Guidewire Revenue Growth Slowed to 15% in Fourth Quarter
The insurance-software platform posted $411.1 million of fourth-quarter revenue and guided first-quarter fiscal 2027 sales to $372 million to $378 million.
Guidewire Software (GWRE) reported fourth-quarter revenue of $411.1 million, up 15% from a year earlier, a slower year-over-year pace than the 27% increase in the third quarter and the 24% increase in the second quarter.
The insurance-software company said the slowdown capped a year of expanding demand, with customers deepening commitments to core offerings and adding pricing and AI-focused products. Chief Executive Mike Rosenbaum said AI was driving momentum as insurance customers aligned their AI transformation with Guidewire.
Subscription and support revenue was $266.7 million, up 32% from a year earlier, after 35% growth in the third quarter. License revenue was $77.1 million, down 18%, after a 2% decline in the third quarter. Services revenue was $67.3 million, up 10%, after 32% growth in the third quarter.
Annual recurring revenue ended the year at $1,242 million on a constant-currency basis, up 19% from $1,041 million a year earlier, matching the third-quarter constant-currency growth rate after 22% growth in the second quarter. Fully ramped ARR ended the year at $1,578 million on a constant-currency basis, up 22% from $1,296 million a year earlier.
GAAP income from operations was $62.3 million in the fourth quarter, compared with $29.6 million a year earlier. Non-GAAP income from operations was $111.3 million, compared with $73.5 million.
GAAP net income fell to $31.4 million from $52.0 million a year earlier, including a $24.0 million foreign-currency loss versus a $2.8 million gain in the year-earlier quarter. Non-GAAP net income was $83.1 million, compared with $70.3 million. Non-GAAP diluted earnings were $0.99 a share, versus $0.81 a year earlier.
Cash from operations was $283.9 million in the fourth quarter, up from $244.8 million a year earlier. Free cash flow was $276.7 million, up from $237.7 million.
Deferred revenue, net, was $437.2 million at July 31, 2026, compared with $340.3 million a year earlier. Cash, cash equivalents, and investments were $1,215.3 million at year-end, down from $1,483.2 million a year earlier.
For the full year ended July 31, 2026, total revenue was $1,475.4 million, up 23% from fiscal 2025. Subscription and support revenue was $970.9 million, up 33%; license revenue was $234.6 million, down 7%; and services revenue was $269.9 million, up 23%. GAAP income from operations was $149.9 million, compared with $41.1 million. Non-GAAP income from operations was $339.9 million, compared with $208.2 million. GAAP net income was $139.3 million, or $1.63 a share, compared with $69.8 million, or $0.81 a share. Non-GAAP net income was $293.0 million, or $3.43 a share. Cash from operations was $389.7 million.
Guidewire said it repurchased 4,085,350 shares at an average price of $148.41 during fiscal 2026 for $606.3 million, with $31.9 million remaining under the buyback authorization at year-end.
The company is issuing a first-quarter fiscal 2027 outlook of total revenue between $372 million and $378 million, subscription and support revenue between $279 million and $283 million, ending ARR between $1,253 million and $1,259 million, GAAP operating income between $19 million and $25 million, and non-GAAP operating income between $64 million and $70 million.
For fiscal 2027, Guidewire is guiding to 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, and operating cash flow between $445 million and $465 million.