Guidewire Announces Fourth Quarter and Fiscal Year 2026 Financial Results

News Release View printer-friendly version « Back SAN MATEO, Calif.--(BUSINESS WIRE)--Sep. 3, 2026-- Guidewire (NYSE: GWRE) today announced its financial results for the fiscal quarter and year ended July 31, 2026. “We closed a great fourth quarter, capping off an incredible year of expanding demand,” said Mike Rosenbaum, chief executive officer, Guidewire. “Customers are deepening their commitments to Guidewire’s core offerings and expanding with new pricing and AI focused products. AI is driving our momentum, as more of our insurance customers choose to align their AI transformation with Guidewire.” “Strong execution in fiscal year 2026 was visible in record sales activity and in the lowest ARR gross attrition rate since we started measuring ARR,” said Jeff Cooper, chief financial officer, Guidewire. “In fiscal year 2026, we delivered growth rates of 19% for ARR, 22% for fully ramped ARR, and 23% for total revenue, while strong operational discipline led to cash flow from operations margin of 26%.” Fiscal Year 2026 Financial Highlights Revenue Total revenue for fiscal year 2026 was $1,475.4 million, an increase of 23% from fiscal year 2025. Subscription and support revenue was $970.9 million, an increase of 33%; license revenue was $234.6 million, a decrease of 7%; and services revenue was $269.9 million, an increase of 23%, each compared to fiscal year 2025. As of July 31, 2026, annual recurring revenue, or ARR, was $1,242 million based on currency exchange rates as of July 31, 2025, compared to $1,041 million as of July 31, 2025. ARR grew in fiscal year 2026 by 19% on a constant currency basis. We measure ARR results on a constant currency basis during the fiscal year and revalue ARR at year end to current currency exchange rates and, based on this revaluation to currency exchange rates as of July 31, 2026, ARR was $1,237 million. As of July 31, 2026, fully ramped annual recurring revenue, or fully ramped ARR, was $1,578 million based on currency exchange rates as of July 31, 2025, compared to $1,296 million as of July 31, 2025. Fully ramped ARR grew in fiscal year 2026 by 22% on a constant currency basis. When revalued to currency exchange rates as of July 31, 2026, fully ramped ARR was $1,573 million. Profitability GAAP income from operations was $149.9 million for fiscal year 2026, compared with $41.1 million for fiscal year 2025. Non-GAAP income from operations was $339.9 million for fiscal year 2026, compared with $208.2 million for fiscal year 2025. GAAP net income was $139.3 million for fiscal year 2026, compared with $69.8 million for fiscal year 2025. GAAP net income was negatively impacted by a foreign currency loss of $22.5 million during fiscal year 2026, compared to a foreign currency gain of $16.7 million during fiscal year 2025 due to fluctuations in foreign exchange rates. GAAP diluted net income per share was $1.63 for fiscal year 2026, based on diluted weighted average shares outstanding of 85.4 million, compared with $0.81 for fiscal year 2025, based on diluted weighted average shares outstanding of 85.9 million. Non-GAAP net income was $293.0 million for fiscal year 2026, compared with $215.1 million for fiscal year 2025. Non-GAAP diluted net income per share was $3.43 for fiscal year 2026, based on diluted weighted average shares outstanding of 85.4 million, compared with non-GAAP diluted net income per share of $2.51 for fiscal year 2025, based on diluted weighted average shares outstanding of 85.9 million. Liquidity and Capital Resources Guidewire had $1,215.3 million in cash, cash equivalents, and investments at July 31, 2026, compared to $1,483.2 million at July 31, 2025. Guidewire generated $389.7 million in cash from operations during the fiscal year ended July 31, 2026, compared to $300.9 million during the fiscal year ended July 31, 2025. Guidewire repurchased 4,085,350 shares of common stock at an average price of $148.41 during the fiscal year ended July 31, 2026, for an aggregate purchase price of $606.3 million. As of