Guidewire Set to Report Q3 Earnings: Here's What Investors Should Know
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Guidewire Software, Inc GWRE is slated to report third-quarter fiscal 2025 results tomorrow.
Management expects revenues to be in the range of $283-$289 million. The Zacks Consensus Estimate is pegged at $285.7 million, indicating an 18.7% increase from the prior-year quarter's level.
The consensus estimate for the bottom line is pegged at 46 cents, which remained unchanged in the past 60 days. GWRE reported earnings of 26 cents per share in the year-ago period.
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It delivered a trailing four-quarter earnings surprise of 40.2%, on average. Shares of GWRE have gained 96.1% in the past year compared with the Internet-Software industry’s growth of 35%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Factors to Note Ahead of GWRE’s Q3 Release
Guidewire’s performance is likely to have benefited from continued momentum in its cloud-based solutions. GWRE is expected to have benefited from secular tailwinds in the property & casualty insurance industry, especially as climate-driven catastrophes highlight the critical role of robust risk infrastructure.
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Solid deal volume across all tiers (especially Tier 1 insurers) and increasing international momentum, especially in Asia Pacific and Europe, are other tailwinds. In the last reported quarter, Guidewire Cloud reported 12 deal wins. Out of these deals, four were for InsuranceSuite Cloud, one InsuranceNow deal and the remainder for one or two core X Center applications.
The company’s focus on enhancing the Guidewire Cloud platform with new capabilities is expected to have boosted sales of subscription-based solutions. Management expects subscription and support revenues of $178 million, with services revenues of $52 million. GWRE noted that sequential growth in subscription revenues will be modest due to three fewer calendar days in the third quarter.
The company has been expanding its partner ecosystem, including more than 500 cloud apps on Guidewire Marketplace and more than 10,500 certified professionals, to drive sustained activity and greater value from the platform.
Guidewire Software, Inc. Price and EPS Surprise
Guidewire Software, Inc. price-eps-surprise | Guidewire Software, Inc. Quote
For the third quarter of fiscal 2025, ARR is anticipated to be between $942 million and $947 million. We expect ARR to be $944.6 million.
GWRE’s efforts to drive cloud operations efficiency to boost cloud margins remain an additional tailwind. The company’s expectation for non-GAAP operating income is pinned in the range of $36-$42 million. Subscription and support non-GAAP gross margin is expected to remain strong at 68-69%, while services gross margins are guided at 10%.