Guidewire Software : CORRECTED TRANSCRIPT Guidewire Software Inc(GWRE US) Q3 2025 Earnings Call 3 June 2025 5 00 PM ET (Corrected and Noted)

Published: 2025-06-04 09:40:30 ET GWRE

Published on 06/04/2025 at 09:40

03-Jun-2025

Guidewire Software, Inc. (GWRE)

Q3 2025 Earnings Call

Alex Hughes

Vice President-Investor Relations, Guidewire Software, Inc.

Mike Rosenbaum

Chief Executive Officer & Director, Guidewire Software, Inc.

Jeff Cooper

Chief Financial Officer, Guidewire Software, Inc.

John Mullen

President & Chief Revenue Officer, Guidewire Software, Inc.

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Alexei Mihaylovich Gogolev

Analyst, JPMorgan Securities LLC

Adam Hotchkiss

Analyst, Goldman Sachs & Co. LLC

Dylan Becker

Analyst, William Blair & Co. LLC

Ken Wong

Analyst, Oppenheimer & Co., Inc.

David Unger

Analyst, Wells Fargo Securities LLC

Aaron Kimson

Analyst, Citizens JMP Securities LLC

Alexander Sklar

Analyst, Raymond James & Associates, Inc.

Matthew Kikkert

Analyst, Stifel, Nicolaus & Co., Inc.

Tyler Radke

Analyst, Citigroup Global Markets, Inc.

Rishi Jaluria

Analyst, RBC Capital Markets LLC

I would now like to turn the call over to Alex Hughes, Vice President of Investor Relations. Thank you, Alex. You may begin.

Alex Hughes

Vice President-Investor Relations, Guidewire Software, Inc.

Thank you, Grace. Hello, everyone. With me today is Mike Rosenbaum, Chief Executive Officer; and Jeff Cooper, Chief Financial Officer as well as John Mullen, President and Chief Revenue Officer, who will be available for the Q&A portion of today's call.

Complete disclosure of our results can be found in our press release issued today as well as in our related Form 8-K furnished to the SEC, both of which are available on the Investor Relations section of our website. Today's call is being recorded and a replay will be available following its conclusion.

Statements today include forward-looking ones regarding our financial results, products, customer demand, operations, the impact of local, national and geopolitical events on our business and other matters. These statements are subject to risks, uncertainties, and assumptions and are based on management's current

expectation as of today and should not be relied upon as representing our views as of any subsequent date. Please refer to the press release and the risk factors and documents we file with the SEC, including our most recent annual report on Form 10-K and our prior and forthcoming quarterly reports on Form 10-Q filed and to be filed with the SEC for information on risks, uncertainties and assumptions that may cause actual results to differ materially from those set forth in such statements.

We also will refer to certain non-GAAP financial measures to provide additional information to investors. All commentary on margins, profitability and expenses are on a non-GAAP basis unless stated otherwise. A reconciliation of non-GAAP to GAAP measures is provided in our press release. Reconciliations and additional data are also posted in the supplement on our IR website.

Finally, similar to last quarter, we're conducting this earnings call via Zoom audio rather than IntelliBridge. This means we'll manage the Q&A portion of today's call internally with the help of Grace who you just heard from and me managing Q&A. Please be patient if we encounter a short pause in any of the handoffs during Q&A.

And with that, I'll now turn it over to Mike.

Mike Rosenbaum

Chief Executive Officer & Director, Guidewire Software, Inc.

Thanks, Alex. Good afternoon, everyone, and thanks for joining us today. Before we get started, I want to take a moment to acknowledge and congratulate the entire Guidewire team for the hard work and exceptional execution that went into delivering another amazing quarter. Our results in Q3 and year-to-date clearly demonstrate the accelerating momentum we're seeing as more insurers recognize how critical it is to have a flexible and agile core system. Guidewire Cloud Platform is now well-established and proven, and we're in an excellent position to continue driving growth, efficiencies, innovation, and better insurance outcomes for our customers.