July 31, 2026, $31.9 million remained available for purchases under the share repurchase program. Fourth Quarter Fiscal Year 2026 Financial Highlights Revenue Total revenue for the fourth quarter of fiscal year 2026 was $411.1 million, an increase of 15% from the same quarter in fiscal year 2025. Subscription and support revenue was $266.7 million, an increase of 32%; license revenue was $77.1 million, a decrease of 18%; and services revenue was $67.3 million, an increase of 10%, each as compared to the same quarter in fiscal year 2025. Profitability GAAP income from operations was $62.3 million for the fourth quarter of fiscal year 2026, compared with $29.6 million for the same quarter in fiscal year 2025. Non-GAAP income from operations was $111.3 million for the fourth quarter of fiscal year 2026, compared with $73.5 million for the same quarter in fiscal year 2025. GAAP net income was $31.4 million for the fourth quarter of fiscal year 2026, compared with $52.0 million for the same quarter in fiscal year 2025. GAAP net income per share was $0.38, based on diluted weighted average shares outstanding of 83.6 million, compared with $0.60 for the same quarter in fiscal year 2025, based on diluted weighted average shares outstanding of 86.3 million. GAAP net income was negatively impacted by a foreign currency loss of $24.0 million during the fourth quarter of fiscal year 2026, compared to a foreign currency gain of $2.8 million during the same quarter in fiscal year 2025 due to fluctuations in foreign exchange rates. Non-GAAP net income was $83.1 million for the fourth quarter of fiscal year 2026, compared with $70.3 million for the same quarter in fiscal year 2025. Non-GAAP net income per share was $0.99, based on diluted weighted average shares outstanding of 83.6 million, compared with $0.81 for the same quarter in fiscal year 2025, based on diluted weighted average shares outstanding of 86.3 million. Business Outlook Guidewire is issuing the following outlook for the first quarter of fiscal year 2027 based on current expectations: Ending ARR between $1,253 million and $1,259 million Subscription and support revenue between $279 million and $283 million Total revenue between $372 million and $378 million GAAP operating income between $19 million and $25 million Non-GAAP operating income between $64 million and $70 million Guidewire is issuing the following outlook for fiscal year 2027 based on current expectations: Ending ARR between $1,450 million and $1,460 million Subscription and support revenue between $1,240 million and $1,246 million Total revenue between $1,707 million and $1,727 million GAAP operating income between $197 million and $217 million Non-GAAP operating income between $403 million and $423 million Operating cash flow between $445 million and $465 million Conference Call Information What: Guidewire Fourth Quarter and Fiscal Year 2026 Financial Results Conference Call When: Thursday, September 3, 2026 Time: 2:00 p.m. PT (5:00 p.m. ET) Dial-In: (669) 444-9171 Meeting ID: 922 3947 8049 Password: 515703 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. A quarterly earnings supplemental presentation providing additional information and analysis can be found on our investor relations website (www.guidewire.com). 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), non-GAAP net income (loss) per share, and non-GAAP tax provision (benefit) also exclude the amortization of debt issuance costs from our convertible senior notes, changes in fair value of strategic investments, (gains) losses on sale of strategic investments, retirement of debt, unrealized foreign exchange rate (gains) losses, and related tax effects of the non-GAAP adjustments. 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. All prior period non-GAAP measures presented herein have been recast to exclude unrealized foreign currency exchange rate impacts, consistent with the methodology change adopted in the third quarter of fiscal year 2026. 