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Guidewire(GWRE) - 2025 Q3 - Earnings Call Transcript
GWREGuidewire(GWRE)2025-06-03 22:00

Financial Data and Key Metrics Changes - The company reported total revenue of 294million,representinga22294 million, representing a 22% year-over-year increase, exceeding the high end of expectations [21] - Subscription and support revenue reached 182 million, reflecting a 32% year-over-year growth [21] - Annual Recurring Revenue (ARR) finished at 960million,allowingthecompanytoraiseitsfull−yearoutlook[20][27]BusinessLineDataandKeyMetricsChanges−Thecompanyclosed17clouddealsinQ3,including14forInsuranceSuiteapplicationsand3forInsuranceNow,indicatingstrongsalesactivity[7]−ThecompanysecureditsfirstGuidewireIndustryIntelligencesale,apredictivemodelembeddedinClaimCenter,markingprogressindataandanalyticsofferings[11]MarketDataandKeyMetricsChanges−Thecompanyexperiencedsignificantinternationalmomentum,withcloudexpansionsinCanadaandwinsinAPACandEMEA[9]−Thecompanyannounceda960 million, allowing the company to raise its full-year outlook [20][27] Business Line Data and Key Metrics Changes - The company closed 17 cloud deals in Q3, including 14 for InsuranceSuite applications and 3 for InsuranceNow, indicating strong sales activity [7] - The company secured its first Guidewire Industry Intelligence sale, a predictive model embedded in ClaimCenter, marking progress in data and analytics offerings [11] Market Data and Key Metrics Changes - The company experienced significant international momentum, with cloud expansions in Canada and wins in APAC and EMEA [9] - The company announced a 60 million investment in Japan over the next five years to enhance local operations and partnerships [14] Company Strategy and Development Direction - The company aims to continue driving growth through its Guidewire Cloud Platform, which is recognized for its flexibility and agility [6] - The acquisition of Quanti is expected to enhance the company's pricing and rating technology, contributing to its long-term product strategy [18][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining upper teens growth for fully ramped ARR, emphasizing the importance of Q4 for closing large deals [34][35] - The company is committed to the Japanese market, focusing on long-term relationships and investments to support local insurers [38][39] Other Important Information - The company ended the quarter with over 1.2billionincashandcashequivalents,withoperatingcashflowat1.2 billion in cash and cash equivalents, with operating cash flow at 32 million [26] - The company raised its ARR outlook for fiscal year 2025 to between 1.012billionand1.012 billion and 1.022 billion, reflecting a growth of 17% to 18% year-over-year [27] Q&A Session Summary Question: What is the fully ramped ARR outlook for this year? - Management indicated strong momentum and confidence in maintaining upper teens growth for fully ramped ARR, with Q4 being critical for large commitments [34][35] Question: What is helping the company win cloud deals in Japan? - The company highlighted its long-term commitment to the Japanese market and the importance of delivering a robust platform tailored to local needs [36][39] Question: Was there any pull forward from Q4 due to Q3 outperformance? - Management clarified that the strong Q3 performance was due to high close rates and execution, with no significant pull forward from Q4 [44][50] Question: How is the company addressing the widening coverage gap in the insurance industry? - The company emphasized agility in product structuring and pricing, enabling insurers to respond quickly to market needs and close coverage gaps [58][60] Question: What is the incremental functionality from the Quanti acquisition? - The acquisition is expected to enhance pricing and rating capabilities, providing flexibility for insurers to adjust rates and strategies in real-time [91][92]