Guidewire, a platform provider for property and casualty re/insurers, has reported a net income (GAAP) of $9.7 million for the second quarter of the fiscal year 2024, a notable turnaround from the net loss of $9.2 million for the same quarter in fiscal year 2023.
This quarter’s net income is also a substantial increase from the $27.1 million net loss reported in the first quarter of fiscal year 2024.
Despite the positive net income, Guidewire witnessed $12.4 million loss from operations, though this is still an improvement compared to the previous fiscal year’s loss of $23.2 million in the same quarter.
Guidewire’s total revenue increased by 4% compared to last year, reaching $240.9 million.
Most of the revenue came from subscription and support, which amounted to $131.6 million, up by 24% from last year. However, services revenue saw a 29% decrease at $38.2 million, and licence revenue was $71.1 million, down by 3%.
The annual recurring revenue (ARR) at the end of Q2 was $800 million, compared to $763 million at the end of July 2023.
Guidewire is updating its outlook for fiscal year 2024, with total revenue expected to be between $957 million and $967 million and an expected operating loss between $71 million and $61 million.
CEO Mike Rosenbaum emphasised the company’s success in Q2, stating, “Our strong performance in the second quarter was marked by eleven cloud deals, including a healthy mix of migrations, expansions, and net-new customers.”
Rosenbaum further highlights, “The enthusiasm and interest we’ve seen around Guidewire Cloud Platform is testament to our team’s hard work and our commitment to innovation and excellence.”
Jeff Cooper, chief financial officer at Guidewire, discussed the updated outlook for fiscal year 2024: “We are pleased with the continued cloud momentum, enabling us to beat and raise our ARR outlook and deliver 65% non-GAAP subscription and support gross margins in the quarter.”
“Our fiscal year 2024 revenue outlook change is due to lower expected services revenue, as we are seeing success with our SI partners leading more cloud engagements at a pace that is faster than we originally expected. We are maintaining our profitability outlook as strong subscription and support gross margin and operating expense discipline offset the impact of lower services revenue.” Cooper adds.
