10-Q · June 4, 2026
Guidewire's Q3 FY2026 results showcased strong performance with revenue reaching $372.5 million, a 27% increase year-over-year, and EPS of $0.82 beating estimates. Despite the growth, management pointed to challenges…
Earnings analysis · 10-K
GWRE earnings analysis
Filed September 11, 2026 · Our reading of the company's report
The latest report
Guidewire’s fiscal 2026 results show a strong cloud-transition inflection: revenue grew 23%, ARR rose 19%, operating margin expanded to 10%, and free cash flow increased to $358.7 million. The strategy centers on…
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Guidewire’s fiscal 2026 results show a strong cloud-transition inflection: revenue grew 23%, ARR rose 19%, operating margin expanded to 10%, and free cash flow increased to $358.7 million. The strategy centers on Guidewire Cloud Platform, recurring subscription adoption, continued product releases and embedded AI capabilities, with growth broad-based across the Americas, EMEA and APAC. The principal offsets are customer concentration and pricing leverage, execution and regulatory risks around AI, and reduced liquidity following $606.3 million of share repurchases.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.63
What stood out
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Cloud transition is driving growth
Guidewire is transitioning its core InsuranceSuite and InsuranceNow products to cloud subscriptions on the proprietary Guidewire Cloud Platform. Subscription revenue increased 37% to $915.792 million, while total subscription and support revenue rose 33% to $970.885 million, reaching 66% of total revenue.
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Platform breadth and ARR expanded
The company describes InsuranceSuite as a configurable, scalable platform with five core applications and multiple releases each year; it also embeds digital, analytics, predictive AI and generative AI capabilities. ARR increased 19% to $1.237 billion as of July 31, 2026.
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Profitability inflected sharply
Fiscal 2026 revenue increased 23% to $1.475 billion from $1.202 billion in fiscal 2025 and $980.5 million in fiscal 2024. GAAP operating margin improved to 10% from 3% and negative 5% in those years, respectively, while diluted EPS rose to $1.63 from $0.81 and negative $0.07.
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Mix shift is improving margins
Gross margin improved to 64% in fiscal 2026 from 63% in fiscal 2025 and 59% in fiscal 2024. Subscription and support gross margin rose to 73% from 68%, while services gross margin remained low at 3% after being negative in fiscal 2024.
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Cash generation strengthened
Free cash flow increased to $358.657 million from $280.412 million in fiscal 2025 and $194.411 million in fiscal 2024, while operating cash flow rose to $389.716 million from $300.867 million. The filing attributes the increase primarily to higher net income and deferred revenue growth of $93.675 million.
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Buybacks dominated capital allocation
Capital allocation was shareholder-return focused: Guidewire repurchased 4,085,350 shares for $606.309 million during fiscal 2026 at an average price of $148.41. The company also invested $19.003 million in capitalized software development, $12.056 million in property and equipment, $37.953 million in acquisitions and $14.646 million in strategic investments.
What to watch
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AI execution and regulatory risk
The filing materially expands the AI risk discussion: Guidewire says third-party AI infrastructure and foundation-model disruptions, pricing changes or model deprecation could constrain its roadmap and increase costs, while AI-generated defects or improper use could create liability and reputational harm. It also cites evolving rules such as the EU AI Act and says compliance could restrict deployment of AI features in some markets.
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Large-customer concentration and pricing
Customer concentration remains material: the ten largest customers represented 21% of fiscal 2026 revenue versus 20% in fiscal 2025, and the ten largest customers represented 20% of total ARR as of July 31, 2026. The filing also warns that large insurers have substantial bargaining power and may demand lower average selling prices, delayed ARR ramps or additional product features.
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Buybacks reduce liquidity flexibility
Liquidity declined materially after repurchases: cash, cash equivalents and investments fell to $1.215 billion from $1.483 billion, while working capital declined to $522.5 million from $962.6 million. Guidewire had $690.0 million of convertible notes outstanding, a $300.0 million secured revolving facility, and $283.7 million of purchase commitments, including a cloud-infrastructure agreement with a total five-year obligation of $600 million.
Management's outlook
The 10-K does not provide numeric fiscal 2027 revenue or EPS guidance. The company’s FY2027 outlook was provided in the September 3, 2026 earnings release/call rather than this filing.
Earlier filings 4
10-Q · March 6, 2026
Guidewire reported revenue of $359,095,000 and GAAP diluted EPS of $0.70 for the quarter ended January 31, 2026, beating prior-year results and showing sequential improvement. Gross margin expanded to ~64.5% and…
10-K · September 11, 2025
Guidewire positions itself as the P&C industry’s cloud-first core platform (InsuranceSuite, InsuranceNow) built on the Guidewire Cloud Platform (GWCP) to capture long-term subscription revenue (initial agreements…
10-Q · June 4, 2025
Guidewire reported quarterly revenue of $293.51M (three months ended April 30, 2025), up $52.83M vs. the year-ago quarter and producing positive operating income of $4.47M and diluted EPS of $0.54. Subscription and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.