Quick Verdict
Guidewire Software Q4 FY2026 Earnings were closely watched as Guidewire reported Q4 FY2026 non-GAAP EPS of $0.99, beating consensus by roughly $0.06, while revenue reached $411.1 million, above expectations of about $402.7 million. Despite the operational beat, GWRE shares fell about 15% after hours as investors focused on a perceived moderation in ARR growth implied by FY2027 guidance.
About Guidewire Software
Guidewire Software, Inc. (NYSE: GWRE) is a San Mateo, California-based provider of cloud software platforms for property-and-casualty, or P&C, insurers. Founded in 2001, the company supplies insurers with core systems for policy administration, billing, claims management, digital engagement, data and analytics, and artificial-intelligence-enabled workflows. Its platform supports more than 570 insurers across 44 countries, according to the company’s FY2026 earnings release
Guidewire entered the earnings announcement with an approximately $16.7 billion–$16.9 billion market capitalization, based on the September 3 regular-session share price near $202.86. Market data sources placed its trailing P/E ratio at roughly 104x–108x, while the company does not pay a dividend. Public market profiles report approximately 4,049 employees, although employee counts can vary by reporting methodology and update timing.
The company’s investment case is increasingly centered on subscription-and-support growth, expansion in annual recurring revenue (ARR), cloud adoption, and AI-related product demand. FY2026 results showed strong recurring-revenue momentum, but the market reacted negatively to guidance suggesting that ARR growth could ease modestly in FY2027.
Top Financial Highlights
- Q4 FY2026 total revenue rose 15% year over year to $411.1 million, ahead of Wall Street revenue expectations of approximately $402.7 million.
- Q4 non-GAAP diluted EPS was $0.99, up from $0.81 a year earlier and about $0.06 above the reported analyst consensus of $0.93.
- Q4 GAAP diluted EPS was $0.38, down from $0.60 in Q4 FY2025, primarily reflecting a $24.0 million foreign-exchange loss versus a $2.8 million foreign-exchange gain in the prior-year quarter.
- Q4 GAAP net income was $31.4 million, compared with $52.0 million in Q4 FY2025; non-GAAP net income increased to $83.1 million from $70.3 million.
- Subscription and support revenue climbed 32% to $266.7 million, representing roughly 65% of quarterly revenue.
- License revenue fell 18% to $77.1 million, reinforcing the continuing shift in revenue mix toward subscriptions and support.
- Services revenue increased 10% to $67.3 million.
- Q4 GAAP gross profit totaled $269.7 million, equal to a GAAP gross margin of approximately 65.6%; non-GAAP gross margin was 68%, according to the earnings supplemental.
- Q4 GAAP operating income more than doubled to $62.3 million, versus $29.6 million a year earlier; non-GAAP operating income rose 51% to $111.3 million.
- Q4 operating cash flow was $283.9 million, compared with $244.8 million in Q4 FY2025.
- FY2026 total revenue increased 23% to $1.475 billion, including subscription and support revenue of $970.9 million, up 33%.
- Ending FY2026 ARR was $1.242 billion on a constant-currency basis, up 19% year over year; fully ramped ARR was $1.578 billion, up 22%.
- Cash, cash equivalents, and investments totaled $1.215 billion as of July 31, 2026.
- FY2026 operating cash flow increased to $389.7 million, while free cash flow was $358.7 million.
- Guidewire repurchased 4.09 million shares during FY2026 for $606.3 million, at an average price of $148.41 per share; $31.9 million remained under its repurchase authorization at year-end.
- For Q1 FY2027, management guided for total revenue of $372 million–$378 million, subscription-and-support revenue of $279 million–$283 million, and ending ARR of $1.253 billion–$1.259 billion.
- For FY2027, Guidewire projected total revenue of $1.707 billion–$1.727 billion, ending ARR of $1.450 billion–$1.460 billion, and operating cash flow of $445 million–$465 million.
Beat or Miss?
