Guidewire Software (GWRE) GWRE Q4 Financial Results Summary
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Guidewire (GWRE) Q4 2026: Revenue Growth Continues, Profitability Mixed — Cautiously Optimistic
Guidewire (NYSE: GWRE) reported its fourth quarter and fiscal year 2026 financial results, showcasing a solid year of growth despite some mixed profitability indicators. The company achieved total revenue of $411.1 million for Q4 2026, reflecting an increase of $54.6 million or 15% compared to the same quarter in fiscal year 2025. This growth is part of a broader trend, as total revenue for the fiscal year reached $1,475.4 million, up $273.4 million or 23% from fiscal year 2025.
Key Financial Metrics
- Q4 2026 Total Revenue: $411.1 million (+15% YoY)
- Fiscal Year 2026 Total Revenue: $1,475.4 million (+23% YoY)
- Q4 2026 Subscription and Support Revenue: $266.7 million (+32% YoY)
- Q4 2026 License Revenue: $77.1 million (-18% YoY)
- Q4 2026 Services Revenue: $67.3 million (+10% YoY)
- GAAP Net Income Q4 2026: $31.4 million (compared to $52.0 million in Q4 2025)
- GAAP Diluted Net Income per Share Q4 2026: $0.38 (compared to $0.60 in Q4 2025)
- Non-GAAP Net Income Q4 2026: $83.1 million (compared to $70.3 million in Q4 2025)
- Non-GAAP Diluted Net Income per Share Q4 2026: $0.99 (compared to $0.81 in Q4 2025)
Analyst View
This quarter presents a mixed bag for shareholders. On one hand, the revenue growth is commendable, particularly in subscription and support revenue, which surged by 32%. However, the decline in license revenue by 18% raises concerns about the company's ability to maintain its competitive edge in that segment. Additionally, while GAAP net income decreased to $31.4 million, primarily due to a foreign currency loss of $24.0 million, non-GAAP metrics show improvement, indicating operational strength.
The company’s annual recurring revenue (ARR) also saw significant growth, reaching $1,242 million, up 19% from the previous year. This is a positive indicator of long-term stability and customer commitment, especially as more clients adopt AI-driven solutions.
Shareholder Returns and Guidance
Guidewire repurchased 4,085,350 shares at an average price of $148.41, totaling $606.3 million during the fiscal year. As of July 31, 2026, $31.9 million remains available for further share repurchases.
Looking ahead, Guidewire has provided guidance for the first quarter of fiscal year 2027, projecting:
- 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
For the full fiscal year 2027, the company anticipates:
- Ending ARR: Between $1,450 million and $1,460 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
Forward Catalysts
Investors should closely monitor Guidewire's ability to stabilize its license revenue and the impact of foreign currency fluctuations on profitability. Additionally, the upcoming quarter's performance in subscription and support revenue will be crucial, especially as the company continues to leverage AI in its offerings. The guidance provided indicates a cautious optimism, but execution will be key to maintaining investor confidence.
In summary, while the revenue growth is encouraging, the mixed profitability results and the decline in license revenue warrant a careful approach from shareholders as they assess the company's trajectory moving forward.
Note: All amounts in the following tables are in thousands.
| Three Months Ended July 31, 2026 | Three Months Ended July 31, 2025 | Twelve Months Ended July 31, 2026 | Twelve Months Ended July 31, 2025 | |
|---|---|---|---|---|
| Subscription and Support Revenue | $266,737 | $201,820 | $970,849 | $731,296 |
| License Revenue | $77,086 | $93,638 | $234,548 | $251,935 |
| Services Revenue | $67,266 | $61,039 | $269,920 | $219,228 |
| Total Revenue | $411,089 | $356,497 | $1,475,317 | $1,202,459 |
| Cost of Revenue: Subscription and Support Revenue | $69,466 | $64,575 | $265,200 | $235,106 |
| Cost of Revenue: License Revenue | $522 | $909 | $1,982 | $3,624 |
| Cost of Revenue: Services Revenue | $71,420 | $59,275 | $260,849 | $211,676 |
| Total Cost of Revenue | $141,408 | $124,759 | $527,031 | $450,406 |
| Gross Profit: Subscription and Support Revenue | $197,271 | $137,245 | $705,649 | $496,190 |
| Gross Profit: License Revenue | $76,564 | $92,729 | $232,566 | $248,311 |
| Gross Profit: Services Revenue | $-4,154 | $1,764 | $9,090 | $7,552 |
| Total Gross Profit | $269,681 | $231,738 | $947,305 | $752,053 |
| Operating Expenses: Research and Development Expenses | $90,587 | $84,097 | $340,015 | $296,160 |
| Operating Expenses: Sales and Marketing | $65,003 | $65,648 | $258,972 | $230,346 |
| Operating Expenses: General and Administrative | $51,771 | $52,469 | $198,412 | $184,479 |
| Total Operating Expenses | $207,361 | $202,214 | $797,399 | $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 | $-13,329 | $-13,211 |
| Other Income (Expense), Net | $-23,735 | $1,183 | $-20,929 | $-35,087 |
| Income (Loss) before Provision for Income Taxes | $45,303 | $40,985 | $164,110 | $49,395 |
| Provision for 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 |
| Net Income (Loss) per Share: Diluted | $0.38 | $0.60 | $1.63 | $0.81 |
| Shares Used in Computation of Net Income (Loss) per Share: Basic | 82,874 | 84,369 | 84,181 | 83,846 |
Shares Used in Computation of Net Income (Loss) per Share:
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