Guidewire Announces Second Quarter Fiscal Year 2022 Financial Results|||

SAN MATEO, Calif.–(Business WIRE)–#Earnings–Guidewire (NYSE: GWRE) today appear its financial results for the fiscal quarter ended January 31, 2022.

“Our second quarter results exceeded our guidance for ARR, revenue, and profitability with subscription revenue increasing 64% year-over-year,” said Mike Rosenbaum, principal executive officeholder, Guidewire. “We saw connected demand for Guidewire Deject, including 11 cloud deals in the quarter from a mix of existing customer migrations and new customers embarking on core modernizations.”

2nd Quarter Fiscal Year 2022 Fiscal Highlights


Revenue

  • Full acquirement for the second quarter of fiscal year 2022 was $204.6 million, an increase of 14% from the same quarter in fiscal year 2021. Subscription and support revenue was $84.3 meg, an increase of 42%; services revenue was $50.five million, an increase of xix%; and license revenue was $69.viii million, a decrease of ten%.
  • Annual recurring revenue, or ARR, was $620 1000000 every bit of January 31, 2022, compared to $582 meg as of July 31, 2021. ARR results for acting quarterly periods in fiscal year 2022 are based on bodily currency rates at the end of fiscal year 2021, held constant throughout the year.


Profitability

  • GAAP loss from operations was $39.5 million for the 2d quarter of financial year 2022, compared with $27.i million for the aforementioned quarter in fiscal year 2021.
  • Non-GAAP income from operations was $iii.0 1000000 for the second quarter of fiscal year 2022, compared with $7.5 one thousand thousand for the same quarter in financial year 2021.
  • GAAP net loss was $40.7 1000000 for the second quarter of financial yr 2022, compared with $viii.vii 1000000 for the same quarter in fiscal year 2021. GAAP net loss per share was $0.49, based on diluted weighted average shares outstanding of 83.four million, compared with $0.ten for the aforementioned quarter in fiscal year 2021, based on diluted weighted average shares outstanding of 83.eight 1000000.
  • Non-GAAP net loss was $4.viii 1000000 for the second quarter of fiscal year 2022, compared with internet income of $9.0 million for the same quarter in fiscal year 2021. Non-GAAP cyberspace loss per share was $0.06, based on diluted weighted average shares outstanding of 83.4 million, compared with net income per share of $0.11 for the same quarter in fiscal year 2021, based on diluted weighted average shares outstanding of 84.8 million.


Liquidity

  • The Company had $1.1 billion in cash, greenbacks equivalents, and investments at January 31, 2022, compared to $1.3 billion at July 31, 2021. The Visitor used $110.1 million in greenbacks from operations during the first half of fiscal yr 2022 and $43.8 million for the acquisition of Hazard Hub during the get-go quarter of fiscal year 2022.
  • During the second quarter of financial year 2022, the Company used $11.2 million to repurchase 0.one million shares of its mutual stock, which completes its authorized share repurchase program of $200 million.


Business Outlook

Guidewire is issuing the following outlook for the third quarter of fiscal yr 2022 based on electric current expectations:

  • ARR betwixt $632 million and $635 million
  • Total revenue between $186 one thousand thousand and $190 million
  • Operating income (loss) between $(65) million and $(62) million
  • Non-GAAP operating income (loss) betwixt $(29) million and $(25) million

Guidewire is issuing the following updated outlook for financial year 2022 based on current expectations:

  • ARR between $664 1000000 and $670 million
  • Total revenue betwixt $784 million and $792 1000000
  • Operating income (loss) between $(202) million and $(194) meg
  • Non-GAAP operating income (loss) between $(50) 1000000 and $(42) 1000000
  • Operating cash flow betwixt $ten one thousand thousand and $twenty million

Conference Telephone call Information

What:

Guidewire Second Quarter Fiscal Yr 2022 Financial Results Briefing Telephone call

When:

Tuesday, March eight, 2022

Time:

2:00 p.m. PT (five:00 p.thousand. ET)

Live Call:

(877) 705-6003, Domestic

(201) 493-6725, International

Replay:

(844) 512-2921, Passcode 13727147, Domestic

(412) 317-6671, Passcode 13727147, International

Webcast:

https://ir.guidewire.com/ (live and replay)

The webcast will be archived on Guidewire’s website (www.guidewire.com) for a period of three months.