Guidewire delivered a quarterly revenue and adjusted EPS beat. The key investor concern was not the reported quarter, but the outlook: FY2027 ARR guidance pointed to approximately 18% constant-currency growth at the midpoint, slightly below FY2026’s 19% rate.
| Metric | Reported | Difference/Analysis |
| Q4 FY2026 total revenue | $411.1 million | Above consensus of about $402.7 million by roughly $8.4 million, or about 2.1% |
| Q4 FY2026 non-GAAP EPS | $0.99 | Above consensus of $0.93 by $0.06 per share, or about 6.5% |
| Q4 FY2026 GAAP EPS | $0.38 | Down from $0.60 in Q4 FY2025 due in part to a $24.0 million foreign-exchange loss |
| Q4 FY2026 subscription and support revenue | $266.7 million | Up 32% year over year, well above total-company revenue growth of 15% |
| FY2027 revenue guidance | $1.707 billion–$1.727 billion | Indicates continued growth, but investors appeared more focused on the pace of recurring-revenue expansion |
| FY2027 ending ARR guidance | $1.450 billion–$1.460 billion | Implies roughly 18% constant-currency ARR growth at midpoint, versus 19% in FY2026 |
What Leadership Is Saying
“We closed a great fourth quarter, capping off an incredible year of expanding demand. Customers are deepening their commitments to Guidewire’s core offerings and expanding with new pricing and AI focused products. AI is driving our momentum, as more of our insurance customers choose to align their AI transformation with Guidewire.” — Mike Rosenbaum, Chief Executive Officer
“Strong execution in fiscal year 2026 was visible in record sales activity and in the lowest ARR gross attrition rate since we started measuring ARR. In fiscal year 2026, we delivered growth rates of 19% for ARR, 22% for fully ramped ARR, and 23% for total revenue, while strong operational discipline led to cash flow from operations margin of 26%.” — Jeff Cooper, Chief Financial Officer
Historical Performance
| Category | Q4 FY2026 | Q4 FY2025 | Change (%) |
| Total revenue | $411.1 million | $356.6 million | 15.30% |
| Subscription and support revenue | $266.7 million | $201.9 million | 32.10% |
| License revenue | $77.1 million | $93.6 million | -17.70% |
| Services revenue | $67.3 million | $61.0 million | 10.20% |
| GAAP net income | $31.4 million | $52.0 million | -39.60% |
| Non-GAAP net income | $83.1 million | $70.3 million | 18.20% |
| GAAP operating income | $62.3 million | $29.6 million | 110.60% |
| Total operating expenses | $207.4 million | $202.2 million | 2.50% |
| Operating cash flow | $283.9 million | $244.8 million | 16.00% |
Note: GAAP net income declined despite higher operating income because Q4 FY2026 included a $24.0 million foreign-currency loss, compared with a $2.8 million foreign-currency gain in the prior-year quarter.
Competitor Context
Guidewire’s direct comparison with competitors should be treated carefully because public insurance-software companies use different reporting calendars, revenue definitions, customer mixes, and non-GAAP adjustments. The most relevant operational comparison is Guidewire’s own recurring-revenue mix: subscription-and-support revenue grew far faster than total revenue, while legacy license revenue declined.
| Category | Q4 FY2026 | Q4 FY2025 | Change (%) |
| Guidewire total revenue | $411.1 million | $356.6 million | 15.30% |
| Guidewire subscription and support revenue | $266.7 million | $201.9 million | 32.10% |
| Guidewire GAAP net income | $31.4 million | $52.0 million | -39.60% |
| Guidewire non-GAAP operating income | $111.3 million | $73.5 million | 51.40% |
| Guidewire FY-end ARR | $1.242 billion | $1.041 billion | 19.30% |
| Guidewire FY-end fully ramped ARR | $1.578 billion | $1.296 billion | 21.80% |
The revenue pattern shows why Guidewire is valued primarily as a recurring-revenue and cloud-platform company rather than as a conventional license-software vendor. Subscription and support accounted for about 65% of Q4 revenue and generated a GAAP gross margin of roughly 74%, while the services segment recorded a small GAAP gross loss in the quarter.
How the Market Reacted?
GWRE shares closed the September 3 regular session at $202.86, up 5.24%, before reversing sharply after the earnings release. Reported after-hours declines ranged from approximately 14.8% to 19.2%, with one contemporaneous report placing the share price near $172.20, or down 15.11% from the regular-session close.
The reaction suggests investors acknowledged the Q4 earnings and revenue beat but were dissatisfied with the implied deceleration in ARR growth. At the midpoint, FY2027 ARR guidance indicates approximately 18% constant-currency growth, marginally lower than FY2026’s 19% growth rate. Given Guidewire’s high valuation entering the release—market sources showed a P/E above 100x—investors appeared to demand stronger evidence of accelerating growth rather than merely continued strong execution.
