Guidewire Software Inc (NYSE:GWRE) Posts Strong Q1 Beat and Raises Fiscal 2026 Outlook

Guidewire Software Inc (NYSE:GWRE) delivered a strong start to its fiscal year 2026, reporting first-quarter results that exceeded analyst expectations on both the top and bottom lines. The insurance software specialist's performance, coupled with an upbeat outlook for the coming periods, appears to have resonated positively with investors, as shares moved higher in after-market trading following the announcement.

Earnings and Revenue Highlights

The company's results for the quarter ended October 31, 2025, showcased robust growth across its key metrics. Total revenue reached $332.6 million, a 27% increase compared to the same quarter last year. This figure came in ahead of the Wall Street consensus estimate of approximately $323 million.

The strength was broad-based, with each revenue segment posting double-digit growth:

• Subscription and support revenue: $222.2 million, up 31%
• Services revenue: $68.5 million, up 23%
• License revenue: $42.0 million, up 12%

On the profitability front, Guidewire's non-GAAP earnings per share (EPS) of $0.66 surpassed the analyst estimate of $0.625. This represents a significant year-over-year increase from the $0.43 per share reported in the first quarter of fiscal 2025. The company also returned to GAAP profitability, reporting income from operations of $18.5 million compared to a loss of $4.7 million in the prior-year period.

Market Reaction and Forward Guidance

The market's initial reaction to the report was favorable. Following the earnings release, Guidewire's stock price advanced in after-hours trading, indicating investor approval of the results and the company's updated trajectory.

This positive sentiment is likely bolstered by management's raised outlook for the full fiscal year 2026. Citing "strong sales momentum," Chief Financial Officer Jeff Cooper stated the company was raising its guidance ranges. The updated forecast calls for:

• Full-Year Revenue: Between $1.403 billion and $1.419 billion.
• Full-Year Non-GAAP Operating Income: Between $266 million and $282 million.
• Annual Recurring Revenue (ARR): Expected to end the year between $1.220 billion and $1.230 billion, implying continued solid growth from the current $1.063 billion.

Furthermore, the company's guidance for the second quarter also came in ahead of street expectations. Guidewire anticipates Q2 revenue between $339 million and $345 million, with a midpoint of $342 million that is approximately 1.5% above the analyst consensus estimate at the time of the report.

Strategic Momentum and Key Takeaways

Beyond the financial figures, management highlighted continued strategic progress. CEO Mike Rosenbaum pointed to "strong momentum for Guidewire Cloud Platform" and referenced the launch of new AI-powered pricing and underwriting products at the company's recent customer conference. The 22% year-over-year growth in Annual Recurring Revenue (ARR) serves as a key indicator of the company's successful transition to a cloud-based subscription model and the durability of its customer relationships.

In summary, Guidewire's first-quarter report delivered a clean beat on revenue and earnings, driven by strong demand for its core cloud platform. The decision to raise full-year guidance signals confidence in sustained momentum, a message that was well-received by the market. The company's focus on embedding artificial intelligence into its insurance software suite appears to be resonating with clients, positioning it for continued growth in a sector undergoing significant digital transformation.

For a detailed look at upcoming earnings dates and analyst estimate revisions, visit the Guidewire earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendation, or an offer to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.