Executive Summary
Guidewire Software Inc delivered a solid top-line performance in QQ3 2024 with revenue of $240.68 million, up 15.99% year over year, reflecting ongoing demand for Guidewire’s software platforms and cloud-enabled offerings. However, the quarter posted a net loss of $5.48 million and negative operating income of $16.70 million, indicating substantial operating expense absorption as the company continues to invest in cloud-based products, go-to-market initiatives, and product development. Gross margin remained robust at approximately 59.1%, underscoring the resilience of the underlying software mix even as operating expenses escalate. Cash flow from operations was positive at $4.80 million, and free cash flow was a modest $0.75 million, with a cash balance of about $360.8 million and a total liquidity cushion comprising cash and short-term investments of roughly $782.3 million against total debt of $435.6 million (net debt of $75.99 million).
The QQ3 results reinforce Guidewire’s strategic pivot toward cloud-enabled platforms (InsuranceNow, InsuranceSuite, and related data/analytics) to monetize a broader, recurring revenue base. While profitability remains a near-term challenge due to continued investment in R&D, GTM, and platform enhancements, the balance sheet provides ample flexibility to fund product development and market expansion. Investors should monitor the evolution of cloud ARR, the mix shift from license to subscription, the trajectory of gross margin expansion, and the company’s ability to convert operating and free cash flow as cloud adoption matures.
Key Performance Indicators
QoQ: -34.54% | YoY:71.12%
QoQ: -156.55% | YoY:87.98%
QoQ: -155.33% | YoY:88.14%
Key Insights
Revenue: $240.678m, YoY +15.99%, QoQ -0.09%. Gross Profit: $142.227m, Margin 59.09%, YoY +43.78%, QoQ -0.13%. Operating Income: -$16.697m, Margin -6.94%, YoY +71.12%, QoQ -34.54%. Net Income: -$5.478m, Margin -2.28%, YoY +87.98%, QoQ -156.55%. EPS: -$0.0664, Diluted -$0.07, YoY +88.14%, QoQ -155.33%. Cash from Operations: $4.803m; Capital Expenditures: -$4.049m; Free Cash Flow: $0.754m. Balance Sheet: cash and short-term investments $782.291m; total debt $435.587m; net debt $75.99m. Liquidity: c...
Financial Highlights
Revenue: $240.678m, YoY +15.99%, QoQ -0.09%. Gross Profit: $142.227m, Margin 59.09%, YoY +43.78%, QoQ -0.13%. Operating Income: -$16.697m, Margin -6.94%, YoY +71.12%, QoQ -34.54%. Net Income: -$5.478m, Margin -2.28%, YoY +87.98%, QoQ -156.55%. EPS: -$0.0664, Diluted -$0.07, YoY +88.14%, QoQ -155.33%. Cash from Operations: $4.803m; Capital Expenditures: -$4.049m; Free Cash Flow: $0.754m. Balance Sheet: cash and short-term investments $782.291m; total debt $435.587m; net debt $75.99m. Liquidity: cash and equivalents $359.6m; total current assets $1,081.511m; total assets $2,040.025m; total current liabilities $704.807m; current ratio 1.512. Profitability/Efficiency: gross margin ~59.1%, operating margin -7.16% (reported), net margin -2.28%. Cash flow and efficiency metrics reflect ongoing investment in cloud initiatives, with modest operating cash flow per share ($0.0582) and free cash flow per share ($0.0091). Valuation context: price-to-book ~7.15x; price-to-sales ~38.17x; no dividend implied. Note: All figures in USD.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
240.68M |
15.99% |
-0.09% |
| Gross Profit |
142.23M |
43.78% |
-0.13% |
| Operating Income |
-16.70M |
71.12% |
-34.54% |
| Net Income |
-5.48M |
87.98% |
-156.55% |
| EPS |
-0.07 |
88.14% |
-155.33% |
Key Financial Ratios
operatingProfitMargin
-7.16%
operatingCashFlowPerShare
$0.06
freeCashFlowPerShare
$0.01
priceEarningsRatio
-419.28
Management Commentary
No earnings call transcript was provided in the data set. As a result, thematic highlights and management quotes could not be extracted directly. Investors should look for management commentary on: (1) cloud transition progress (insurance cloud platforms, ARR growth, and customer retention), (2) margin normalization and roadmap to profitability (expense discipline, mix shift to subscription), (3) капитал allocation and product investment strategy (R&D prioritization, go-to-market investments), and (4) guidance or commentary on 2024–2025 outlook and any indications of longer-term profitability targets.
Transcript data not provided.
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Transcript data not provided.
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Forward Guidance
No formal forward guidance was disclosed in the QQ3 2024 materials provided. Given the ongoing investment cycle in Guidewire’s cloud platforms and data analytics offerings, the trajectory of operating margins will likely hinge on: (a) the pace of cloud ARR expansion and revenue mix shift from license to subscription, (b) ongoing efficiency improvements in R&D and go-to-market spend, and (c) the monetization of InsuranceNow and related Platform as a Service (PaaS) offerings. Investors should monitor quarterly progression in cloud revenue, gross margin stabilization as the services & support load normalizes, and any stated targets for reaching profitability or positive free cash flow on a sustained basis. Key monitoring factors include ARR growth, churn/retention, new logo wins in the U.S. and London Market, and any strategic updates on partnerships or acquisitions.