Guidewire (GWRE) Q3 Earnings & Revenues Beat Estimates, Up Y/Y
Guidewire Software GWRE reported non-GAAP earnings per share (EPS) of 74 cents in fourth-quarter fiscal 2023 (ended Jul 31), which surpassed the Zacks Consensus Estimate of 34 cents and year-ago quarter’s non-GAAP earnings of 3 cents.
The company reported revenues of $270 million, rising 10% year over year and surpassing the Zacks Consensus Estimate by 3.4%.
Guidewire Cloud continued to gain momentum in the reported quarter with 17 deal wins.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. Quote
Quarter in Detail
Subscription and support segment’s revenues (43.5% of total revenues) soared 25.4% from the year-ago quarter to $117.3 million, owing to higher subscription revenues. Subscription revenues gained 34.7% year over year to $98.1 million. Support revenues declined 7.1% year over year to $19.3 million.
License’s revenues (37.4%) were down 6% year over year to $100.9 million.
Services’ revenues (19.1%) fell 8.1% year over year to $51.7 million.
Annual recurring revenues (ARR) were $763 million as of Jul 31, up 15% (rose 15% on a constant currency basis) year over year.
Non-GAAP gross margin expanded 950 basis points on a year-over-year basis to 64%.
Subscription and support segment’s gross margin increased 10.6% on a year-over-year basis to 57.8% due to increased cloud infrastructure efficiency. Services’ non-GAAP gross margin was 10.5% against a gross margin of (6.4)% in the year-ago reported quarter.
Total operating expenses increased 1.8% year over year to $157.5 million. Non-GAAP operating income was $44.7 million compared with $5.3 million reported in the year-ago quarter.
Financial Details
As of Jul 31, cash and cash equivalents and short-term investments were $798.7 million compared with $806.9 million on Apr 30, 2023.
Guidewire generated $173.2 million in cash from operations during the quarter under review, with free cash flow of nearly $167.3 million.
Outlook
For first-quarter fiscal 2024, revenues are expected to be in the range of $197-$202 million. ARR is projected to be between $766 million and $769 million. Non-GAAP operating loss is estimated to be between $20 million and $25 million.
For fiscal 2024, the company expects total revenues between $976 million and $986 million. ARR is projected to be in the range of $846-$858 million.
Non-GAAP operating income (loss) is estimated to be between $(62) million and $72 million. Cash flow from operations is anticipated to be in the range of $95-$125 million.
Zacks Rank & Other Stocks to Consider
Guidewire currently carries a Zacks Rank #2 (Buy)
Some other top-ranked stocks in the broader technology space are Woodward WWD, Aspen Technology AZPN and Badger Meter BMI. Woodward and Aspen Technology presently sport a Zacks Rank #1 (Strong Buy), whereas Badger Meter currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 15.9% in the past 60 days to $4.15.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 37.6% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 5.8% in the past 60 days to $6.58.
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 12.6% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 6.3% in the past 60 days to $2.86.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 69.5% in the past year.
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Guidewire Software, Inc. (GWRE) : Free Stock Analysis Report
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Aspen Technology, Inc. (AZPN) : Free Stock Analysis Report
