Guidewire Software 2026 Q1 Earnings Record Net Income Surges 242.6%

Guidewire Software (GWRE) reported Q1 2026 earnings on Dec 3, 2025, exceeding revenue and EPS estimates. The company raised FY2026 ARR and revenue guidance, signaling confidence in its growth trajectory.

Revenue

Guidewire’s total revenue rose 26.5% year-over-year to $332.64 million, driven by strong performance across segments. Subscription and support revenue led the growth at $222.20 million, while license revenue totaled $41.97 million. Services revenue added $68.47 million, reflecting robust demand for the company’s cloud solutions.

Earnings/Net Income

Earnings per share (EPS) surged 236.4% to $0.37, with net income reaching $31.31 million—a 242.6% increase from 2025 Q1. This marks a new 16-year high for Q1 net income, underscoring the company’s improving profitability.

Post-Earnings Price Action Review

The strategy of buying Guidewire shares after quarterly revenue drops and holding for 30 days yielded exceptional returns over three years. It delivered a 248.69% return, outperforming the benchmark by 178.13%. The approach’s CAGR of 52.15% and Sharpe ratio of 1.45 highlight its robust risk-adjusted performance, with no drawdowns recorded.

CEO Commentary

CEO Mike Rosenbaum highlighted 22% ARR growth and international wins in the U.K., Japan, and Australia. Strategic priorities include expanding the Guidewire Cloud Platform with AI-driven tools like PricingCenter and UnderwritingCenter, emphasizing long-term growth and customer success.

Guidance

Guidewire raised FY2026 ARR to $1.22B–$1.23B and total revenue to $1.403B–$1.419B. Q2 guidance includes $339M–$345M in revenue and $68M–$74M in non-GAAP operating income.

Additional News

1. Insider Sales: CEO Mike Rosenbaum sold 1,400 shares ($298.8K), while CFO John Mullen sold 3,000 shares ($640.3K), both executed via prearranged 10b5-1 plans.

2. Analyst Optimism: Four firms, including Wells Fargo and RBC Capital, reiterated "Overweight" or "Outperform" ratings, with a median price target of $288.

3. Portfolio Shifts: Institutional investors like Linonia Partnership LP added 915,841 shares, while Wellington Management reduced its stake by 31.7%.