By Guidewire Software stock (NYSE: GWRE) jumped 18% to a new all-time high on Friday after posting quarterly results that beat analyst expectations.
The company reported record Annual Recurring Revenue and issued a bullish revenue forecast for fiscal 2026.
Investors responded quickly, driving the stock higher, as confidence grew in Guidewire’s push into cloud-based insurance software.
Deal activity is picking up, and momentum in the Property & Casualty sector appears to be supporting the rally. Analysts say the results show the company is successfully turning its platform investments into recurring revenue streams.
Strong fiscal 2025 earnings drive Guidewire Software stock
Guidewire Software’s strong fourth-quarter results fueled Friday’s 18% jump in the stock.
The company reported $356.6 million in revenue for the quarter ended July, up 22.3% from a year ago and well above analyst estimates of roughly $338 million.
Earnings also surprised to the upside. Adjusted EPS came in at $0.84, compared with the $0.63 consensus, and up from $0.62 in the prior year.
Investors cheered the results as evidence of continued strength in Guidewire’s cloud-based insurance software business.
Guidewire Software hit a major milestone in its fourth quarter, with Annual Recurring Revenue climbing 19% to $1.032 billion on a constant currency basis.
The growth was driven by bigger deals and higher volume, including a new 10-year deal with Liberty Mutual.
Subscription and support revenue rose 33% to $201.9 million. License revenue added 5%, and services revenue increased 20%, showing gains across the board.
Investors cheered the results as evidence that Guidewire’s cloud platform is gaining traction and producing predictable revenue streams.
Guidewire Software said cloud margins are improving faster than expected, with subscription and support gross margin nearing 70%. The company said this strengthens confidence in its ability to deliver high-value cloud services.
License revenue rose just 1% as customers continue migrating to the cloud, but Guidewire remains optimistic about long-term growth in its cloud ecosystem.
The company is also investing in data analytics and AI-driven tools to improve pricing and claims management for insurers, a move analysts say could drive further momentum.
What analysts say?
Analysts are mostly positive on Guidewire Software stock following its strong fiscal 2025 results and upbeat guidance for fiscal 2026.
In a recent survey of eight firms, most carry “Outperform” or “Buy” ratings, with price targets lifted to between $275 and $300.
RBC Capital, Oppenheimer, Stifel, and Wells Fargo all cited strong ARR growth and strategic deals, including the 10-year alliance with Liberty Mutual, as reasons for their bullish stance.
The consensus rating stands at a Moderate Buy, with analysts confident in the company’s cloud transition and recurring revenue expansion, even as license revenue shows only modest gains.
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