Let me start by sharing some highlights from the quarter. First, I'll touch on sales where we had a record Q3. The sales activity we delivered was actually the third best quarter in our history. We closed 17 cloud deals, 14 for at least 1 of our InsuranceSuite applications, and 3 for InsuranceNow. We saw particular strength at the high end of the market, closing seven core system deals with tier 1 insurers and three with tier 2 insurers, again, proving the maturity and robustness of our platform and validating our long-standing strategy to focus on the unique demands of this segment of the market.

Our sales success resulted in ARR of $960 million, allowing us to raise our full year outlook. We are solidly on track to exceed $1 billion in ARR this year, which was a collective ambition we established a number of years ago. We will be thrilled to surpass this milestone, but more excited about the overall momentum in the business. Our growth this quarter was broad-based and multi-dimensional, with nine cloud migrations, five net new deals and three expansions.

I'm also excited about the traction we've established with InsuranceNow. This quarter, we closed three net new InsuranceNow wins, including two of the largest ever on this product. Our success with InsuranceNow highlights our ability to effectively serve insurers across all segments and tiers. Additionally, our international momentum continues to build with the significant cloud expansion in Canada and cloud wins in APAC and EMEA.

With respect to the deals we closed in the quarter, I'd like to point out a few encouraging themes. We continue to see insurers looking to replace rigid systems with more agile platforms that allow them to deploy new products and lines of business faster. Advanced Product Designer along with pre-integrated solutions from our marketplace

were key to winning multiple deals this quarter, including several large insurers in the United States with a great new win in Latin America.

Our consistent, positive referenceability continues to spur both expansion activity and new cloud wins. This included a tier 1 personal lines insurer in the United States who after successfully deploying ClaimCenter on cloud is now expanding to InsuranceSuite. We also had great new expansion wins in Europe and I was pleased to see a new cloud win in Japan where the success of another local cloud project played a key role. And finally, the work we did previously to establish a large framework deal with Zurich Group is now paying off where we executed two more deals, one with Zurich Switzerland who adopted PolicyCenter and BillingCenter as well as a multibillion-dollar subsidiary who adopted the full InsuranceSuite.

We also continue to make progress with our data and analytics offerings. In Q3, we secured our first Guidewire industry intelligence sale. This is a new pre-built, market-validated predictive model embedded directly into our ClaimCenter workflow. This is a model trained and validated based on contributed anonymized data and only possible based on our cloud deployments. This is a first important step towards what we believe will ultimately not just be a great source of new revenue, but more so an added and unique benefit associated with running on our cloud platform.

A second highlight from the quarter is the continued momentum across our customer success, CloudOps, and professional services orgs, which is helping to drive excellent platform referenceability. We had another 10 customers go live on Guidewire Cloud Platform in the quarter, including Santalucía, Spain's leading family protection insurer; and Cincinnati Insurance Company, the flagship subsidiary of Cincinnati Financial.

The last few months have also been busy for us in the marketing and international event front. In March, we kicked off the first of three regional insurance forums in Paris, welcoming more than 200 attendees from customers and prospects across 16 countries. This gathering, our largest ever in Europe, focused on discussing the future of insurance and exploring ways the industry can continue to innovate and improve. Several customers shared their experiences, including Lee Dainty, Commercial Claims Director at RSA Insurance, who described how RSA's move to Guidewire Cloud has streamlined claims processing, improved transparency and positioned RSA ahead of its peers in the UK.

We also heard from [indiscernible] (00:25:36), a multi-line insurer headquartered in Switzerland who spoke about how Guidewire Cloud has driven better service and increased efficiency in its K2 program were over 99% straight-through processing. And Beesafe, a Polish micro insurance specialist, shared how they utilized Advanced Product Designer to rapidly launch a new product in four days, fulfilling a critical commitment to their distribution partner.

