Guidewire Software (GWRE) Q4 2024 earnings summary

Executive summary

• Achieved strong Q4 and FY24 results, including record fourth quarter sales and fully ramped ARR growth of 19%, validating the multi-year cloud transformation and operational discipline.

• Cloud platform maturity and customer success stories are driving increased demand and adoption, positioning for continued modernization in the P&C industry.

• Closed 16 cloud deals in Q4 and 42 for the year, with a healthy pipeline entering FY25.

• Net new customer wins and significant expansions highlight competitive strength across carrier sizes.

• Strong financial results with improved profitability and robust cash flow from operations, highlighting the durability of the business model.

Financial highlights

• FY24 total revenue was $980.5M, up 8% year-over-year; subscription revenue up 36% and now nearly 50% of total revenue.

• Annual Recurring Revenue (ARR) reached $872M, up 14% year-over-year on a constant currency basis; fully ramped ARR grew 19%.

• Subscription and support gross margin increased over 10 points to 65.5%; overall gross margin at 63%.

• Non-GAAP operating income was $99.5M; non-GAAP net income was $114.5M; operating cash flow reached $196M.

• Ended the year with $1.13B in cash and investments; $400M in convertible debt maturing in March to be settled in cash.

Outlook and guidance

• FY25 ARR expected between $995M–$1.005B, representing 16% constant currency growth.

• FY25 total revenue guidance is $1.135B–$1.149B; subscription revenue expected to grow 34%.

• Subscription and support gross margin targeted at 68%; total gross margin at 65%.

• Non-GAAP operating income forecasted at $157M–$171M; GAAP operating income between -$4M and +$10M.

• FY25 operating cash flow expected at $220M–$250M; CapEx between $20M–$25M.