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Guidewire Announces Third Quarter Fiscal Year 2024 Financial Results

Guidewire (NYSE: GWRE) today announced its financial results for the fiscal quarter ended April 30, 2024.

“Our outstanding third quarter results were driven by strong Tier-1 deal volume and an acceleration in migration activity, particularly in Asia Pacific,” said Mike Rosenbaum, chief executive officer, Guidewire. “Our dedication to continuous innovation and frequent product releases is not only maturing the Guidewire Cloud Platform but also driving global engagement, reinforcing our confidence in delivering on our pipeline and strategic objectives.”

“In the third quarter, we exceeded expectations for ARR, revenue, and operating income, fueled by eight cloud deals that contributed to a 33% increase in InsuranceSuite cloud wins year-to-date,” said Jeff Cooper, chief financial officer, Guidewire.

Third Quarter Fiscal Year 2024 Financial Highlights

Revenue

  • Total revenue for the third quarter of fiscal year 2024 was $240.7 million, an increase of 16% from the same quarter in fiscal year 2023. Subscription and support revenue was $138.0 million, an increase of 28%; license revenue was $56.2 million, an increase of 11%; and services revenue was $46.5 million, a decrease of 6%, each as compared to the same quarter in fiscal year 2023.
  • As of April 30, 2024, annual recurring revenue, or ARR, was $828 million, compared to $763 million as of July 31, 2023. ARR results for interim quarterly periods in fiscal year 2024 are based on actual currency rates at the end of fiscal year 2023, held constant throughout the year.

Profitability

  • GAAP loss from operations was $16.7 million for the third quarter of fiscal year 2024, compared with GAAP loss from operations of $57.8 million for the same quarter in fiscal year 2023.
  • Non-GAAP income from operations was $20.8 million for the third quarter of fiscal year 2024, compared with non-GAAP loss from operations of $12.2 million for the same quarter in fiscal year 2023.
  • GAAP net loss was $5.5 million for the third quarter of fiscal year 2024, compared with GAAP net loss of $45.6 million for the same quarter in fiscal year 2023. GAAP net loss per share was $0.07, based on diluted weighted average shares outstanding of 82.5 million, compared to a GAAP net loss per share of $0.56 for the same quarter in fiscal year 2023, based on diluted weighted average shares outstanding of 81.8 million.
  • Non-GAAP net income was $21.7 million for the third quarter of fiscal year 2024, compared with non-GAAP net loss of $6.4 million for the same quarter in fiscal year 2023. Non-GAAP net income per share was $0.26, based on diluted weighted average shares outstanding of 84.0 million, compared to a non-GAAP net loss per share of $0.08 for the same quarter in fiscal year 2023, based on diluted weighted average shares outstanding of 81.8 million.

Liquidity and Capital Resources

  • Guidewire had $934.2 million in cash, cash equivalents, and investments at April 30, 2024, compared to $927.5 million at July 31, 2023. Guidewire generated $2.0 million in cash from operations during the nine months ended April 30, 2024.

Business Outlook

Guidewire is issuing the following outlook for the fourth quarter of fiscal year 2024 based on current expectations:

  • ARR between $856 million and $864 million
  • Total revenue between $279 million and $287 million
  • Operating income between $5 million and $13 million
  • Non-GAAP operating income between $43 million and $51 million

Guidewire is updating the following outlook for fiscal year 2024 based on current expectations as follows:

  • ARR between $856 million and $864 million
  • Total revenue between $968 million and $976 million
  • Operating loss between $58 million and $50 million
  • Non-GAAP operating income between $94 million and $102 million
  • Operating cash flow between $130 million and $150 million

Conference Call Information

What:

Guidewire Third Quarter Fiscal Year 2024 Financial Results Conference Call

When:

Tuesday, June 4, 2024

Time:

2:00 p.m. PT (5:00 p.m. ET)

Live Call:

(877) 704-4453, Domestic

Live Call:

(201) 389-0920, International

Replay:

(844) 512-2921, Passcode 13745798, Domestic

Replay

(412) 317-6671, Passcode 13745798, International

Webcast:

http://ir.guidewire.com/ (live and replay)

The webcast will be archived on Guidewire’s website (www.guidewire.com) for a period of three months.

Non-GAAP Financial Measures and Other Metrics

This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP tax provision (benefit), non-GAAP net income (loss) per share, and free cash flow. Non-GAAP gross profit and non-GAAP income (loss) from operations exclude stock-based compensation, amortization of intangibles, net impact of assignment of lease agreement, and acquisition consideration holdback. Non-GAAP net income (loss) and non-GAAP tax provision (benefit) also exclude the amortization of debt issuance costs from our convertible senior notes, gain on sale of strategic investment, changes in fair value of strategic investments, and related tax effects of the non-GAAP adjustments. Additionally, non-GAAP net income (loss) per share includes shares from the conversion premium and excludes the tax-effected interest expense on convertible debt using the if-converted method. Free cash flow consists of net cash flow provided by (used in) operating activities less cash used for purchases of property and equipment and capitalized software development costs. These non-GAAP measures enable us to analyze our financial performance without the effects of certain non-cash items such as amortization and stock-based compensation.

Annual recurring revenue (“ARR”) is used to quantify the annualized recurring value outlined in active customer contracts at the end of a reporting period. ARR includes the annualized recurring value of term licenses, subscription agreements, support contracts, and hosting agreements based on customer contractual terms and invoicing activities for the current reporting period, which may not be the same as the timing and amount of revenue recognized. ARR reflects all fee changes due to contract renewals, non-renewals, expansion, cancellations, attrition, or renegotiations at a higher or lower fee arrangement that are effective as of the ARR reporting date. All components of the licensing and other arrangements that are not expected to recur (primarily perpetual licenses and professional services) are excluded from our ARR calculations. In some arrangements with multiple performance obligations, a portion of recurring license and support or subscription contract value is allocated to services revenue for revenue recognition purposes, but does not get allocated for purposes of calculating ARR. This revenue allocation generally only impacts the initial term of the contract. This means that as we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value will be recognized as services revenue, but our reported ARR amount will not be impacted. During the nine months ended April 30, 2024, the recurring license and support or subscription contract value recognized as services revenue was $7.3 million.

Guidewire believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Guidewire’s financial condition and results of operations. Guidewire’s management uses these non-GAAP measures and other metrics to compare the Company’s performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation, and for budgeting and planning purposes. Guidewire believes that the use of these non-GAAP financial measures and other metrics provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing Guidewire’s financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors.

Guidewire's management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in Guidewire’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Guidewire urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including the financial tables at the end of this press release, and not to rely on any single financial measure to evaluate Guidewire’s business.

About Guidewire

Guidewire is the platform P&C insurers trust to engage, innovate, and grow efficiently. We combine digital, core, analytics, and machine learning to deliver our platform as a cloud service. More than 540 insurers in 40 countries, from new ventures to the largest and most complex in the world, run on Guidewire.

As a partner to our customers, we continually evolve to enable their success. We are proud of our unparalleled implementation track record, with more than 1,600 successful projects, supported by the largest R&D team and partner ecosystem in the industry. Our marketplace provides hundreds of applications that accelerate integration, localization, and innovation.

Guidewire uses its Investor Relations website (ir.guidewire.com), X (formerly known as Twitter) feed (@Guidewire_PandC), and LinkedIn page (www.linkedin.com/company/guidewire-software) as a means of disclosing information about the company and for complying with its disclosure obligations under Regulation FD. The information that is posted through these channels may be deemed material. Accordingly, investors should monitor these channels in addition to Guidewire’s press releases, SEC filings, public conference calls, and webcasts.

NOTE: For information about Guidewire’s trademarks, visit www.guidewire.com/legal-notices.

Cautionary Language Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and targets, our future business momentum relating to our cloud deals, cloud migration, product innovation, and profitability expectations, and our associated business plan, vision and strategy. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Guidewire’s control. Guidewire’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Guidewire’s most recent Forms 10-K and 10-Q filed with the Securities and Exchange Commission as well as other documents that may be filed by Guidewire from time to time with the Securities and Exchange Commission. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: quarterly and annual operating results may fluctuate more than expected; seasonal and other variations related to our customer agreements and related revenue recognition may cause significant fluctuations in our results of operations, ARR, and cash flows; our reliance on sales to and renewals from a relatively small number of large customers for a substantial portion of our revenue and ARR; our ability to successfully manage any changes to our business model, including the transition of our products to cloud offerings and the costs related to cloud operations, cybersecurity, product development, and services; the timing, success, and number of professional services engagements and the billing rates and utilization of our professional services employees and contractors; recent global events (including, without limitation, ongoing conflicts such as the wars between Israel and Hamas and between Russia and Ukraine, escalating tensions in the South China Sea, high inflation, economic volatility, bank failures and associated financial instability and crises, and supply chain issues) and their impact on our employees and our business and the businesses of our customers, system integrator (“SI”) partners, and vendors; data security breaches of our cloud-based products or unauthorized access to our employees’ or our customers’ data; our competitive environment and changes thereto; issues in the development and use of artificial intelligence and machine learning combined with an uncertain regulatory environment; our services revenue produces lower gross margins than our license, subscription and support revenue; our product development and sales cycles are lengthy and may be affected by factors outside of our control; the impact of new regulations and laws (including, without limitation, security, privacy, artificial intelligence and machine learning, tax regulations and laws, and accounting standards); assertions by third parties that we violate their intellectual property rights; weakened global economic conditions may adversely affect the P&C insurance industry, including the rate of information technology spending; general political or destabilizing events, including war, conflict or acts of terrorism; our ability to sell our products is highly dependent on the quality of our professional services and SI partners; the risk of losing key employees; the challenges of international operations, including changes in foreign exchange rates in countries such as Argentina; and other risks and uncertainties. Past performance is not indicative of future results. The forward-looking statements included in this press release represent Guidewire’s views as of the date of this press release. Guidewire anticipates that subsequent events and developments will cause its views to change. Guidewire undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Guidewire’s views as of any date subsequent to the date of this press release.

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

 

 

 

 

 

April 30,

2024

 

July 31,

2023

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

359,600

 

 

$

401,813

 

Short-term investments

 

422,691

 

 

 

396,872

 

Accounts receivable, net

 

104,344

 

 

 

151,034

 

Unbilled accounts receivable, net

 

125,531

 

 

 

87,752

 

Prepaid expenses and other current assets

 

69,345

 

 

 

62,132

 

Total current assets

 

1,081,511

 

 

 

1,099,603

 

Long-term investments

 

151,891

 

 

 

128,782

 

Unbilled accounts receivable, net

 

7,288

 

 

 

11,112

 

Property and equipment, net

 

55,025

 

 

 

54,499

 

Operating lease assets

 

46,267

 

 

 

52,373

 

Intangible assets, net

 

10,372

 

 

 

14,473

 

Goodwill

 

372,214

 

 

 

372,214

 

Deferred tax assets, net

 

255,547

 

 

 

226,875

 

Other assets

 

59,910

 

 

 

67,957

 

TOTAL ASSETS

$

2,040,025

 

 

$

2,027,888

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

23,514

 

 

$

34,627

 

Accrued employee compensation

 

76,538

 

 

 

103,980

 

Deferred revenue, net

 

181,689

 

 

 

206,923

 

Convertible senior notes, net

 

398,467

 

 

 

 

Other current liabilities

 

24,599

 

 

 

27,731

 

Total current liabilities

 

704,807

 

 

 

373,261

 

Lease liabilities

 

37,120

 

 

 

42,972

 

Convertible senior notes, net

 

 

 

 

397,171

 

Deferred revenue, net

 

3,210

 

 

 

5,988

 

Other liabilities

 

9,522

 

 

 

9,030

 

Total liabilities

 

754,659

 

 

 

828,422

 

STOCKHOLDERS’ EQUITY:

 

 

 

Common stock

 

8

 

 

 

8

 

Additional paid-in capital

 

1,940,691

 

 

 

1,831,267

 

Accumulated other comprehensive income (loss)

 

(14,521

)

 

 

(13,859

)

Retained earnings (accumulated deficit)

 

(640,812

)

 

 

(617,950

)

Total stockholders’ equity

 

1,285,366

 

 

 

1,199,466

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

2,040,025

 

 

$

2,027,888

 

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands except share and per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2024

 

2023

 

2024

 

2023

Revenue:

 

 

 

 

 

 

 

Subscription and support

$

137,970

 

 

$

107,499

 

 

$

397,239

 

 

$

312,321

 

License

 

56,210

 

 

 

50,602

 

 

 

161,318

 

 

 

164,669

 

Services

 

46,498

 

 

 

49,389

 

 

 

130,425

 

 

 

158,393

 

Total revenue

 

240,678

 

 

 

207,490

 

 

 

688,982

 

 

 

635,383

 

Cost of revenue(1):

 

 

 

 

 

 

 

Subscription and support

 

51,185

 

 

 

52,281

 

 

 

149,173

 

 

 

156,896

 

License

 

837

 

 

 

1,243

 

 

 

3,539

 

 

 

4,961

 

Services

 

46,429

 

 

 

55,048

 

 

 

139,345

 

 

 

178,993

 

Total cost of revenue

 

98,451

 

 

 

108,572

 

 

 

292,057

 

 

 

340,850

 

Gross profit:

 

 

 

 

 

 

 

Subscription and support

 

86,785

 

 

 

55,218

 

 

 

248,066

 

 

 

155,425

 

License

 

55,373

 

 

 

49,359

 

 

 

157,779

 

 

 

159,708

 

Services

 

69

 

 

 

(5,659

)

 

 

(8,920

)

 

 

(20,600

)

Total gross profit

 

142,227

 

 

 

98,918

 

 

 

396,925

 

 

 

294,533

 

Operating expenses(1):

 

 

 

 

 

 

 

Research and development

 

66,134

 

 

 

63,055

 

 

 

194,061

 

 

 

182,927

 

Sales and marketing

 

50,487

 

 

 

46,864

 

 

 

144,249

 

 

 

138,113

 

General and administrative

 

42,302

 

 

 

46,815

 

 

 

121,502

 

 

 

129,078

 

Total operating expenses

 

158,923

 

 

 

156,734

 

 

 

459,812

 

 

 

450,118

 

Income (loss) from operations

 

(16,696

)

 

 

(57,816

)

 

 

(62,887

)

 

 

(155,585

)

Interest income

 

10,824

 

 

 

6,627

 

 

 

31,727

 

 

 

16,657

 

Interest expense

 

(1,686

)

 

 

(1,683

)

 

 

(5,061

)

 

 

(5,034

)

Other income (expense), net

 

(6,535

)

 

 

(3,356

)

 

 

(9,501

)

 

 

(5,889

)

Income (loss) before provision for (benefit from) income taxes

 

(14,093

)

 

 

(56,228

)

 

 

(45,722

)

 

 

(149,851

)

Provision for (benefit from) income taxes

 

(8,615

)

 

 

(10,660

)

 

 

(22,860

)

 

 

(25,776

)

Net income (loss)

$

(5,478

)

 

$

(45,568

)

 

$

(22,862

)

 

$

(124,075

)

Net income (loss) per share:

 

 

 

 

 

 

 

Basic and diluted

$

(0.07

)

 

$

(0.56

)

 

$

(0.28

)

 

$

(1.51

)

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

Basic and diluted

 

82,500,109

 

 

 

81,832,244

 

 

 

82,105,357

 

 

 

82,407,950

 

(1)Amounts include stock-based compensation expense as follows:

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2024

 

2023

 

2024

 

2023

Stock-based compensation expense:

 

 

 

 

 

 

 

Cost of subscription and support revenue

$

3,113

 

$

3,580

 

$

9,989

 

$

10,488

Cost of license revenue

 

72

 

 

93

 

 

220

 

 

359

Cost of services revenue

 

4,722

 

 

4,631

 

 

14,154

 

 

14,377

Research and development

 

10,003

 

 

10,084

 

 

30,127

 

 

29,676

Sales and marketing

 

9,354

 

 

7,432

 

 

25,273

 

 

22,343

General and administrative

 

9,386

 

 

9,199

 

 

29,411

 

 

29,051

Total stock-based compensation expense

$

36,650

 

$

35,019

 

$

109,174

 

$

106,294

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2024

 

2023

 

2024

 

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income (loss)

$

(5,478

)

 

$

(45,568

)

 

$

(22,862

)

 

$

(124,075

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

5,591

 

 

 

5,682

 

 

 

16,525

 

 

 

19,911

 

Amortization of debt issuance costs

 

434

 

 

 

426

 

 

 

1,296

 

 

 

1,274

 

Amortization of contract costs

 

4,124

 

 

 

4,403

 

 

 

12,869

 

 

 

13,000

 

Stock-based compensation

 

36,650

 

 

 

35,019

 

 

 

109,174

 

 

 

106,294

 

Changes to allowance for credit losses and revenue reserves

 

52

 

 

 

11

 

 

 

(142

)

 

 

(304

)

Deferred income tax

 

(11,904

)

 

 

(12,676

)

 

 

(29,294

)

 

 

(31,034

)

Amortization of premium (accretion of discount) on available-for-sale securities, net

 

(3,269

)

 

 

(1,736

)

 

 

(9,492

)

 

 

(2,458

)

Gain on sale of strategic investment

 

 

 

 

 

 

 

(1,758

)

 

 

 

Changes in fair value of strategic investments

 

(298

)

 

 

 

 

 

(298

)

 

 

 

Accelerated depreciation related to lease assignment

 

 

 

 

26,921

 

 

 

 

 

 

26,921

 

Gain from lease assignment

 

 

 

 

(18,419

)

 

 

 

 

 

(18,419

)

Other non-cash items affecting net income (loss)

 

(28

)

 

 

(391

)

 

 

(74

)

 

 

(315

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

23,729

 

 

 

(1,768

)

 

 

46,276

 

 

 

14,756

 

Unbilled accounts receivable

 

(35,057

)

 

 

(27,818

)

 

 

(33,955

)

 

 

(57,278

)

Prepaid expenses and other assets

 

(9,551

)

 

 

(7,898

)

 

 

(22,082

)

 

 

(12,718

)

Operating lease assets

 

2,060

 

 

 

(16,156

)

 

 

6,106

 

 

 

(11,348

)

Accounts payable

 

1,674

 

 

 

(4,436

)

 

 

(10,538

)

 

 

(6,725

)

Accrued employee compensation

 

14,053

 

 

 

14,147

 

 

 

(25,604

)

 

 

(18,392

)

Deferred revenue

 

(14,256

)

 

 

(3,069

)

 

 

(28,012

)

 

 

(29,360

)

Lease liabilities

 

(1,891

)

 

 

6,670

 

 

 

(5,136

)

 

 

953

 

Other liabilities

 

(1,832

)

 

 

(1,971

)

 

 

(1,028

)

 

 

(5,525

)

Net cash provided by (used in) operating activities

 

4,803

 

 

 

(48,627

)

 

 

1,971

 

 

 

(134,842

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Purchases of available-for-sale securities

 

(138,595

)

 

 

(88,494

)

 

 

(453,441

)

 

 

(358,823

)

Maturities and sales of available-for-sale securities

 

148,883

 

 

 

146,836

 

 

 

416,299

 

 

 

382,219

 

Purchases of property and equipment

 

(678

)

 

 

(677

)

 

 

(4,668

)

 

 

(2,614

)

Capitalized software development costs

 

(3,371

)

 

 

(2,759

)

 

 

(9,429

)

 

 

(8,877

)

Acquisition of strategic investments

 

(86

)

 

 

(2,210

)

 

 

(336

)

 

 

(8,051

)

Sale of strategic investment

 

 

 

 

 

 

 

6,508

 

 

 

 

Net cash provided by (used in) investing activities

 

6,153

 

 

 

52,696

 

 

 

(45,067

)

 

 

3,854

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds from issuance of common stock upon exercise of stock options

 

10

 

 

 

225

 

 

 

14

 

 

 

227

 

Repurchase and retirement of common stock

 

 

 

 

(13,993

)

 

 

 

 

 

(213,993

)

Net cash provided by (used in) financing activities

 

10

 

 

 

(13,768

)

 

 

14

 

 

 

(213,766

)

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

 

(1,354

)

 

 

(282

)

 

 

(2,915

)

 

 

1,659

 

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

9,612

 

 

 

(9,981

)

 

 

(45,997

)

 

 

(343,095

)

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period

 

351,181

 

 

 

281,572

 

 

 

406,790

 

 

 

614,686

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period

$

360,793

 

$

271,591

 

$

360,793

 

 

$

271,591

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited, in thousands)

 

 

 

 

 

 

 

 

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below:

 

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2024

 

2023

 

2024

 

2023

Gross profit reconciliation:

 

 

 

 

 

 

 

GAAP gross profit

$

142,227

 

 

$

98,918

 

 

$

396,925

 

 

$

294,533

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

 

7,907

 

 

 

8,304

 

 

 

24,363

 

 

 

25,224

 

Amortization of intangibles

 

485

 

 

 

485

 

 

 

1,455

 

 

 

2,875

 

Non-GAAP gross profit

$

150,619

 

 

$

107,707

 

 

$

422,743

 

 

$

322,632

 

 

 

 

 

 

 

 

 

Income (loss) from operations reconciliation:

 

 

 

 

 

 

 

GAAP income (loss) from operations

$

(16,696

)

 

$

(57,816

)

 

$

(62,887

)

 

$

(155,585

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

 

36,650

 

 

 

35,019

 

 

 

109,174

 

 

 

106,294

 

Amortization of intangibles

 

1,367

 

 

 

1,367

 

 

 

4,101

 

 

 

5,521

 

Acquisition consideration holdback

 

(542

)

 

 

706

 

 

 

143

 

 

 

2,209

 

Net impact of assignment of lease agreement

 

 

 

 

8,502

 

 

 

 

 

 

8,502

 

Non-GAAP income (loss) from operations

$

20,779

 

 

$

(12,222

)

 

$

50,531

 

 

$

(33,059

)

 

 

 

 

 

 

 

 

Net income (loss) reconciliation:

 

 

 

 

 

 

 

GAAP net income (loss)

$

(5,478

)

 

$

(45,568

)

 

$

(22,862

)

 

$

(124,075

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

 

36,650

 

 

 

35,019

 

 

 

109,174

 

 

 

106,294

 

Amortization of intangibles

 

1,367

 

 

 

1,367

 

 

 

4,101

 

 

 

5,521

 

Acquisition consideration holdback

 

(542

)

 

 

706

 

 

 

143

 

 

 

2,209

 

Amortization of debt issuance costs

 

434

 

 

 

426

 

 

 

1,296

 

 

 

1,274

 

Changes in fair value of strategic investments

 

(298

)

 

 

 

 

 

(298

)

 

 

 

Gain on sale of strategic investment

 

 

 

 

 

 

 

(1,809

)

 

 

 

Net impact of assignment of lease agreement

 

 

 

 

8,502

 

 

 

 

 

 

8,502

 

Tax impact of non-GAAP adjustments

 

(10,469

)

 

 

(6,824

)

 

 

(29,289

)

 

 

(33,309

)

Non-GAAP net income (loss)

$

21,664

 

 

$

(6,372

)

 

$

60,456

 

 

$

(33,584

)

 

 

 

 

 

 

 

 

Tax provision (benefit) reconciliation:

 

 

 

 

 

 

 

GAAP tax provision (benefit)

$

(8,615

)

 

$

(10,660

)

 

$

(22,860

)

 

$

(25,776

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

 

2,890

 

 

 

13,163

 

 

 

10,108

 

 

 

97,554

 

Amortization of intangibles

 

108

 

 

 

514

 

