Guidewire Software 2026 Q1 Earnings Strong Performance with Net Income Surges 242.6%

Generated by AI AgentDaily EarningsReviewed byAInvest News Editorial Team
Thursday, Dec 4, 2025 2:17 am ET1min read
Aime RobotAime Summary

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Guidewire Software
reported Q1 2026 earnings with 26.5% revenue growth to $332.64M, exceeding expectations and raising FY2026 guidance to $1.403–1.419B total revenue.

- Net income surged 242.6% to $31.31M, driven by 31% YoY subscription revenue growth and improved operational efficiency, marking a 16-year Q1 high.

- Stock rose 0.62% daily but fell 7.65% monthly; a post-earnings trading

strategy
generated 248.69% returns vs. 70.56% benchmark over three years.

- CEO highlighted 22% ARR growth and eight cloud deals, while CFO raised ARR guidance to $1.22–1.23B, emphasizing AI-driven platform expansion and vertical data utilization.

- Analysts issued four "Overweight" ratings with $288 median target, as insider sales and hedge fund activity reflected mixed investor sentiment ahead of Q2 guidance.

Guidewire Software (GWRE) reported Q1 2026 earnings on Dec 3, 2025, with total revenue rising 26.5% to $332.64 million, surpassing expectations. The company raised its fiscal 2026 guidance, projecting ARR between $1.22–$1.23 billion and total revenue of $1.403–$1.419 billion.

Revenue

Guidewire’s revenue was driven by a 31% year-over-year increase in subscription and support revenue to $222.20 million, while license revenue stood at $41.97 million and services revenue reached $68.47 million. Total revenue of $332.64 million reflected robust demand for cloud solutions and strategic customer deals.

Earnings/Net Income

The company’s EPS surged 236.4% to $0.37, and net income jumped 242.6% to $31.31 million, marking a 16-year high for Q1 net income. This growth underscored improved operational efficiency and strong customer retention.

Price Action

The stock price edged up 0.62% during the latest trading day but dropped 7.65% month-to-date.

Post-Earnings Price Action Review

The strategy of buying

Guidewire
shares after a quarterly revenue drop on the financial report release date and holding for 30 days delivered exceptional returns over the past three years. The strategy achieved a 248.69% return, vastly outperforming the benchmark return of 70.56%. The excess return was 178.13%, indicating the strategy’s significant advantage over a simple buy-and-hold approach. With a CAGR of 52.15% and a maximum drawdown of 0.00%, the strategy also showcased robust risk-adjusted performance, highlighted by a Sharpe ratio of 1.45 and a volatility of 36.04%.

CEO Commentary

CEO Mike Rosenbaum highlighted 22% YoY ARR growth and eight cloud deals, driven by cloud maturity and customer success. Strategic priorities include expanding the Guidewire Cloud Platform with new AI-driven applications and leveraging vertical data to enhance insurer outcomes.

Guidance

CFO Jeffrey Cooper 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, revenue of $339–$345 million, and non-GAAP operating income of $68–$74 million.

Additional News

  1. Insider Sales: CEO Mike Rosenbaum sold 1,400 shares ($298.8K), and President John Mullen sold 3,000 shares ($640.3K) via prearranged trading plans.

  2. Hedge Fund Activity: Linonia Partnership LP added 915,841 shares (+27.0%), while Wellington Management Group LLP reduced holdings by 31.7%.

  3. Analyst Ratings: Four firms, including Wells Fargo and RBC Capital, issued “Overweight”/“Outperform” ratings, with a median price target of $288.

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