Why Guidewire Software Stock Is Up Today

As the trading week ended, investors rallied Guidewire software (GWRE 13.02%) stock. The developer of software solutions for the insurance industry released quarterly results after market hours on Thursday, and its stock was a big hit the next day. As of mid-afternoon, they were up nearly 12%. This was a much better performance than the nearly 2% decline a S&P 500 index at that time.

A major income category saw a major jump

For the fourth quarter of fiscal 2024, ended July 31, Guidewire’s revenue was $291.5 million, which was up 5% year over year. More than half of this amount comes from subscription and support revenue; this increased by 29% to almost 152 million dollars. On the other hand, revenue from licenses and services both declined during this time period. The former was down 12% to just under $89 million, while the latter was down 2% to nearly $51 million.

Speaking of declines, non-GAAP (adjusted) net income eroded some from the year-ago quarter. It came in at $54 million, or $0.62 per share, up from nearly $63 million in the second quarter of fiscal 2023.

Either way, Guidewire easily beat consensus analyst estimates. On average, experts following the stock were modeling less than $284 million in revenue and just $0.54 per share in adjusted profitability.

A billion dollar year is expected

Guidewire limited its revenue release with select guidance for both the current quarter (first) and the full fiscal year 2025. For the year, it expects revenue of nearly $1.14 billion to just under $1.15 billion, with adjusted operating income of $157 million to $171 million. It did not provide any net income forecast.