
1 |
|
|
|
5 |
|
— |
|
5 |
|
Acquisition consideration holdback |
|
— |
|
— |
|
— |
|
|
|
1 |
|
— |
|
1 |
|
Non-GAAP income (loss) from operations |
$ |
4 |
|
— |
$ |
10 |
|
|
$ |
82 |
|
— |
$ |
92 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240307951338/en/
Investor:
Alex Hughes
Guidewire
(650) 356-4921
ir@guidewire.com
Media:
Diana Stott
Guidewire
(650) 781-9955
dstott@guidewire.com
Source: Guidewire Software, Inc.
FAQ
What was Guidewire's total revenue for the second quarter of fiscal year 2024?
How did subscription and support revenue perform in the second quarter of fiscal year 2024?
What was the annual recurring revenue (ARR) for Guidewire as of January 31, 2024?
What was Guidewire's GAAP loss from operations for the second quarter of fiscal year 2024?
How much cash did Guidewire have in hand as of January 31, 2024?
What is Guidewire's business outlook for the third quarter of fiscal year 2024 in terms of ARR and total revenue?
What is the updated ARR range for Guidewire for fiscal year 2024?
