Guidewire Software (GWRE) investor relations material

Executive summary

• Q3 FY26 delivered strong momentum with total revenue of $373 million, up 27% year-over-year, and ARR reaching $1.147 billion, up 19% year-over-year, driven by robust cloud and AI-driven product demand and notable wins in the US, UK, Brazil, and EMEA.

• Subscription and support revenue grew 35% year-over-year to $245 million, now 66% of total revenue, while services revenue increased 32%.

• Net income for Q3 FY26 was $16.5 million, impacted by foreign currency losses, while non-GAAP net income was $69.6 million.

• Leadership transition announced: Shane Cassidy to become Chief Commercial Officer after Q4.

• The company raised its full-year outlook for revenue, operating income, and cash flow based on Q3 performance and improved pipeline visibility.

Financial highlights

• Q3 total revenue reached $373 million, up 27% year-over-year, surpassing guidance.

• Subscription and support revenue was $245 million, up 35% year-over-year; services revenue was $72 million, up 32%.

• Gross profit was $247 million (29% growth), with overall gross margin at 66%.

• Non-GAAP operating margin was $78 million (21% of revenue), up 69% year-over-year; GAAP operating margin was $31 million (8% of revenue), up 586% year-over-year.

• Free cash flow for Q3 FY26 was $105.7 million; cash and investments at quarter-end totaled $1.15 billion.

Outlook and guidance

• FY26 outlook raised: ending ARR $1.229–$1.237 billion; subscription and support revenue $963–$969 million; total revenue $1.46–$1.47 billion.

• GAAP operating income forecasted at $124–$134 million; non-GAAP at $314–$324 million.

• Operating cash flow guidance raised to $365–$380 million; CapEx expected at $30–$35 million.

• Management expects subscription arrangements to remain the majority of new sales, with continued growth in cloud migration.

• Gross margin is expected to continue improving as cloud operations scale, though at a slower rate.