Guidewire Software Q2 Earnings Exceed Expectations, Shares Jump 17.3%

Guidewire Software (GWRE) shares jumped 17.3% after Q2 2025 financial results surpassed analyst estimates. The company reported revenue of $356.6 million, up 22.3% YoY, and adjusted earnings of $0.84 per share, beating expectations by 5.8% and 33.3%, respectively. ARR grew to $1.03 billion, and the company issued strong revenue guidance for Q3. The results were fueled by a successful transition to a subscription-based cloud model and increased efficiency.

Guidewire Software (GWRE) has reported its Q2 2025 financial results, which exceeded analyst estimates, leading to a 17.3% jump in its stock price. The company reported a revenue of $356.6 million, a 22.3% year-over-year increase, and adjusted earnings of $0.84 per share, surpassing expectations by 5.8% and 33.3%, respectively [1]. The company's Annual Recurring Revenue (ARR) grew to $1.03 billion, reflecting a robust performance in its transition to a subscription-based cloud model.

The results were driven by a successful shift to cloud-based solutions, which contributed significantly to the company's growth. The subscription revenue, which accounted for the largest share, rose by 33%, while cloud and recurring revenue now represent 74% of the total ARR [1]. This shift has positioned Guidewire as a leader in the P&C insurance software market, with a market share of over 55% [2].

Guidewire's financial health was further bolstered by its strong free cash flow, which rose by 25.6% to $237.7 million in FY2025 [2]. The company also provided strong revenue guidance for Q3 2025, projecting total revenue between $1.385 billion and $1.405 billion and ARR between $1.21 billion and $1.22 billion [1].

Despite the positive results, the company faces challenges such as competition from emerging insurtech players and macroeconomic headwinds. However, its long-term contracts and recurring revenue model provide a stable foundation for growth.

References:

[1] https://www.ainvest.com/news/guidewire-software-gwre-q4-earnings-outperformance-growth-trajectory-assessing-sustainability-cloud-driven-revenue-shareholder-2509/
[2] https://www.ainvest.com/news/guidewire-software-2025-q4-earnings-record-net-income-surges-210-2509/