Company Reports

Guidewire is the leading specialist provider of core software to property and casualty insurers. Its products run mission-critical workflows spanning policy administration, billing, and claims, and the company now serves carriers representing more than 25% of industry direct written premiums. The central strategic opportunity is the industry's long-delayed modernization: many insurers still operate inflexible legacy systems, in some cases rooted in technology built decades ago, while Guidewire is moving customers toward the InsuranceSuite Cloud.

Guidewire's fiscal fourth-quarter results were strong. Revenue increased 15% and non-GAAP EPS increased 21%, both ahead of guidance. Fiscal 2026 annual recurring revenue grew 19% on a constant-currency basis, above the high end of management’s prior outlook.

Guidewire's fiscal third-quarter revenue grew by 27% year over year to $373 million, and non-GAAP operating margin was 20.9%, both of which topped the high end of guidance. The fourth-quarter outlook was also better than anticipated for both revenue and non-GAAP operating profit.

Guidewire's fiscal second-quarter revenue grew by 24% year over year to $359 million, and non-GAAP operating margin was 24.3%, both of which topped the high end of guidance. The full-year outlook was raised for revenue and operating profits by more than upside within the quarter.

Guidewire spent years developing leading software for property and casualty insurers and endeavoring to win mandates to upgrade aging core legacy systems to Guidewire’s solutions. While the modernization journey continues, Guidewire is now leading insurers to move to the cloud, once again disrupting a sleepy industry that has been underserved by legacy software vendors. We see a long runway for growth in the form of new client wins, expansions to additional lines within existing customers, and cross-selling additional solutions.

The pace of change in the software industry has accelerated in recent months, leading to heightened uncertainty and prompting us to reassess our moat ratings.

Guidewire's fiscal first-quarter revenue grew by 27% year over year to $333 million and non-GAAP operating margin was 19.1%, both of which topped the high end of guidance. The company’s outlook topped FactSet consensus estimates on both the top and bottom lines.

Guidewire spent years developing leading software for property and casualty, or P&C, insurers and endeavoring to win mandates to upgrade aging core legacy systems to Guidewire’s solutions. While the modernization journey continues, Guidewire is now leading insurers to move to the cloud, once again disrupting a sleepy industry that has been underserved by legacy software vendors. We see a long runway for growth, in the form of new client wins, expansions to additional lines within existing customers, and cross-selling additional solutions.

Guidewire spent years developing leading software for property and casualty, or P&C, insurers and endeavoring to win mandates to upgrade aging core legacy systems to Guidewire’s solutions. While the modernization journey continues, Guidewire is now leading insurers to move to the cloud, once again disrupting a sleepy industry that has been underserved by legacy software vendors. We see a long runway for growth, in the form of new client wins, expansions to additional lines within existing customers, and cross-selling additional solutions.

Guidewire's fiscal fourth-quarter revenue grew by 22% year over year to $357 million and non-GAAP operating margin was 20.6%, both of which topped the high end of guidance. The company’s outlook topped FactSet consensus estimates on both the top and bottom lines.

We believe Guidewire is reaping the benefits of years of groundwork in the form of convincing property and casualty insurers to upgrade their aging core legacy systems to Guidewire’s solutions. In our view, the company has used a modern software platform to disrupt a sleepy industry that has been underserved by legacy software vendors, and we still see a long runway for additional growth for Guidewire.

Guidewire's fiscal third-quarter revenue grew by 22% year over year to $294 million, while non-GAAP operating margin was 15.7%, both of which topped the high end of guidance.

We believe Guidewire is reaping the benefits of years of groundwork in the form of convincing property and casualty insurers to upgrade their aging core legacy systems to Guidewire’s solutions. In our view, the company has used a modern software platform to disrupt a sleepy industry that has been underserved by legacy software vendors, and we still see a long runway for additional growth for Guidewire.

We raise our fair value estimate to $145 per share from $140 for wide-moat Guidewire, after another good quarter featuring better-than-expected results and guidance. This quarter represents another in a string of good (or better) quarters for the company that has helped propel our estimates higher. Momentum is clearly on Guidewire’s side from many angles, including successful implementations, improving win rates, cloud migrations, and larger deals. Management is bullish about the demand environment, which continues to manifest in both results and guidance. As a result, we inched our near-term growth and margin estimates upward. Despite our estimates being above FactSet consensus estimates for this year and next, we see shares as overvalued. However, we acknowledge strong momentum and continue to view Guidewire as the clear leader in core software for the P&C insurance industry.

We believe Guidewire is reaping the benefits of years of groundwork in the form of convincing property and casualty insurers to upgrade their aging core legacy systems to Guidewire’s solutions. In our view, the company has used a modern software platform to disrupt a sleepy industry that has been underserved by legacy software vendors, and we still see a long runway for additional growth for Guidewire.

We raise our fair value estimate to $140 per share from $125 for wide-moat Guidewire after a strong fiscal 2025 first quarter that easily beat the top end of guidance for revenue and profitability. Revenue guidance was also better than expected, on the heels of what we noted last quarter was among the strongest outlooks over the last couple of years in our coverage. Management is bullish about the demand environment, which is showing up in results and guidance, and we have raised our growth margin estimates for the next several years. Despite our estimates being above FactSet consensus for this year and next, we see the shares as overvalued.

Guidewire hosted a workman-like analyst day like a well-deserved victory lap after the company has slowly built momentum over the last two to three years since the launch of the Guidewire cloud platform. The company spent much effort defining and projecting the financial and marketing arcs it was embarking on, and seeing it all in its full glory is remarkable. That journey is certainly not complete. While the target operating model was consistent with the prior vision, management discussed priorities and growth levers during the event. This is not unexpected after Guidewire reported strong results for its fiscal fourth quarter and provided stout guidance in early September. Accordingly, our investment thesis is unchanged, and we maintain our wide moat rating and fair value estimate of $125 per share.

We raise our fair value estimate to $125 per share from $102 for wide-moat Guidewire, after a strong fiscal fourth quarter that topped our revenue estimate while falling short of our aggressive profitability estimate. The full-year revenue outlook was among the strongest we have seen in our coverage over the last couple of years. Management is bullish about the demand environment, which is showing up in results and guidance. We raise our revenue growth estimates over the next several years based on a strong guide and surging annually recurring revenue, or ARR, but we still see shares as overvalued. We still see Guidewire as the primary winner as the property and casualty insurance industry continues to modernize and display durable momentum, with customers selecting the platform.

We believe Guidewire is reaping the benefits of years of groundwork in the form of convincing property and casualty insurers to upgrade their aging core legacy systems to Guidewire’s solutions. In our view, the company has used a modern software platform to disrupt a sleepy industry that has been underserved by legacy software vendors, and we still see a long runway for additional growth for Guidewire.

We raise our fair value estimate to $102 per share from $98 for wide-moat Guidewire, after the firm reported strong fiscal third-quarter results that bested our expectations on both the top and bottom lines. We raise our near-term estimates based on more rapid improvements in operations and solid guidance, but we still see shares as overvalued. Management believes the demand environment is gaining momentum for the property and casualty insurance industry, but said that this vertical should not be conflated with enterprise software overall. Guidewire also made good progress with its shifting of implementation projects to system integration partners, which helps margins. Guidance for the year was raised by slightly more than the upside in the quarter, which we view as a bullish sign. We continue to see Guidewire as the primary winner as the P&C insurance industry continues to modernize and display durable momentum, with customers selecting the platform.