Guidewire Software 2026 Q1 Earnings Earnings Surge 236%, Revenue Beats Estimates

Guidewire Software (GWRE) reported its fiscal 2026 Q1 earnings on Dec 04th, 2025, delivering strong results that exceeded expectations. The company raised full-year guidance and highlighted robust cloud adoption, with revenue growing 26.5% year-over-year. CEO Mike Rosenbaum emphasized momentum in North America and international markets, while analysts noted valuation concerns despite earnings outperformance.

Revenue

Guidewire’s total revenue surged 26.5% to $332.64 million in Q1 2026, surpassing the $317.24 million Zacks Consensus Estimate. Subscription and support revenue led the charge, growing 30.9% to $222.20 million, driven by cloud migration. License revenue increased 12.3% to $41.97 million, while services revenue rose 22.7% to $68.47 million. The subscription component within support grew 35.7% to $207.46 million, though standalone support declined 12.7% to $14.74 million.

Earnings/Net Income

Earnings per share (EPS) jumped 236.4% to $0.37 in Q1 2026, compared to $0.11 in the prior-year period. Net income reached $31.31 million, reflecting a 242.6% increase from $9.14 million in 2025 Q1. This marked a record-high net income for the company’s Q1, the highest in 16 years. The EPS performance significantly outperformed expectations, signaling strong profitability.

Price Action

The stock price of Guidewire Software declined 6.66% during the latest trading day, with a 7.42% month-to-date drop. Despite the earnings beat, investors appeared cautious, potentially reflecting valuation concerns. The stock closed at $211.15, down 2.7% from the previous day.

Post-Earnings Price Action Review

A strategy of buying GWRE when revenues miss and holding for 30 days showed moderate performance, achieving a 123.59% return compared to the benchmark’s 138.23%. This resulted in an excess return of -14.64%, indicating underperformance relative to the market. The Sharpe ratio of 0.44 suggested reasonable risk-adjusted returns, but the 0.00% maximum drawdown raised concerns for risk-averse investors.

CEO Commentary

Mike Rosenbaum, CEO & Director, highlighted Guidewire’s Q1 2026 performance, including 22% ARR growth and momentum in North America and international markets. Strategic priorities included expanding the Guidewire Cloud Platform with new AI-integrated applications like PricingCenter and UnderwritingCenter. Rosenbaum expressed confidence in the company’s long-term innovation and its positioning in the generative AI era.

Guidance

Guidewire raised 2026 ARR guidance to $1.220 billion–$1.230 billion and total revenue to $1.403 billion–$1.419 billion. Subscription and support gross margins are projected at 72–73%, with services margins at 13–14%. Q2 guidance includes ARR of $1.107 billion–$1.113 billion and total revenue of $339 million–$345 million.

Additional News

Guidewire recently acquired ProNavigator, an AI firm, to enhance its generative AI capabilities, with the integration expected to add $4 million annual recurring revenue. CEO Mike Rosenbaum and CFO Jeffrey Cooper sold significant shares in the past three months, totaling $7.36 million and $6.39 million, respectively. The company also announced a partnership with Cincinnati Insurance for the rollout of ClaimCenter on its cloud platform, underscoring its leadership in P&C insurance technology.

Key Non-Earnings News (3 Weeks Post-Earnings):

1. M&A Activity:

   Guidewire acquired ProNavigator to bolster its AI-driven insurance solutions, expanding its ecosystem.

2. C-Level Activity:

   CEO Mike Rosenbaum and CFO Jeffrey Cooper executed large insider sales, totaling over $13.7 million, raising questions about confidence in valuation.

3. Strategic Partnerships:

   A major deployment with Cincinnati Insurance highlighted Guidewire’s cloud platform’s scalability, reinforcing its market position in P&C insurance.

The company’s focus on AI integration and cloud expansion remains central to its growth narrative, despite valuation skepticism from some analysts.