Guidewire Forecasts $1.21B-$1.22B ARR in 2026, Driven by Cloud Growth and Major Tier 1 Wins.

Guidewire Software expects $1.21B-$1.22B in annual recurring revenue (ARR) for fiscal 2026, driven by accelerating growth in cloud business and major Tier 1 wins. CEO Mike Rosenbaum emphasized surpassing the $1B ARR milestone and expressed optimism about the company's future potential.

Guidewire Software, Inc. (GWRE) has reported impressive financial results for fiscal 2025, with the company expecting robust growth in annual recurring revenue (ARR) for fiscal 2026. The company's CEO, Mike Rosenbaum, highlighted the milestone of surpassing the $1 billion ARR mark, expressing optimism about the company's future potential.

The company expects ARR between $1.21 billion and $1.22 billion for fiscal 2026, representing a 17% constant currency growth at the midpoint. This projection is driven by accelerating growth in the cloud business and significant wins with major Tier 1 customers. Guidewire's cloud adoption has been a key driver of this growth, with a record quarter in Q4 2025, including a landmark deal with Liberty Mutual.

Rosenbaum emphasized the company's strategic position in the insurance sector, noting the potential for generative AI to unlock new opportunities. The company's focus on data, analytics, and AI is expected to continue, with subscription and support gross margins forecasted at 71% to 72% for fiscal 2026. Total gross margins are expected to be around 66%.

Guidewire's strong financial performance in fiscal 2025 included ARR of $1.032 billion, with a 19% year-over-year increase on a constant currency basis. Total revenue for the year was $1.2 billion, operating income was $208 million, and cash flow from operations was $301 million. The company ended the quarter with $1.5 billion in cash, cash equivalents, and investments.

The company's cloud momentum is expected to continue, with 17 cloud deals in Q3 2025, including seven with Tier 1 insurers. Subscription revenue grew 32% to $181.8 million in Q3 2025, outpacing total revenue growth of 22% to $294 million. The company's aggressive pivot to a Software-as-a-Service (SaaS) model has positioned it for long-term profitability in the high-growth insurance technology sector.

Rosenbaum and the management team maintained a confident and optimistic tone throughout the earnings call, expressing excitement about the company's strategic direction and the potential of AI in the insurance sector.

References:
[1] https://seekingalpha.com/news/4492552-guidewire-expects-1_21b-1_22b-arr-in-fiscal-2026-as-cloud-growth-accelerates-with-major-tier
[2] https://www.ainvest.com/news/guidewire-cloud-momentum-recurring-revenue-growth-signal-strong-saas-transition-future-profitability-2509/