Guidewire Software 2026 Q1 Earnings Net Income Surges 242.6% on Strong Revenue Growth

Guidewire Software (GWRE) reported Q1 2026 results that exceeded expectations, with revenue rising 26.5% year-over-year and net income surging 242.6%. The company raised fiscal 2026 ARR and revenue guidance, reflecting confidence in its cloud and AI-driven growth trajectory.

Revenue

Guidewire’s total revenue climbed to $332.64 million in Q1 2026, up from $262.90 million in the prior year. Subscription and support revenue led the charge, reaching $222.20 million—a 31% year-over-year increase. License and services segments followed with $41.97 million and $68.47 million, respectively, while total revenue marked a 27% year-over-year growth. The performance underscores robust demand for Guidewire’s cloud offerings and expanding customer base.

Earnings/Net Income

The company’s EPS surged 236.4% to $0.37, with net income hitting $31.31 million—a 242.6% year-over-year increase. This marked a record high for Q1 net income in 16 years, driven by efficient cost management and strong revenue leverage. The earnings growth reflects Guidewire’s successful transition to recurring revenue models and strategic cost optimization.

Price Action

Following the earnings release, GWRE shares edged up 0.62% in the latest trading day and 0.65% for the week, though they declined 7.65% month-to-date. The stock’s mixed performance highlights investor caution amid broader market volatility and high valuation multiples.

Post-Earnings Price Action Review

A strategy of buying GWRE shares after a quarterly revenue decline and holding for 30 days delivered a 248.69% return over three years, outperforming the 70.56% benchmark by 178.13%. With a CAGR of 52.15% and zero maximum drawdown, the strategy demonstrated exceptional risk-adjusted returns, capitalizing on GWRE’s post-revenue drop momentum.

CEO Commentary

CEO Mike Rosenbaum highlighted 22% year-over-year ARR growth and the launch of cloud platforms like PricingCenter and UnderwritingCenter. He emphasized AI integration and ecosystem partnerships as key drivers for future growth, expressing confidence in Guidewire’s ability to enhance insurer outcomes through cloud extensibility.

Guidance

Guidewire raised FY2026 ARR guidance to $1.22–1.23 billion and total revenue to $1.403–1.419 billion. Q2 guidance includes ARR of $1.107–1.113 billion and revenue of $339–345 million. The company anticipates subscription and support gross margins of 72–73%, while services margins are expected to decline to 13–14% due to AI investments.

Additional News

Zacks Research downgraded GWRE to “Hold” from “Strong-Buy,” citing valuation concerns. Meanwhile, CEO Mike Rosenbaum and President John Mullen sold shares totaling $17.27 million and $9.68 million, respectively, under prearranged trading plans. Guidewire also announced new cloud applications, including PricingCenter and UnderwritingCenter, integrating generative AI to streamline insurer workflows. These developments signal strategic bets on AI-driven innovation despite insider selling activity and mixed analyst sentiment.