Guidewire shares tumble on weak first quarter guidance

Investing.com -- Guidewire Software Inc (NYSE: GWRE) reported fourth quarter results that exceeded analyst expectations, but shares tumbled 19.2% in after-hours trading Thursday following disappointing revenue guidance for the first quarter of fiscal 2027.

The insurance software company posted adjusted earnings per share of $0.99 for the fourth quarter ended July 31, 2026, beating the analyst consensus of $0.93 by $0.06. Revenue reached $411.1 million, up 15% YoY and above the $402.7 million analyst estimate. However, the company's first quarter revenue guidance of $372 million to $378 million fell short of the $387.1 million consensus, with the midpoint of $375 million representing a 3% miss.

For fiscal 2027, Guidewire projected revenue of $1.707 billion to $1.727 billion, with the midpoint of $1.717 billion slightly above the $1.7 billion analyst consensus. The company expects first quarter adjusted operating income of $64 million to $70 million and full-year adjusted operating income of $403 million to $423 million.

"We closed a great fourth quarter, capping off an incredible year of expanding demand," said Mike Rosenbaum, chief executive officer. "Customers are deepening their commitments to Guidewire's core offerings and expanding with new pricing and AI focused products."

Subscription and support revenue grew 32% YoY to $266.7 million in the fourth quarter, while license revenue declined 18% to $77.1 million. Services revenue increased 10% to $67.3 million. Annual recurring revenue reached $1.237 billion as of July 31, 2026, representing 19% growth on a constant currency basis.

For fiscal 2026, total revenue increased 23% to $1.475 billion. The company generated $389.7 million in cash from operations during the year and repurchased 4.1 million shares for $606.3 million at an average price of $148.41.

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