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 generally only impacts the initial term of the contract. This means that if we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value would be recognized as services revenue, but our reported ARR amount would not be impacted. During the fiscal year ended July 31, 2026, the recurring license and support or subscription contract value recognized as services revenue was $7.2 million. Fully ramped annual recurring revenue (“fully ramped ARR”) is used to quantify the annualized recurring value outlined in active customer contracts including all non-variable price increases outlined in the pricing schedule of an executed customer contract within the first five years. 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 Guidewire’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. More than 570 insurers in 44 countries, from new ventures to the largest and most complex in the world, rely on Guidewire products. With core systems leveraging data and analytics, digital, and artificial intelligence, Guidewire defines cloud platform excellence for P&C insurers. We are proud of our unparalleled implementation record, with 1700+ successful projects supported by the industry’s largest R&D team and consulting partner ecosystem. Our marketplace represents the largest partner community in P&C, where customers can access hundreds of applications to accelerate integration, localization, and innovation. Guidewire uses its Investor Relations website (ir.guidewire.com), X feed (@Guidewire_PandC), and LinkedIn page (www.linkedin.com/company/guidewire-software) as a means of disclosing information about the company and for complying with its disclosure obligations under Regulation FD. The information that is posted through these channels may be deemed material. Accordingly, investors should monitor these channels in addition to Guidewire’s press releases, filings with the Securities and Exchange Commission, public conference calls, and webcasts. 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, business and product strategies, expectations regarding customer demand, market opportunities, and sales momentum. 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 (the “SEC”) as well as other documents that may be filed by Guidewire from time to time with the SEC. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: fluctuations in our quarterly and annual operating results; our reliance on sales to, and renewals from, a relatively small number of large customers and the related substantial negotiating leverage of these customers; the length and complexity of our sales, product development, and implementation cycles; our competitive environment and changes thereto; our ability to effectively manage international expansion; issues in the development, adoption, deployment, workforce use and maintenance of artificial intelligence (“AI”) and machine learning technologies combined with an uncertain and evolving regulatory environment; long-term pricing commitments made in our customer contracts based on available information; our ability to expand adoption of our cloud-based products and services, and the risk that any of our established products may fail to satisfy customer demands or maintain market acceptance; the impact of seasonal and other variations related to our customer agreements and revenue recognition on our results of operations, ARR, and cash flows; our ability to develop, introduce, and market new and enhanced versions of our products and services; our ability to retain existing and hire new personnel, including managing a hybrid and geographically distributed workforce; errors or failures in our products or services, as well as service interruptions or failure of the third-party service providers we rely on; our dependence on the quality of our professional services and third-party global system integrator partners to sell our products and services; the impact of changes in our revenue mix, and the realization of lower gross margins from our services, subscription, and support revenues compared to our license revenue; the impact of global events (including, without limitation, macroeconomic