Non-GAAP Financial Measures and Other Metrics

This press release contains the post-obit non-GAAP financial measures: non-GAAP gross profit, non-GAAP income (loss) from operations, non-GAAP net income (loss), not-GAAP income revenue enhancement provision (benefit), non-GAAP internet income (loss) per share, and free cash flow. Not-GAAP gross profit and not-GAAP income (loss) from operations exclude stock-based compensation, amortization of intangibles, the COVID-19 Canada Emergency Wage Subsidy benefit, and acquisition consideration holdback. Non-GAAP internet income (loss), non-GAAP income tax provision (do good), and not-GAAP net income (loss) per share besides exclude the acquittal of debt discount and issuance costs from our convertible notes and the related tax furnishings of the non-GAAP adjustments. Free cash menstruum consists of net cash menses provided by (used in) operating activities less cash used for purchases of holding and equipment and capitalized software development costs. These Non-GAAP measures enable u.s. to clarify our financial performance without the effects of certain non-cash items such every bit amortization, stock-based compensation, and changes in off-white value of strategic investments.

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Annual recurring revenue (“ARR”) is used to quantify the annualized recurring value outlined in active customer contracts at the terminate of a reporting period. ARR includes the annualized recurring value of term licenses, subscription agreements, support contracts, and hosting agreements based on customer contracts, which may not be the same every bit the timing and amount of acquirement recognized. All components of the licensing and other arrangements that are not expected to recur (primarily perpetual licenses and professional services) are excluded. In some arrangements with multiple functioning obligations, a portion of recurring license and back up or subscription contract value is allocated to services revenue for revenue recognition purposes, simply does not get allocated for purposes of calculating ARR. This allotment only impacts the initial term of the contract. This means that as we increase arrangements with multiple functioning obligations that include services at discounted rates, more than of the total contract value will be recognized as services revenue, but our reported ARR amount volition not exist impacted. During the six months ended January 31, 2022, the recurring license and support or subscription contract value recognized equally services revenue was $vi.0 one thousand thousand.

Guidewire believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain fiscal and business trends relating to Guidewire’due south fiscal condition and results of operations. The Company’south direction uses these non-GAAP measures and other metrics to compare the Company’south performance to that of prior periods for tendency assay, for purposes of determining executive and senior management incentive bounty, and for budgeting and planning purposes. The Visitor believes that the use of these non-GAAP fiscal measures and other metrics provides an boosted tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors.

Management of the Visitor does not consider these non-GAAP measures in isolation or every bit an culling to financial measures determined in accord with GAAP. The primary limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required past GAAP to exist recorded in the Visitor’s fiscal statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment past direction well-nigh which expenses and income are excluded or included in determining these non-GAAP fiscal measures. Guidewire urges investors to review the reconciliation of its not-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly fiscal results, including the financial tables at the end of this press release, and non to rely on any single financial mensurate to evaluate the Visitor’s business concern.

About Guidewire

Guidewire is the platform P&C insurers trust to engage, innovate, and grow efficiently. We combine digital, core, analytics, and AI to deliver our platform as a cloud service. More than 450 insurers, from new ventures to the largest and most complex in the world, run on Guidewire.

Every bit a partner to our customers, we continually evolve to enable their success. We are proud of our unparalleled implementation rails record, with 1,000+ successful projects, supported by the largest R&D team and partner ecosystem in the industry. Our marketplace provides hundreds of applications that advance integration, localization, and innovation.

For more information, please visit www.guidewire.com and follow us on twitter: @Guidewire_PandC.

Annotation: For information almost Guidewire’south trademarks, visit https://world wide web.guidewire.com/legal-notices.

