Executive Summary
Guidewire Software delivered a solid QQ4 2024 performance, highlighted by a revenue beat and meaningful cash generation, reflecting ongoing execution in a cloud-enabled software model for the property and casualty (P&C) insurance market. Revenue of $291.5 million posted a 7.99% year-over-year increase and a strong sequential uptick of 21.12% quarter-over-quarter, underscoring improving demand and seasonal alignment into the year-end release period. The company reported a gross margin of approximately 63.95% and an EBIT margin of about 3.54%, yielding net income of $16.76 million and earnings per share of $0.20 for the quarter. Operational efficiency combined with a robust cash flow framework produced free cash flow of $189.3 million and operating cash flow of $193.8 million, supporting a net cash position (net debt of roughly $105 million in cash terms) and a substantial liquidity runway.
Balance sheet strength is evident: total assets of $2.23 billion, a sizable cash and short-term investment buffer (~$1.00 billion combined), and a low long-term leverage profile (debt-to-capitalization around 24.8%). Deferred revenue remains a meaningful source of future revenue recognition, reflecting the subscription and cloud-based nature of the Guidewire portfolio. The quarterly performance reflects ongoing benefits from Guidewire’s Cloud and InsuranceNow strategies, and operating expenses remained elevated due to R&D and go-to-market investments that support platform growth. While the market for insurtech software remains competitive and sensitive to IT budget cycles, Guidewire’s cash generation, margin discipline, and product breadth position it to capitalize on ongoing migration to cloud-based solutions in a multi-year cycle.
Key Performance Indicators
QoQ: 161.78% | YoY:69.22%
QoQ: 405.93% | YoY:37.14%
QoQ: 401.20% | YoY:33.33%
Key Insights
Revenue: $291.5m in Q4 2024, up 7.99% YoY and 21.12% QoQ. Gross profit: $186.4m; gross margin 63.95% (vs. 63.0%–64% typical for software peers in transition). Operating income: $10.31m; operating margin 3.54%. EBITDA: $26.35m; EBITDA margin 9.04%. Net income: $16.76m; net margin 5.75%. EPS: $0.20; diluted EPS $0.20.
Cash flow: Net cash provided by operating activities $193.78m; free cash flow $189.35m; operating cash flow per share $2.34; free cash flow per share $2.32.
Balance sheet: Cash...
Financial Highlights
Revenue: $291.5m in Q4 2024, up 7.99% YoY and 21.12% QoQ. Gross profit: $186.4m; gross margin 63.95% (vs. 63.0%–64% typical for software peers in transition). Operating income: $10.31m; operating margin 3.54%. EBITDA: $26.35m; EBITDA margin 9.04%. Net income: $16.76m; net margin 5.75%. EPS: $0.20; diluted EPS $0.20.
Cash flow: Net cash provided by operating activities $193.78m; free cash flow $189.35m; operating cash flow per share $2.34; free cash flow per share $2.32.
Balance sheet: Cash and cash equivalents $548.0m; total cash and short-term investments $1.003b; total assets $2.227b; total liabilities $0.884b; total stockholders’ equity $1.343b. Short-term debt $408.2m; long-term debt $34.7m; total debt $442.9m; net debt of approximately -$105.1m (net cash).
Liquidity/ratios: current ratio 1.55x; debt ratio 0.20x; debt/equity 0.33x; interest coverage 6.15x. Revenue per share and cash flow metrics imply strong cash conversion relative to share count (~82.29m weighted average shares). Valuation indicators show elevated multiples (price-to-sales ~43.5x; P/E ~189x; EV/Revenue-like measures well into the 30s–400s range depending on the metric).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
291.52M |
7.99% |
21.12% |
| Gross Profit |
186.44M |
13.90% |
31.08% |
| Operating Income |
10.31M |
69.22% |
161.78% |
| Net Income |
16.76M |
37.14% |
405.93% |
| EPS |
0.20 |
33.33% |
401.20% |
Key Financial Ratios
operatingProfitMargin
3.54%
operatingCashFlowPerShare
$2.34
freeCashFlowPerShare
$2.32
priceEarningsRatio
189.34
Management Commentary
No earnings call transcript data was provided in the material. Consequently, there are no management quotes or theme-based transcript highlights to extract. If a transcript becomes available, we will incorporate themes such as cloud adoption progress, ARR growth, renewal rates, product expansion (InsuranceNow, InsuranceSuite), and geographic expansion (e.g., London market) with direct quotes and context.
Forward Guidance
No explicit forward guidance was included in the provided data. In lieu of company-issued targets, investors should monitor key drivers that typically accompany Guidewire’s cloud transition: (1) ARR growth and renewal rates, (2) mix shift toward cloud-based subscriptions and managed services, (3) gross and operating margins as the company scales cloud deployments, (4) product adoption across Guidewire InsuranceSuite, InsuranceNow and related modules, (5) progress in strategic markets such as London and other international regions, and (6) capital allocation posture including investment in R&D and potential share repurchases. Given the large deferred revenue balance and disciplined cost structure, the path to sustained profitability hinges on expanding high-margin SaaS revenue and scalable services. Key factors to monitor include the sustainability of QoQ acceleration, depth of upsell within existing customers, churn levels, and competitive dynamics with peers like Duck Creek and Sapiens as insurance software adoption accelerates globally.