and geopolitical conditions, ongoing global conflicts, inflation, high interest rates, and general economic volatility); data security breaches of our cloud-based services and products or unauthorized access to our employees’ or our customers’ data; the impact of evolving regulations and laws (including, without limitation, security, privacy, AI and machine learning, tax regulations and laws, and accounting standards); assertions by third parties that we violate their intellectual property rights; stock price volatility regardless of our operating performance; 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) July 31, 2026 July 31, 2025 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 372,887 $ 697,902 Short-term investments 380,175 451,541 Accounts receivable, net 193,720 140,639 Unbilled accounts receivable, net 140,832 130,959 Prepaid expenses and other current assets 99,363 86,374 Total current assets 1,186,977 1,507,415 Long-term investments 462,223 333,754 Unbilled accounts receivable, net — 670 Property and equipment, net 67,800 60,436 Operating lease assets 34,404 39,309 Intangible assets, net 16,406 12,042 Goodwill 423,267 393,978 Deferred tax assets, net 286,585 297,234 Other assets 99,283 76,261 TOTAL ASSETS $ 2,576,946 $ 2,721,099 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 38,074 $ 28,797 Accrued employee compensation 146,331 140,613 Deferred revenue, net 437,181 340,253 Other current liabilities 42,911 35,139 Total current liabilities 664,497 544,802 Lease liabilities 25,206 30,687 Convertible senior notes, net 678,094 674,568 Deferred revenue, net 1,633 4,533 Other liabilities 13,828 9,279 Total liabilities 1,383,258 1,263,869 STOCKHOLDERS’ EQUITY: Common stock 8 8 Additional paid-in capital 2,230,308 2,020,393 Accumulated other comprehensive income (loss) (12,233 ) (8,922 ) Retained earnings (accumulated deficit) (1,024,396 ) (554,249 ) Total stockholders’ equity 1,193,687 1,457,230 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 2,576,946 $ 2,721,099 GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands except share and per share data) Three Months Ended July 31, Twelve Months Ended July 31, 2026 2025 2026 2025 Revenue: Subscription and support $ 266,735 $ 201,893 $ 970,885 $ 731,296 License 77,086 93,638 234,578 251,935 Services 67,266 61,039 269,900 219,228 Total revenue 411,088 356,570 1,475,363 1,202,459 Cost of revenue(1): Subscription and support 69,466 64,575 265,203 235,106 License 522 909 1,982 3,624 Services 71,420 59,275 260,810 211,676 Total cost of revenue 141,408 124,759 527,995 450,406 Gross profit: Subscription and support 197,269 137,318 705,682 496,190 License 76,564 92,729 232,596 248,311 Services (4,154 ) 1,764 9,090 7,552 Total gross profit 269,679 231,811 947,368 752,053 Operating expenses(1): Research and development 90,587 84,097 340,097 296,160 Sales and marketing 65,003 65,648 258,937 230,346 General and administrative 51,771 52,469 198,460 184,479 Total operating expenses 207,361 202,214 797,494 710,985 Income (loss) from operations 62,318 29,597 149,874 41,068 Interest income 10,132 13,503 48,564 56,625 Interest expense (3,360 ) (3,298 ) (13,324 ) (13,211 ) Other income (expense), net (23,788 ) 1,183 (20,997 ) (35,087 ) Income (loss) before provision for (benefit from) income taxes 45,303 40,985 164,117 49,395 Provision for (benefit from) income taxes 13,908 (10,966 ) 24,834 (20,409 ) Net income (loss) $ 31,395 $ 51,951 $ 139,283 $ 69,804 Net income (loss) per share: Basic $ 0.38 $ 0.62 $ 1.65 $ 0.83 Diluted $ 0.38 $ 0.60 $ 1.63 $ 0.81 Shares used in computing net income (loss) per share: Basic 82,870,116 84,366,889 84,186,951 83,846,793 Diluted 83,620,224 86,267,658 85,405,177 85,911,653 (1)Amounts include stock-based compensation expense as follows: Three Months Ended July 31, Twelve Months Ended July 31, 2026 2025 2026 2025 Stock-based compensation expense: Cost of subscription and support revenue $ 3,377 $ 3,442 $ 13,814 $ 13,953 Cost of license revenue — 32 — 136 Cost of services revenue 6,380 5,541 24,583 20,759 Research and development 