Cautionary Linguistic communication Concerning Forrad-Looking Statements

This printing release contains “forward-looking statements” inside the meaning of the “safe harbor” provisions of the Individual Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and our time to come business momentum regarding our cloud sales, product enhancements and cloud migration, and our associated cloud leadership, vision and strategy. These forward-looking statements are made as of the date they were beginning issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of direction. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forwards-looking statements. Forwards-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Guidewire’s control. Guidewire’south actual results could differ materially from those stated or unsaid in frontwards-looking statements due to a number of factors, including but non express to, risks detailed in Guidewire’southward almost recent Forms 10-K and x-Q filed with the Securities and Exchange Commission besides equally other documents that may be filed by the Visitor from time to time with the Securities and Substitution Commission. In particular, the following factors, amid others, could cause results to differ materially from those expressed or implied by such forward-looking statements: quarterly and almanac operating results may fluctuate more than expected; the impact of the COVID-19 pandemic and aggrandizement on our employees and our business and the businesses of our customers, system integrator (“SI”) partners, and vendors; seasonal and other variations related to our customer agreements and related revenue recognition may cause meaning fluctuations in our results of operations and greenbacks flows; our reliance on sales to and renewals from a relatively pocket-sized number of big customers for a substantial portion of our revenue; our ability to successfully manage whatsoever changes to our concern model, including the transition of our products to cloud offerings and the costs related to cloud operations; our products or cloud-based services may experience data security breaches; we face up intense competition in our market; our services revenue produces lower gross margins than our license, subscription and support acquirement; our production development and sales cycles are lengthy and may be affected past factors outside of our command; changes in accounting guidance, such every bit acquirement recognition, which take and may cause us to experience greater volatility in our quarterly and almanac results; assertions by third parties that we violate their intellectual holding rights could substantially harm our business; weakened global economic conditions may adversely bear on the P&C insurance manufacture including the rate of information technology spending; full general political or destabilizing events, including war, conflict or acts of terrorism; our power to sell our products is highly dependent on the quality of our professional person services and SI partners; the gamble of losing and hiring sufficient key employees; the challenges of international operations, including changes in foreign commutation rates; and other risks and uncertainties. By performance is not necessarily indicative of future results. The frontward-looking statements included in this press release represent Guidewire’southward views as of the date of this press release. The Company anticipates that subsequent events and developments will crusade its views to change. Guidewire undertakes no intention or obligation to update or revise whatever forward-looking statements, whether equally a outcome of new data, futurity events or otherwise. These forward-looking statements should not be relied upon as representing Guidewire’s views as of any date subsequent to the date of this printing release.

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GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

January 31,

2022

July 31,

2021

Avails

Current ASSETS:

Cash and cash equivalents

$

257,378

$

384,910

Short-term investments

562,753

734,517

Accounts receivable, internet

111,705

104,068

Unbilled accounts receivable, net

84,318

79,061

Prepaid expenses and other electric current avails

61,423

52,729

Total current assets

1,077,577

1,355,285

Long-term investments

293,537

227,164

Unbilled accounts receivable, net

19,665

24,361

Property and equipment, net

81,692

80,061

Operating lease assets

91,780

97,447

Intangible avails, cyberspace

27,918

19,743

Goodwill

372,062

340,877

Deferred tax assets, net

166,587

138,428

Other assets

52,807

38,479

Total ASSETS

$

2,183,625

$

2,321,845

LIABILITIES AND STOCKHOLDERS’ Equity

CURRENT LIABILITIES:

Accounts payable

$

24,661

$

27,830

Accrued employee bounty

53,516

102,137

Deferred acquirement, net

123,234

138,699

Other current liabilities

29,740

31,648

Total current liabilities

231,151

300,314

Lease liabilities

108,941

115,374

Convertible senior notes, net

350,921

343,825

Deferred revenue, net

5,652

vii,237

Other liabilities

6,492

ten,201

Total liabilities

703,157

776,951

STOCKHOLDERS’ EQUITY:

Common stock

eight

8

Additional paid-in upper-case letter

i,687,982

1,617,204

Accumulated other comprehensive income (loss)

(12,014

)

(6,218

)

Retained earnings (accumulated deficit)

(195,508

)

(66,100

)

Total stockholders’ equity

ane,480,468

one,544,894

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

ii,183,625

$

two,321,845

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands except share and per share data)

3 Months Ended Jan 31,

6 Months Ended January 31,

2022

2021

2022

2021

Revenue:

Subscription and support

$

84,297

$

59,563

$

163,287

$

117,529

License

69,798

77,912

109,951

143,195

Services

50,538

42,587

97,329

89,140

Full acquirement

204,633

180,062

370,567

349,864

Toll of acquirement(1):

Subscription and support

50,565

40,158

100,896

77,164

License

2,254

2,834

iv,593

5,771

Services

55,165

48,910

105,674

99,934

Total cost of revenue

107,984

91,902

211,163

182,869

Gross profit:

Subscription and back up

33,732

xix,405

62,391

40,365

License

67,544

75,078

105,358

137,424

Services

(4,627

)

(6,323

)

(8,345

)

(x,794

)