The forum was an opportunity for us to reaffirm our commitment to the European market, our commitment to partnering with European marketplace providers to drive local innovation, and our commitment to maintaining a rigorous - to maintaining rigorous compliance with evolving European regulations like Solvency II, GDPR, and DORA.

In May, we hosted two more regional insurance forums, one in Tokyo and one in Sydney, welcoming more than 150 and 170 attendees, respectively, making them also our largest ever events in these regions. At the Tokyo forum, we announced a major step forward in our commitment to the Japanese market, an investment of approximately $60 million over the next five years that extends and enhances our existing local operations, talent, innovation, and partnerships. We were also excited to hear from our first cloud customer in Japan who shared how they are using Guidewire Cloud to drive innovation and modernize their operations.

At our forum in Sydney, Neil Morgan, COO of IAG, shared a powerful story about the role of technology in crisis. After a series of severe weather events in Auckland, IAG faced a surge of 48,000 claims, including 4,000 written-off vehicles. One team member using Guidewire ClaimCenter integrated with an intelligent automation tool to build a bot that cut claim processing time from 20 minutes to just 90 seconds, a change that freed up teams to focus on supporting customers when it mattered most. Together, these three events demonstrated how we're delivering on our global strategy through deep local partnerships, innovation, and track record of execution excellence.

But for me, the real highlight of the past few months was the developer summit we held in Bangalore, India. We put on our first developer event last year in Bangalore and were surprised at the positive reception and interest. This year, we were blown away with over 1,500 developers attending from nearly 60 partners and customers. The size of this event is something I think worth noting. We talk about the scale of our partner community and the scale of our certified ecosystem of developers and Guidewire professionals, but to see 1,500 people all come together in one room to learn and enhance their careers and ability to support Guidewire programs more effectively was inspiring.

Every attendee was encouraged to bring a laptop and we had the opportunity to share in a very hands-on keyboard sort of way the new platform advancements and features with the technical practitioners really driving the innovation and execution in our community. We shared new capabilities around upgrade-safe development for InsuranceSuite extensions, new migration technology to support upgrades to our Advanced Product Designer, new components and capabilities in our Jutro front-end web experience platform, new AI cogen capabilities supporting Jutro, integration applications, and Gosu extensions. We shared new approaches to full cycle business intelligence with our cloud data platform, Data Studio, and Explore dashboard and reporting suite as well as the ability to use all of this to easily generate, test, and deploy predictive models on our platform.

Finally, and maybe most interesting in the long-term, we showed developers where we're headed in terms of supporting virtual cloud-based instances of Guidewire they can use to develop against our complete cloud platform or even host custom applications and workloads all on the Guidewire Cloud Platform. I have been very focused lately on the potential positive impacts generative AI will have on Guidewire and the insurance industry and I think generally this event encapsulated a lot of the potential for increased program velocity that might provide a boost to Guidewire, but more so the innovation agenda in the insurance industry.

And in the midst of all of this, we completed our acquisition of Quantee, a cutting-edge provider of pricing and rating technology based in Poland. Since closing the acquisition, we've been hard at work planning the integration of Quantee into our broader technology portfolio and expect to share more specific plans about this area of our product strategy in future calls.

In summary, Q3 was a historic quarter for Guidewire and highlights strong market momentum across every tier and every region of the P&C industry. Insurers all over the world are increasingly recognizing the maturity, flexibility, and proven capabilities of Guidewire Cloud Platform. I could not be more pleased with our strategic position heading into our Q4 as I think we are well-placed to continue our cloud transformation and mission to support efforts to modernize and power innovation in our industry.

So, with that, I'll turn it over to Jeff to discuss the financials in more detail.

Jeff Cooper

Chief Financial Officer, Guidewire Software, Inc.

Disclaimer

Guidewire Software Inc. published this content on June 04, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 04, 2025 at 13:39 UTC.