12,784 11,200 49,061 41,760 Sales and marketing 11,706 11,870 46,720 43,270 General and administrative 12,537 10,106 47,622 41,678 Total stock-based compensation expense $ 46,784 $ 42,191 $ 181,799 $ 161,556 GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Three Months Ended July 31, Twelve Months Ended July 31, 2026 2025 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 31,395 $ 51,951 $ 139,283 $ 69,804 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 7,320 6,220 27,952 23,758 Amortization of debt issuance costs 992 976 3,939 3,758 Amortization of contract costs 9,199 8,375 35,011 30,893 Stock-based compensation 46,784 42,191 181,799 161,556 Changes to allowance for credit losses and revenue reserves (26 ) (581 ) 2,516 526 Deferred income tax 8,059 (15,929 ) 8,981 (31,780 ) Amortization of premium (accretion of discount) on available-for-sale securities, net (877 ) (1,713 ) (6,254 ) (10,326 ) (Gains) losses on sale of strategic investments — — (632 ) (3,671 ) Changes in fair value of strategic investments 65 1,789 (489 ) 2,130 Loss on retirement of debt — — — 53,565 Other non-cash items affecting net income (loss) (106 ) 130 (88 ) 186 Changes in operating assets and liabilities: Accounts receivable (55,144 ) 7,261 (54,868 ) (3,348 ) Unbilled accounts receivable 84,021 35,541 (9,193 ) (38,930 ) Prepaid expenses and other assets (21,539 ) (28,749 ) (55,354 ) (58,054 ) Operating lease assets 2,039 2,458 4,905 4,441 Accounts payable 3,802 (2,190 ) 11,712 11,399 Accrued employee compensation 29,774 50,690 6,196 30,090 Deferred revenue 134,456 81,493 93,675 56,617 Lease liabilities (660 ) (1,770 ) (4,232 ) (2,891 ) Other liabilities 4,332 6,688 4,857 1,144 Net cash provided by (used in) operating activities 283,886 244,831 389,716 300,867 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale securities (214,235 ) (186,241 ) (859,150 ) (858,571 ) Maturities and sales of available-for-sale securities 223,411 135,125 806,049 665,012 Purchases of property and equipment (2,122 ) (3,405 ) (12,056 ) (5,741 ) Capitalized software development costs (5,064 ) (3,742 ) (19,003 ) (14,714 ) Acquisition of strategic investments (55 ) — (14,646 ) (1,772 ) Sale of strategic investments — — 781 5,671 Acquisition of businesses, net of acquired cash (4,500 ) (127 ) (37,953 ) (26,850 ) Net cash provided by (used in) investing activities (2,565 ) (58,390 ) (135,977 ) (236,965 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of convertible senior notes, net of issuance costs — — — 671,840 Payment for the retirement of convertible senior notes — — — (353,535 ) Payment for the maturity of convertible senior notes — — — (179,061 ) Purchase of capped calls — — — (58,788 ) Payment of revolving credit facility costs — — — (2,065 ) Proceeds from issuance of common stock under employee stock purchase plan 13,239 — 26,603 — Proceeds from issuance of common stock upon exercise of stock options 190 728 729 3,902 Repurchase and retirement of common stock (213,862 ) — (606,309 ) — Net cash provided by (used in) financing activities (200,433 ) 728 (578,977 ) 82,293 Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash (2,635 ) 412 (969 ) 3,715 NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 78,252 187,581 (326,207 ) 149,910 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period 294,634 511,513 699,094 549,184 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period $ 372,887 $ 699,094 $ 372,887 $ 699,094 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 July 31, Twelve Months Ended July 31, 2026 2025 2026 2025 Gross profit reconciliation: GAAP gross profit $ 269,679 $ 231,811 $ 947,368 $ 752,053 Non-GAAP adjustments: Stock-based compensation 9,757 9,015 38,396 34,848 Amortization of intangibles 1,187 800 4,232 2,255 Non-GAAP gross profit $ 280,623 $ 241,626 $ 989,996 $ 789,156 Income (loss) from operations reconciliation: GAAP income (loss) from operations $ 62,318 $ 29,597 $ 149,874 $ 41,068 Non-GAAP adjustments: Stock-based compensation 46,784 42,191 181,799 161,556 Amortization of intangibles 1,733 1,565 6,701 5,444 Acquisition