Guidewire's Q2 Earnings Miss Estimates, Revenues Increase Y/Y

Guidewire Software, Inc GWRE reported non-GAAP earnings per share of 51 cents for second-quarter fiscal 2025 (ended Jan. 31, 2025), up 11% year over year. However, the figure missed the Zacks Consensus Estimate by 1.9%. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The company reported revenues of $289.5 million, up 20% year over year. Revenues surpassed the Zacks Consensus Estimate by 1.3%. The figure also came ahead of the company’s guided range of $282-$288 million. This uptick was driven by solid performance in North America and Europe.Guidewire Cloud continued to gain momentum in the reported quarter with 12 deal wins. Out of these deals, four were for InsuranceSuite Cloud, one InsuranceNow deal and the remainder were for one or two core X Center applications.As of Jan. 31, annual recurring revenues (ARR) were $918.1 million, up 6.3% year over year. GWRE now expects ARR for fiscal 2025 to be in the range of $1 billion to $1.01 billion (previous projection: $995-$1,005 million).Guidewire Software, Inc. Price, Consensus and EPS Surprise Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. QuoteDriven by strong revenue performance in the fiscal second quarter, GWRE expects total revenues for fiscal 2025 to be between $1.164 billion and $1.174 billion compared with earlier guidance of $1.155 billion and $1.167 billion. Subscription revenues are now forecasted to be $653 million, while subscription and support revenues are expected to be $718 million. Services revenues are expected to be approximately $210 million. Non-GAAP operating income is estimated to be between $175 million and $185 million compared with $164-$176 million expected previously. Cash flow from operations is now anticipated to be in the range of $230-$260 million (earlier range: $220-$250 million). Following the results, shares are up 0.3% in the pre-market trading session today. In the past year, shares of the company have gained 59% compared with the Internet Software industry’s growth of 15.6%.Image Source: Zacks Investment ResearchGWRE’s Fiscal Q2 in DetailsThe subscription and support segment’s revenues (61.4% of total revenues) soared 35% from the year-ago quarter's level to $177.8 million.License’s revenues (22%) were down 10% year over year to $63.7 million. Services’ revenues (16.6%) jumped 26% year over year to $47.9 million.Non-GAAP gross margin expanded to 65.2% from 62.7% on a year-over-year basis. The subscription and support segment’s gross margin increased to 69.2% from 65.1% on a year-over-year basis, attributed to higher-than-expected revenues and increases in cloud infrastructure platform efficiency. Services’ non-GAAP gross margin was 6.3% compared with negative 11.2% in the year-ago quarter. Total operating expenses increased 8.1% year over year to $167.4 million. Non-GAAP operating income was $53.9 million compared with $25.7 million in the year-ago quarter.Financial Details of GWREAs of Jan. 31, 2025, cash and cash equivalents and short-term investments were $1,412.4 million compared with $1,480.4 million as of Oct. 31, 2024.GWRE used $86 million in cash from operations in the quarter under review due to annual employee bonuses and commission expenses. Free cash outflow was nearly $82.2 million.GWRE’s Fiscal Q3 OutlookFor the third quarter of fiscal 2025, revenues are expected in the range of $283-$289 million. ARR is anticipated to be between $942 million and $947 million. Non-GAAP operating income is estimated in the range of $36-$42 million.GWRE’s Zacks RankGuidewire currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.Recent Performance of Other Companies in Same SpaceDigital Turbine, Inc. APPS reported third quarter of fiscal 2025 non-GAAP earnings of 13 cents per share, beating the Zacks Consensus Estimate of 3 cents but coming below earnings of 15 cents reported a year ago. Revenues of $134.6 million jumped 13% sequentially but declined 6% year over year.Atlassian Corporation TEAM reported second-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Its non-GAAP earnings per share of 96 cents beat the Zacks Consensus Estimate by 31.5%. The figure jumped 31.5% from the year-ago quarter’s non-GAAP earnings of 73 cents per share, driven by strong top-line growth and disciplined cost management. TEAM’s fiscal second-quarter revenues climbed 21.4% year over year to $1.29 billion and beat the Zacks Consensus Estimate of $1.24 billion by 4.12%. The top line was primarily driven by robust paid seat expansion, cross-selling of additional products, growing ARPU and strong migrations.Zoom Communications Inc’s. ZM fourth-quarter fiscal 2025 adjusted earnings of $1.41 per share beat the Zacks Consensus Estimate by 7.63% but decreased 0.7% year over year. Revenues of $1.184 billion beat the consensus mark by 0.50% and increased 3.29% year over year. Adjusting for foreign currency impact, revenues in constant currency were $1.188 billion, up 3.6% year over year. Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Guidewire Software, Inc. (GWRE): Free Stock Analysis Report Atlassian Corporation PLC (TEAM): Free Stock Analysis Report Digital Turbine, Inc. (APPS): Free Stock Analysis Report Zoom Communications, Inc. (ZM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks