Guidewire Reports 24% Revenue Growth, Raises Full-Year Outlook After $148M Buyback
Guidewire ended Q2 with $1.35 billion in cash, repurchased $148 million of shares and authorized a new $500 million buyback, while revenue surged 24% to $359 million, exceeding guidance. Non-GAAP gross profit rose 28% to $243 million with a 68% margin, ARR climbed 22% to $1.121 billion (fully ramped ARR $1.42 billion), and management raised full-year revenue and ARR outlooks.
1. Financial Performance
Guidewire posted Q2 revenue of $359 million, up 24% year-over-year, driven by 33% growth in subscription and support revenue reaching $237 million and 30% services revenue at $62 million. Non-GAAP gross profit rose 28% to $243 million, with an overall gross margin of 68%, while operating cash flow was $112 million.
2. Recurring Revenue Metrics
Annual recurring revenue reached $1.121 billion, up 22% year-over-year, with fully ramped ARR at $1.42 billion reflecting multi-year contract ramps. Weighted average contract term for new InsuranceSuite deals extended to over six years, and remaining performance obligations climbed 63% to $3.5 billion.
3. Share Repurchase Authorization
The company repurchased $148 million of its shares under a newly authorized $500 million buyback program, leaving $490 million available and expects completion before fiscal year end. Guidewire held $1.35 billion in cash, cash equivalents, and investments at quarter-end.
4. Updated Full-Year Guidance
Management raised fiscal 2026 guidance to ARR of $1.229 billion–$1.237 billion (18%–19% growth) and total revenue of $1.438 billion–$1.448 billion (20% growth). Subscription gross margin is now expected at 74%, with non-GAAP operating income forecast at $293 million–$303 million.