 

 

380

 

 

 

4,853

 

Acquisition consideration holdback

 

(43

)

 

 

265

 

 

 

25

 

 

 

2,018

 

Amortization of debt issuance costs

 

34

 

 

 

160

 

 

 

120

 

 

 

1,160

 

Changes in fair value of strategic investments

 

(23

)

 

 

 

 

 

(23

)

 

 

 

Gain on sale of strategic investment

 

 

 

 

 

 

 

(191

)

 

 

 

Net impact of assignment of lease agreement

 

 

 

 

3,196

 

 

 

 

 

 

3,196

 

Tax impact of non-GAAP adjustments

 

7,503

 

 

 

(10,474

)

 

 

18,870

 

 

 

(75,472

)

Non-GAAP tax provision (benefit)

$

1,854

 

 

$

(3,836

)

 

$

6,429

 

 

$

7,533

 

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited, in thousands except share and per share data)

 

 

 

 

 

 

 

 

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below:

 

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

Net income (loss) per share reconciliation:

 

 

 

 

 

 

 

GAAP net income (loss) per share – diluted

$

(0.07

)

 

$

(0.56

)

 

$

(0.28

)

 

$

(1.51

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

 

0.44

 

 

 

0.43

 

 

 

1.31

 

 

 

1.29

 

Amortization of intangibles

 

0.02

 

 

 

0.02

 

 

 

0.05

 

 

 

0.07

 

Acquisition consideration holdback

 

(0.01

)

 

 

0.01

 

 

 

 

 

 

0.03

 

Amortization of debt issuance costs

 

0.01

 

 

 

0.01

 

 

 

0.02

 

 

 

0.03

 

Changes in fair value of strategic investments

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of strategic investment

 

 

 

 

 

 

 

(0.02

)

 

 

 

Net impact of assignment of lease agreement

 

 

 

 

0.10

 

 

 

 

 

 

0.10

 

Tax impact of non-GAAP adjustments

 

(0.13

)

 

 

(0.09

)

 

 

(0.35

)

 

 

(0.43

)

Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation

 

 

 

 

 

 

 

(0.01

)

 

 

 

Non-GAAP net income (loss) per share – diluted

$

0.26

 

 

$

(0.08

)

 

$

0.72

 

 

$

(0.42

)

 

 

 

 

 

 

 

 

Shares used in computing Non-GAAP income (loss) per share amounts:

 

 

 

 

 

 

 

GAAP weighted average shares – diluted

 

82,500,109

 

 

 

81,832,244

 

 

 

82,105,357

 

 

 

82,407,950

 

Non-GAAP dilutive shares excluded from GAAP income (loss) per share calculation

 

1,453,086

 

 

 

 

 

 

1,293,859

 

 

 

 

Pro forma weighted average shares — diluted

 

83,953,195

 

 

 

81,832,244

 

 

 

83,399,216

 

 

 

82,407,950

 

The following table summarizes our free cash flow for the periods indicated below:

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2024

 

2023

 

2024

 

2023

Free cash flow:

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

4,803

 

 

$

(48,627

)

 

$

1,971

 

 

$

(134,842

)

Purchases of property and equipment

 

(678

)

 

 

(677

)

 

 

(4,668

)

 

 

(2,614

)

Capitalized software development costs

 

(3,371

)

 

 

(2,759

)

 

 

(9,429

)

 

 

(8,877

)

Free cash flow

$

754

 

 

$

(52,063

)

 

$

(12,126

)

 

$

(146,333

)

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Outlook

 

The following table reconciles the specific items excluded from GAAP outlook in the calculation of non-GAAP outlook for the periods indicated below (in millions):

 

 

Fourth Quarter

Fiscal Year 2024

 

Fiscal Year 2024

Income (loss) from operations outlook reconciliation:

 

 

 

 

 

 

 

GAAP income (loss) from operations

$5

$13

 

$(58)

$(50)

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

37

37

 

147

147

Amortization of intangibles

1

1

 

5

5

Non-GAAP income (loss) from operations

$43

$51

 

$94

$102

 

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