Total gross profit

96,649

88,160

159,404

166,995

Operating expenses(1):

Research and development

threescore,403

53,194

120,329

105,809

Sales and marketing

51,167

39,216

94,798

75,860

General and administrative

24,536

22,820

49,111

44,000

Total operating expenses

136,106

115,230

264,238

225,669

Income (loss) from operations

(39,457

)

(27,070

)

(104,834

)

(58,674

)

Interest income

699

2,015

one,373

4,804

Interest expense

(four,833

)

(4,651

)

(nine,627

)

(ix,271

)

Other income (expense), net

(8,045

)

vi,805

(6,862

)

9,373

Income (loss) before provision for (benefit from) income taxes

(51,636

)

(22,901

)

(119,950

)

(53,768

)

Provision for (benefit from) income taxes

(10,955

)

(fourteen,249

)

(27,993

)

(24,926

)

Cyberspace income (loss)

$

(forty,681

)

$

(8,652

)

$

(91,957

)

$

(28,842

)

Net income (loss) per share:

Basic

$

(0.49

)

$

(0.10

)

$

(1.10

)

$

(0.34

)

Diluted

$

(0.49

)

$

(0.10

)

$

(1.10

)

$

(0.34

)

Shares used in computing net income (loss) per share:

Basic

83,413,643

83,830,624

83,430,693

83,737,889

Diluted

83,413,643

83,830,624

83,430,693

83,737,889

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(1)

Amounts include stock-based bounty expense as follows:

Three Months Ended January 31,

Six Months Concluded January 31,

2022

2021

2022

2021

(unaudited, in thousands)

Stock-based compensation expense:

Cost of subscription and support revenue

$

3,773

$

2,954

$

7,121

$

5,556

Price of license revenue

189

145

371

396

Cost of services acquirement

6,081

5,578

11,718

11,121

Research and development

9,433

vii,604

18,047

14,851

Sales and marketing

10,825

6,806

18,314

12,783

Full general and authoritative

vii,564

6,809

xiv,534

13,273

Total stock-based compensation expense

$

37,865

$

29,896

$

70,105

$

57,980

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Three Months Ended January 31,

Six Months Ended January 31,

2022

2021

2022

2021

Greenbacks FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

(40,681

)

$

(8,652

)

$

(91,957

)

$

(28,842

)

Adjustments to reconcile net income (loss) to cyberspace cash provided by (used in) operating activities:

Depreciation and amortization

8,545

10,434

16,979

20,971

Amortization of debt discount and issuance costs

3,572

three,380

7,096

6,715

Acquittal of contract costs

3,309

3,201

6,310

5,355

Stock-based bounty

37,865

29,896

seventy,105

57,980

Changes to allowance for credit losses and acquirement reserves

122

161

157

118

Deferred income tax

(12,698

)

(8,467

)

(30,249

)

(twenty,294

)

Amortization of premium (accession of discount) on available-for-sale securities, cyberspace

ane,714

1,738

iii,315

3,128

Other non-cash items affecting net income (loss)

97

810

228

800

Changes in operating assets and liabilities:

Accounts receivable

(32,028

)

(13,556

)

(7,940

)

22,368

Unbilled accounts receivable

5,689

(six,844

)

(448

)

(32,058

)

Prepaid expenses and other assets

(6,289

)

(1,600

)

(13,335

)

(3,441

)

Operating lease assets

ii,788

4,672

v,667

91

Accounts payable

(378

)

(ii,114

)

(one,711

)

(4,312

)

Accrued employee compensation

15,314

17,357

(47,323

)

3,844

Deferred acquirement

12,630

(765

)

(17,826

)

(24,411

)

Charter liabilities

(iii,431

)

(iv,103

)

(six,817

)

ii,669

Other liabilities

850

(12,219

)

(two,303

)

(thirteen,059

)

Internet cash provided past (used in) operating activities

(iii,010

)

13,329

(110,052

)

(two,378

)

Cash FLOWS FROM INVESTING ACTIVITIES:

Purchases of bachelor-for-auction securities

(125,867

)

(177,196

)

(367,114

)

(523,601

)

Sales of available-for-sale securities

23,030

27,650

50,361

85,553

Maturities of bachelor-for-auction securities

142,322

214,607

415,265

456,198

Purchases of belongings and equipment

(3,657

)

(three,610

)

(six,990

)

(v,517

)

Capitalized software development costs

(2,414

)