consideration holdback 445 177 1,510 177 Non-GAAP income (loss) from operations $ 111,280 $ 73,530 $ 339,884 $ 208,245 Net income (loss) reconciliation: GAAP net income (loss) $ 31,395 $ 51,951 $ 139,283 $ 69,804 Non-GAAP adjustments: Stock-based compensation 46,784 42,191 181,799 161,556 Amortization of intangibles 1,733 1,565 6,701 5,444 Acquisition consideration holdback 445 177 1,510 177 Amortization of debt issuance costs 992 976 3,939 3,758 Changes in fair value of strategic investments 64 1,789 (489 ) 2,130 (Gains) losses on sale of strategic investments — — (632 ) (3,671 ) Retirement of debt — — — 53,565 Unrealized foreign exchange rate (gains) losses(1) 23,975 (2,776 ) 22,462 (16,743 ) Tax impact of non-GAAP adjustments (22,244 ) (25,572 ) (61,541 ) (60,902 ) Non-GAAP net income (loss) $ 83,143 $ 70,301 $ 293,031 $ 215,118 Tax provision (benefit) reconciliation: GAAP tax provision (benefit) $ 13,908 $ (10,966 ) $ 24,834 $ (20,409 ) Non-GAAP adjustments: Stock-based compensation 14,178 7,258 40,332 25,368 Amortization of intangibles 525 269 1,488 855 Acquisition consideration holdback 135 30 341 30 Amortization of debt issuance costs 300 168 871 594 Changes in fair value of strategic investments 19 308 (90 ) 359 (Gains) losses on sale of strategic investments — — (125 ) (520 ) Retirement of debt — — — 7,585 Unrealized foreign exchange rate (gains) losses(1) 7,266 (478 ) 7,113 (3,488 ) Tax impact of non-GAAP adjustments (179 ) 18,016 11,610 30,119 Non-GAAP tax provision (benefit) $ 36,153 $ 14,606 $ 86,375 $ 40,493 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 July 31, Twelve Months Ended July 31, 2026 2025 2026 2025 Net income (loss) per share reconciliation: GAAP net income (loss) per share – diluted $ 0.38 $ 0.60 $ 1.63 $ 0.81 Non-GAAP adjustments: Stock-based compensation 0.56 0.49 2.13 1.89 Amortization of intangibles 0.02 0.02 0.08 0.06 Acquisition consideration holdback 0.01 — 0.01 — Amortization of debt issuance costs 0.01 0.01 0.05 0.04 Changes in fair value of strategic investments — 0.02 (0.01 ) 0.02 (Gains) losses on sale of strategic investments — — (0.01 ) (0.04 ) Retirement of debt — — — 0.63 Unrealized foreign exchange rate (gains) losses(1) 0.29 (0.03 ) 0.26 (0.19 ) Tax impact of non-GAAP adjustments (0.27 ) (0.30 ) (0.72 ) (0.71 ) Non-GAAP net income (loss) per share – diluted $ 0.99 $ 0.81 $ 3.43 $ 2.51 Shares used in computing non-GAAP net income (loss) per share amounts: GAAP and pro forma weighted average shares — diluted 83,620,224 86,267,658 85,405,177 85,911,653 (1) During the third quarter of fiscal year 2026, we began excluding unrealized foreign currency exchange rate (gains) losses as a non-GAAP adjustment to other income (expense), net. Accordingly, we have recast previously reported amounts in our non-GAAP schedules. The following table summarizes our free cash flow for the periods indicated below: Three Months Ended July 31, Twelve Months Ended July 31, 2026 2025 2026 2025 Free cash flow: Net cash provided by (used in) operating activities $ 283,886 $ 244,831 $ 389,716 $ 300,867 Purchases of property and equipment (2,122 ) (3,405 ) (12,056 ) (5,741 ) Capitalized software development costs (5,064 ) (3,742 ) (19,003 ) (14,714 ) Free cash flow $ 276,700 $ 237,684 $ 358,657 $ 280,412 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): First Quarter Fiscal Year 2027 Fiscal Year 2027 Income (loss) from operations outlook reconciliation: GAAP income (loss) from operations $19 — $25 $197 — $217 Non-GAAP adjustments: Stock-based compensation 44 — 44 202 — 202 Amortization of intangibles & other 2 — 2 4 — 4 Non-GAAP income (loss) from operations $64 — $70 $403 — $423 Certain figures included in this document have been subjected to rounding adjustments. Accordingly, figures shown as totals in certain tables above may not be an arithmetic aggregation of the figures that precede them. View source version on businesswire.com: https://www.businesswire.com/news/home/20260903521886/en/ Source: Guidewire Print Print RSS Feeds E-mail Alerts E-mail Alerts IR Contacts IR Contacts Email Page Email Page