Executive Summary
Executive overview: In QQ1 2025, Guidewire reported revenue of $262.9 million, up 26.8% year over year, but rose in a way that still produced an operating loss of $4.72 million despite a positive EBITDA of $10.68 million. The quarter delivered a net income of $9.14 million and basic earnings per share of $0.11, supported by a substantial other income line of $7.49 million and a tax benefit of $6.37 million. Gross margin remained robust at 60.25%, reflecting strong product economics, but operating leverage remained a challenge as investments in R&D, go-to-market initiatives, and cloud-related transition components weighed on current period profitability.
Key Performance Indicators
QoQ: -15.04% | YoY:41.05%
QoQ: -145.76% | YoY:86.03%
QoQ: -45.47% | YoY:133.76%
QoQ: -45.00% | YoY:133.33%
Key Insights
Revenue: $262.9 million; YoY growth 26.8%, QoQ change -9.8%. Gross profit: $158.39 million; gross margin 60.25%; YoY gross profit up ~41.0%, QoQ down ~15.0%. Operating expenses: R&D $68.88 million; G&A $42.75 million; Selling & Marketing $51.48 million; total operating expenses $163.11 million; OpEx as a % of revenue ~62.1%.
EBITDA: $10.68 million; EBITDA margin ~4.06%. Operating income: -$4.72 million; operating margin -1.80%. Total other income/expenses: $7.49 million net of items;...
Financial Highlights
Revenue: $262.9 million; YoY growth 26.8%, QoQ change -9.8%. Gross profit: $158.39 million; gross margin 60.25%; YoY gross profit up ~41.0%, QoQ down ~15.0%. Operating expenses: R&D $68.88 million; G&A $42.75 million; Selling & Marketing $51.48 million; total operating expenses $163.11 million; OpEx as a % of revenue ~62.1%.
EBITDA: $10.68 million; EBITDA margin ~4.06%. Operating income: -$4.72 million; operating margin -1.80%. Total other income/expenses: $7.49 million net of items; Income before tax: $2.77 million; Income tax expense: -$6.37 million (tax benefit). Net income: $9.14 million; Net income margin: 3.48%; Earnings per share (basic/diluted): $0.11. Weighted average shares: ~83.28 million (basic), ~85.96 million (diluted).
Cash flow: Net cash from operating activities of -$62.31 million; capex $5.08 million; free cash flow -$67.38 million. Cash at end of period: $824.75 million; cash at beginning: $549.18 million.
Balance sheet: Total assets $2.5967 billion; cash and cash equivalents $823.56 million; short-term investments $514.77 million; total current assets $1.6373 billion; total liabilities $1.3287 billion; long-term debt $704.75 million; total debt $983.35 million; stockholders’ equity $1.2680 billion. Key liquidity ratios: current ratio 2.63; quick ratio 2.63; cash ratio 1.34. Leverage: debt-to-capitalization 0.437; debt ratio 0.379; equity multiplier 2.05.
Valuation signals: Price-to-sales ~59.17; price-to-earnings ~425.5; EV multiple ~993.6; indicative of a lofty multiple vs. peers, underscoring the need for continued evidence of profitability and sustained revenue growth.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
262.90M |
26.76% |
-9.82% |
| Gross Profit |
158.39M |
41.05% |
-15.04% |
| Operating Income |
-4.72M |
86.03% |
-145.76% |
| Net Income |
9.14M |
133.76% |
-45.47% |
| EPS |
0.11 |
133.33% |
-45.00% |
Key Financial Ratios
operatingProfitMargin
-1.8%
operatingCashFlowPerShare
$-0.75
freeCashFlowPerShare
$-0.81
priceEarningsRatio
425.52
Management Commentary
No earnings call transcript data provided in the dataset. As a result, management quotes, thematic takeaways, and cadence of guidance from the QQ1 2025 earnings call could not be extracted. If a transcript becomes available, we will synthesize themes under strategy, operations, and market conditions with context and implications for investors.
Forward Guidance
The dataset does not contain explicit management forward guidance for QQ2 2025 or beyond. Given Guidewire’s ongoing cloud transition (InsuranceNow and related cloud-enabled offerings) and the revenue mix implied by the QQ1 2025 results, investors should monitor: (1) progression of cloud adoption and ARR growth, (2) revenue mix shift toward recurring revenue and the associated impact on gross margins and profitability, (3) operating leverage as scaling efforts mature (R&D and SG&A investment versus revenue, and (4) working capital dynamics and cash conversion as the company accelerates customer deployments. Our qualitative assessment suggests that if Guidewire can sustain mid-to-high single-digit revenue growth while achieving operating margin expansion through scale and higher cloud mix, profitability could improve meaningfully over the next several quarters. Key factors to monitor include: cloud revenue growth rate, churn/retention, discontinuities in sales cycles, and any cost optimization initiatives to improve operating margins.