Executive Summary
Guidewire’s third quarter of fiscal 2024 delivered notable progress on cloud adoption and revenue growth, highlighted by a 33% year‑to‑date increase in InsuranceSuite cloud deals and a total ARR of $828 million. Management emphasized improved sales execution, stronger pipeline visibility, and ongoing margin expansion driven by cloud infrastructure efficiency. While GAAP profitability remained negative as Guidewire prioritizes platform scale and go‑to‑market investments, the company raised its ARR outlook and reiterated its long‑term growth trajectory, including the goal of reaching $1 billion ARR by FY25. The quarter also showcased strategic initiatives (e.g., Jasper release, Jutro developer platform, and India-focused development efforts) aimed at accelerating product agility, data capabilities, and ecosystem growth across geographies. For investors, the story centers on durable ARR growth, cloud‑first expansion, and a constructive path to higher cloud gross margins, offset by near‑term profitability headwinds as Guidewire continues to reinvest in platform evolution.
Key Performance Indicators
QoQ: -34.54% | YoY:71.12%
QoQ: -156.55% | YoY:87.98%
QoQ: -155.33% | YoY:88.14%
Key Insights
Revenue: $240.7M (Q3 2024) with YoY growth of 15.99% and QoQ decline of 0.09%. Gross profit: $142.2M, YoY +43.78%, QoQ -0.13%. Operating income: -$16.7M, YoY improvement of +71.12% but QoQ -34.54%. Net income: -$5.48M, YoY improvement of +87.98% but QoQ -156.55%. EPS: -$0.0664 (GAAP) / -$0.07 (diluted). ARR: $828M (Q3 reported), signaling durable cloud demand and ongoing migration tailwinds. Subscription revenue growth: 35% YoY; Subscription & support growth: 28% YoY. Gross margin: 63% overa...
Financial Highlights
Revenue: $240.7M (Q3 2024) with YoY growth of 15.99% and QoQ decline of 0.09%. Gross profit: $142.2M, YoY +43.78%, QoQ -0.13%. Operating income: -$16.7M, YoY improvement of +71.12% but QoQ -34.54%. Net income: -$5.48M, YoY improvement of +87.98% but QoQ -156.55%. EPS: -$0.0664 (GAAP) / -$0.07 (diluted). ARR: $828M (Q3 reported), signaling durable cloud demand and ongoing migration tailwinds. Subscription revenue growth: 35% YoY; Subscription & support growth: 28% YoY. Gross margin: 63% overall; Subscription & support gross margin: 65%. Free cash flow: $0.754M; Operating cash flow: $4.80M. Cash and investments: $783.5M total; Net debt: $83.9M. Cash at end of period: $360.8M. Balance sheet remains solid with total assets of $2.040B and total stockholders’ equity of $1.285B.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
240.68M |
15.99% |
-0.09% |
| Gross Profit |
142.23M |
43.78% |
-0.13% |
| Operating Income |
-16.70M |
71.12% |
-34.54% |
| Net Income |
-5.48M |
87.98% |
-156.55% |
| EPS |
-0.07 |
88.14% |
-155.33% |
Key Financial Ratios
operatingProfitMargin
-7.16%
operatingCashFlowPerShare
$0.06
freeCashFlowPerShare
$0.01
priceEarningsRatio
-415.66
Management Commentary
- Strategy and momentum: Management emphasized that Q3 results reflect the effectiveness of Guidewire Cloud Platform and InsuranceSuite as the global standard for P&C insurers, with eight InsuranceSuite cloud deals closed in the quarter and 24 cloud deals year-to-date, a 33% YoY increase.
"Q3 was another very strong quarter and puts us in great shape heading into the final stretch of our fiscal year."
— Mike Rosenbaum
"Q3 surpassed our expectations across the board. ARR finished at $828 million and benefited from durable cloud demand."
— Jeff Cooper
Forward Guidance
- ARR guidance raised to $856M–$864M for FY2024; fully ramped ARR expected to grow at or above 16% for the year. Revenue guidance increased to $968M–$976M (midpoint +$10M). Subscriptions: ~$474M; Subscription & support: ~$546M; License: ~$247M; Services: ~$179M. Gross margins guidance ~63%; Operating income target: $94M–$102M; Stock-based compensation ~?$147M; Operating cash flow: $130M–$150M. FX sensitivity noted: potential ~$7M negative ARR adjustment at current rates. Investment thesis remains: scale the cloud platform to drive durable, long-term profitability with a potential acceleration of product investments in FY25 to reach higher gross margins and OPM targets. Investors should monitor cloud adoption pace, ramp of fully ramped ARR, FX movements, and the ongoing evolution of the services mix with partner enablement.