(2,303

)

(6,197

)

(iv,884

)

Acquisition of strategic investments

(x,521

)

(10,521

)

(two,000

)

Acquisition of business, net of acquired cash

(43,830

)

Cyberspace cash provided by (used in) investing activities

22,893

59,148

30,974

five,749

Cash FLOWS FROM FINANCING ACTIVITIES:

Gain from issuance of common stock upon exercise of stock options

81

104

98

one,820

Repurchase and retirement of common stock

(11,189

)

(37,679

)

(37,451

)

(42,679

)

Net greenbacks provided by (used in) financing activities

(11,108

)

(37,575

)

(37,353

)

(40,859

)

Consequence of foreign commutation rate changes on cash, greenbacks equivalents, and restricted cash

(ane,823

)

2,649

(2,807

)

1,906

Cyberspace INCREASE (DECREASE) IN CASH, Greenbacks EQUIVALENTS, AND RESTRICTED CASH

vi,952

37,551

(119,238

)

(35,582

)

CASH, CASH EQUIVALENTS, AND RESTRICTED Greenbacks—Beginning of period

258,720

293,836

384,910

366,969

CASH, CASH EQUIVALENTS, AND RESTRICTED Cash—End of period

$

265,672

$

331,387

$

265,672

$

331,387

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited, in thousands)

The following tables reconcile the specific items excluded from GAAP in the adding of non-GAAP financial measures for the periods indicated below:

Three Months Concluded January 31,

Vi Months Ended January 31,

2022

2021

2022

2021

Gross turn a profit reconciliation:

GAAP gross profit

$

96,649

$

88,160

$

159,404

$

166,995

Not-GAAP adjustments:

Stock-based compensation

10,043

viii,677

19,210

17,073

Amortization of intangibles

1,905

4,526

3,849

9,052

COVID-nineteen Canada Emergency Wage Subsidy benefit
(i)

(968

)

(968

)

Non-GAAP gross turn a profit

$

108,597

$

100,395

$

182,463

$

192,152

Income (loss) from operations reconciliation:

GAAP income (loss) from operations

$

(39,457

)

$

(27,070

)

$

(104,834

)

$

(58,674

)

Non-GAAP adjustments:

Stock-based compensation

37,865

29,896

seventy,105

57,980

Amortization of intangibles

3,770

6,323

7,524

12,646

COVID-19 Canada Emergency Wage Subsidy benefit
(1)

(1,686

)

(1,686

)

Conquering consideration holdback
(2)

836

one,509

Non-GAAP income (loss) from operations

$

3,014

$

7,463

$

(25,696

)

$

ten,266

Net income (loss) reconciliation:

GAAP net income (loss)

$

(40,681

)

$

(8,652

)

$

(91,957

)

$

(28,842

)

Not-GAAP adjustments:

Stock-based compensation

37,865

29,896

70,105

57,980

Amortization of intangibles

3,770

6,323

seven,524

12,646

Amortization of debt discount and issuance costs

3,572

3,379

7,096

6,714

COVID-nineteen Canada Emergency Wage Subsidy do good
(1)

(1,686

)

(one,686

)

Acquisition consideration holdback
(2)

836

1,509

Tax bear upon of non-GAAP adjustments
(3)

(10,165

)

(20,232

)

(17,131

)

(23,375

)

Non-GAAP cyberspace income (loss)

$

(four,803

)

$

9,028

$

(22,854

)

$

23,437

Tax provision (benefit) reconciliation:

GAAP tax provision (benefit)

$

(ten,955

)

$

(14,249

)

$

(27,993

)

$

(24,926

)

Non-GAAP adjustments:

Stock-based compensation

5,347

8,138

16,895

(14,153

)

Acquittal of intangibles

532

1,721

i,877

(three,298

)

Acquittal of debt disbelieve and issuance costs

504

920

1,766

(1,727

)

COVID-xix Canada Emergency Wage Subsidy benefit
(i)

(459

)

(459

)

Acquisition consideration holdback
(2)

118

359

Tax impact of non-GAAP adjustments
(3)

iii,664

9,912

(three,766

)

43,012

Non-GAAP revenue enhancement provision (benefit)

$

(790

)

$

five,983

$

(ten,862

)

$

(1,551

)

Contacts

Investor Contact:

Alex Hughes

Guidewire Software, Inc.

(650) 356-4921

ir@guidewire.com

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