Guidewire Software delivered solid top-line growth in QQ3 2025, with revenue of USD 293.5 million, up 21.95% year-over-year and 1.39% quarter-over-quarter. The period featured a strong gross margin of 62.2% and an EBITDA of USD 58.3 million, contributing to a positive pre-tax result. Net income reached USD 45.99 million and earnings per share USD 0.55 (diluted USD 0.54), aided by a notable non-operating item: total other income and expenses net of USD 44.2 million, which largely drove the bottom-line improvement versus a relatively modest operating profit of USD 4.47 million. Free cash flow was USD 31.65 million, underscoring healthy cash generation even as investing and financing activities affected cash positioning.
Key takeaways for investors include: (1) the Cloud and Services mix is increasing value through the Guidewire InsuranceSuite and InsuranceNow platforms, supporting durable revenue growth; (2) operating leverage remains modest in the near term, with operating income at USD 4.5 million and a positive EBITDA suggesting a business transitioning toward higher-margin, recurring cloud revenue; and (3) a strong liquidity position (cash and cash equivalents around USD 510M, net debt USD 196.4M) provides flexibility to fund R&D and strategic investments while maintaining balance sheet strength. Going forward, investors should monitor the trajectory of cloud ARR, customer retention and mix shifts, and any recurring vs. non-recurring items in non-operating income that can influence reported profitability.