Summary
Guidewire closed fiscal 2024 with fourth-quarter revenue of $291.5 million, up 8.0% from the prior-year quarter. Gross profit rose 13.9% to $186.4 million, and operating income climbed 69.2% to $10.3 million. Gross margin improved by 3.3 percentage points to 64.0%, while operating margin rose 1.3 percentage points to 3.5%. The quarter's GAAP net loss was $6.1 million, a swing to a loss from the prior-year quarter. Diluted EPS for the full fiscal year was -$0.07, an improvement of $1.29 from the prior-year period.
For the full fiscal year, revenue was $980.5 million, up 8.3%. Gross profit was $583.4 million, up 27.3%. The full-year operating loss was $52.6 million, a $96.9 million improvement from the prior year. The full-year net loss was $6.1 million, a $105.8 million improvement from the prior year. Gross margin for the year was 59.5%, up 8.9 percentage points, and operating margin was negative 5.4%, up 11.2 percentage points.
Operating cash flow was $193.8 million for the quarter, up 11.9%, and $195.7 million for the full year, up 409.8%. Capital expenditures were $1.7 million for the quarter, down 47.2%, and $6.4 million for the full year, up 9.3%. Deferred revenue was $285.5 million, up 34.1% from the prior-year quarter. Remaining performance obligations were $2.0 billion, up 33.3%.
Non-GAAP results showed fourth-quarter income from operations of $49.0 million, compared with $44.7 million a year earlier, and non-GAAP net income of $54.0 million, compared with $62.8 million. For the full year, non-GAAP income from operations was $99.5 million, compared with $11.7 million, and non-GAAP net income was $114.5 million, compared with $29.2 million. ARR was $864 million at July 31, 2024, or $872 million based on July 31, 2023 currency rates. ARR grew 14% on a constant currency basis, and fully ramped ARR grew 19%.
Guidance for the first quarter of fiscal 2025 calls for ARR between $869 million and $874 million and non-GAAP operating income between $18 million and $24 million. For the full fiscal year 2025, Guidewire expects ARR between $995 million and $1,005 million and non-GAAP operating income between $157 million and $171 million.
The company faces risks tied to lengthy sales cycles, reliance on a relatively small number of large customers, and the shift from term licenses to cloud subscriptions. Global events, inflation, high interest rates, bank failures, and supply chain issues could affect customer spending and direct written premium, which drives pricing. AI and machine learning development carries regulatory and security risks. Cybersecurity breaches, competition, and the need to manage cloud operations costs also remain concerns. Services revenue produces lower gross margins than license, subscription, and support revenue, and the company expects services revenue could be flat or decline in the near term as system integrator partners lead more implementations.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $291.5M | $240.7M | +21.1% | $270.0M | +8.0% |
| Gross profit | $186.4M | $142.2M | +31.1% | $163.7M | +13.9% |
| Gross margin | 64.0% | 59.1% | +4.9 pp | 60.6% | +3.3 pp |
| Research & development | $75.3M | $66.1M | +13.9% | $66.8M | +12.7% |
| Sales & marketing | $54.8M | $50.5M | +8.5% | $50.1M | +9.3% |
| General & administrative | $46.0M | $42.3M | +8.8% | $40.7M | +13.2% |
| Total operating expenses | $176.1M | $158.9M | +10.8% | $157.6M | +11.8% |
| Operating income (loss) | $10.3M | -$16.7M | +161.8% | $6.1M | +69.2% |
| Operating margin | 3.5% | -6.9% | +10.5 pp | 2.3% | +1.3 pp |
| Net income (loss) | $16.8M | -$5.5M | +405.9% | $12.2M | +37.1% |
| Net margin | 5.8% | -2.3% | +8.0 pp | 4.5% | +1.2 pp |
| Diluted EPS | $0.20 | -$0.07 | +$0.27 | $0.15 | +$0.05 |
Risks
The filing materially expands AI risk, noting Guidewire uses and is incorporating machine learning and generative AI in offerings and business, with evolving regulation, IP uncertainty, and potential defects or inaccurate outputs. It also says competitors may gain advantage through new or better use of evolving AI technologies such as generative AI.
Sales and implementation cycles are lengthy and variable, with implementations typically lasting six to 24 months or longer and customers having significant negotiating power. MD&A says evaluation periods can extend further if a customer purchases multiple products or is considering a first cloud subscription move.
Revenue and ARR depend on a relatively small number of P&C insurance customers; the ten largest customers accounted for 22% of revenue in fiscal 2024 and 22% of total ARR at July 31, 2024. Loss, deferral, or non-renewal by a top customer could significantly harm results.
Subscription and support revenue rose to 56% of total revenue in fiscal 2024 from 48% in fiscal 2023, but subscription revenue is recognized ratably and has lower gross margin than license revenue. MD&A says this shift may adversely affect near-term reported revenue growth and overall gross margin.
As of July 31, 2024, $400.0 million principal of 1.25% Convertible Senior Notes is due March 2025. Working capital decreased to $457.9 million as of July 31, 2024 from $726.3 million as of July 31, 2023, primarily because the notes became current, and failure to settle or refinance could cause default or liquidity strain.
Services revenue was 18% of total revenue in fiscal 2024 and its gross margin was negative in both fiscal 2024 and fiscal 2023. MD&A says services revenue decreased 14% and could be flat or decline near term as SI partners lead more implementations and migrations.
A significantly higher percentage of annual license revenue and cash receipts is recognized in the fourth fiscal quarter ending July 31, and subscription ratable recognition may not fully reflect Q4 orders until the following fiscal year. This can cause significant quarterly fluctuations and forecast misses.
Competition for qualified personnel is intense, especially in the San Francisco Bay Area, and the filing notes increased attrition and fewer available candidates have lengthened hiring times. Loss of several sales people within a short period could negatively impact sales efforts.
Global events, inflation, high interest rates, conflicts, and P&C industry consolidation may cause customers to defer or cancel purchases, lengthen sales cycles, or impair receivables. MD&A says these disruptions may affect ARR and revenue growth rates, services margins, and operating cash flow.
SaaS KPIs
All quarters →ARR
Free Cash Flow
Non-GAAP Income from Operations
Summary, forecast, risks and KPIs are extracted from Guidewire Software, Inc.'s SEC filings for Q4 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.