Guidewire (NYSE: GWRE) today announced its financial results for
the fiscal quarter ended January 31, 2024.
“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 65% non-GAAP
subscription and support gross margins in the quarter,” said Jeff
Cooper, chief financial officer, Guidewire. “Our fiscal year 2024
revenue outlook change is due to lower expected services revenue,
as we are seeing success with our SI partners leading more cloud
engagements at a pace that is faster than we originally expected.
We are maintaining our profitability outlook as strong subscription
and support gross margin and operating expense discipline offset
the impact of lower services revenue.”
Second Quarter Fiscal Year 2024 Financial Highlights
Revenue
- Total revenue for the second quarter of fiscal year 2024 was
$240.9 million, an increase of 4% from the same quarter in fiscal
year 2023. Subscription and support revenue was $131.6 million, an
increase of 24%; services revenue was $38.2 million, a decrease of
29%; and license revenue was $71.1 million, a decrease of 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, compared to $763 million as of July 31, 2023. ARR
results for interim quarterly periods in fiscal year 2024 are based
on actual currency rates at the end of fiscal year 2023, held
constant throughout the year.
Profitability
- GAAP loss from operations was $12.4 million for the second
quarter of fiscal year 2024, compared with GAAP loss from
operations of $23.2 million for the same quarter in fiscal year
2023.
- Non-GAAP income from operations was $25.7 million for the
second quarter of fiscal year 2024, compared with non-GAAP income
from operations of $15.1 million for the same quarter in fiscal
year 2023.
- GAAP net income was $9.7 million for the second quarter of
fiscal year 2024, compared with GAAP net loss of $9.2 million for
the same quarter in fiscal year 2023. GAAP net income per share was
$0.12, based on diluted weighted average shares outstanding of 83.3
million, compared to a GAAP net loss per share of $0.11 for the
same quarter in fiscal year 2023, based on diluted weighted average
shares outstanding of 82.1 million.
- Non-GAAP net income was $39.1 million for the second quarter of
fiscal year 2024, compared with non-GAAP net loss of $17.4 million
for the same quarter in fiscal year 2023. Non-GAAP net income per
share was $0.46, based on diluted weighted average shares
outstanding of 86.8 million, compared to a non-GAAP net loss per
share of $0.21 for the same quarter in fiscal year 2023, based on
diluted weighted average shares outstanding of 82.1 million.
Liquidity and Capital Resources
- Guidewire had $932.7 million in cash, cash equivalents, and
investments at January 31, 2024, compared to $927.5 million at July
31, 2023. Guidewire used $2.8 million in cash from operations
during the six months ended January 31, 2024.
Business Outlook
Guidewire is issuing the following outlook for the third quarter
of fiscal year 2024 based on current expectations:
- ARR between $815 million and $820 million
- Total revenue between $228 million and $234 million
- Operating loss between $(34) million and $(28) million
- Non-GAAP operating income between $4 million and $10
million
Guidewire is updating the outlook for fiscal year 2024 based on
current expectations as follows:
- ARR between $852 million and $862 million
- Total revenue between $957 million and $967 million
- Operating loss between $(71) million and $(61) million
- Non-GAAP operating income between $82 million and $92
million
- Operating cash flow between $120 million and $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 $5.2 million.
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
Israel and Hamas and between Russia and Ukraine, escalating
tensions in the South China Sea, high inflation, global pandemics,
bank failures and associated financial instability and crises, and
supply chain issues) and their impact on our employees and our
business and the businesses of our customers, system integrator
(“SI”) partners, and vendors; data security breaches of our
cloud-based services or products or unauthorized access to our or
our customers’ data; our competitive environment and changes
thereto; issues in the development and use of artificial
intelligence and machine learning combined with an uncertain
regulatory environment; our services revenue produces lower gross
margins than our license, subscription and support revenue; our
product development and sales cycles are lengthy and may be
affected by factors outside of our control; the impact of new
regulations and laws (including, without limitation, security,
privacy, artificial intelligence and machine learning, tax
regulations and laws, and accounting standards); assertions by
third parties that we violate their intellectual property rights;
weakened global economic conditions may adversely affect the
P&C insurance industry, including the rate of information
technology spending; general political or destabilizing events,
including war, conflict or acts of terrorism; our ability to sell
our products is highly dependent on the quality of our professional
services and SI partners; the risk of losing key employees; the
challenges of international operations, including changes in
foreign exchange rates in countries such as Argentina; and other
risks and uncertainties. Past performance is not indicative of
future results. The forward-looking statements included in this
press release represent Guidewire’s views as of the date of this
press release. Guidewire anticipates that subsequent events and
developments will cause its views to change. Guidewire undertakes
no intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. These forward-looking statements should not be relied
upon as representing Guidewire’s views as of any date subsequent to
the date of this press release.
GUIDEWIRE SOFTWARE, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in thousands)
January 31,
2024
July 31, 2023
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 $12.1 million in consideration for its equity interest in
the investee, composed of $6.5 million in cash and $5.6 million of
an ownership interest in the privately-held limited partnership,
and recognized a $1.8 million gain in excess of cost in other
income (expense), net. Prior to the second quarter of fiscal year
2024, there were no transactions similar to the gain on sale of
strategic investment in any periods presented.
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 $12.1 million in consideration for its equity interest in
the investee, composed of $6.5 million in cash and $5.6 million of
an ownership interest in the privately-held limited partnership,
and recognized a $1.8 million gain in excess of cost in other
income (expense), net. Prior to the second quarter of fiscal year
2024, there were no transactions similar to the gain on sale of
strategic investment in any periods presented.
(2) During the three months ended January 31, 2024,
Guidewire's convertible senior notes were dilutive due to non-GAAP
net income. Accordingly, $1.0 million of interest expense related
to the convertible senior notes was excluded from non-GAAP net
income (loss) per share calculation under the “if-converted”
method.
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
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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
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