Yahoo Finance Guidewire (GWRE) Q2 Loss Wider Than Expected, Revenues Up Y/Y
Guidewire Software GWRE reported non-GAAP loss of 21 cents per share in second-quarter fiscal 2023 (ended Jan 31), wider than the Zacks Consensus Estimate of a loss of 4 cents and year-ago quarter’s non-GAAP loss of 6 cents.
The company reported revenues of $232.6 million, rising 14% year over year and beating the Zacks Consensus Estimate by 4.7%.
Guidewire Cloud continued to gain momentum in the reported quarter among new and existing clients.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. Quote
Quarter in Detail
Subscription and support segments’ revenues (45.5% of total revenues) soared 25% from the year-ago quarter’s levels to $105.8 million, owing to higher subscription revenues. Subscription’s revenues surged 36.8% year over year to $86 million. Support’s revenues declined 7.9% year over year to $19.7 million.
License’s revenues (31.4% of total revenues) were up 5% year over year to $73.1 million.
Services’ revenues (23.1% of total revenues) climbed 6% year over year to $53.7 million, driven by increased cloud implementation programs.
Annual recurring revenues (ARR) were $707 million as of Jan 31, up 14% (up 17% on constant-currency basis) year over year.
Non-GAAP gross margin expanded 140 basis points (bps) on a year-over-year basis to 56.7%.
Subscription and support segments’ gross margin expanded 850 bps on a year-over-year basis to 57.5%, due to increased cloud infrastructure efficiency. Services’ non-GAAP gross margin was negative 0.4% compared with a gross margin of 8.3% in the year-ago reported quarter.
Total operating expenses increased 3.6% year over year to $146.7 million. Non-GAAP operating loss was $23.2 million compared with $39.5 million reported in the year-ago quarter.
Financial Details
As of Jan 31, cash and cash equivalents and short-term investments came in at $714.7 million compared with $0.9 billion as of Oct 31, 2022.
Guidewire generated $1.2 million in cash from operations during the fiscal second quarter, with a free cash outflow of nearly $2.5 million.
Guidance
For third-quarter fiscal 2023, revenues are expected in the range of $211-$216 million. ARR is expected to be between $715 million and $720 million. GAAP operating loss is expected to be between $59 million and $64 million. Non-GAAP operating loss is expected to be between $16 million and $20 million.
For fiscal 2023, the company expects total revenues to be between $894 million and $904 million. ARR is expected in the range of $745-$760 million.
Non-GAAP operating loss for fiscal 2023 is projected in the range of $7-$17 million. Cash flow from operations is anticipated to be between $50 million and $80 million.
Zacks Rank & Stocks to Consider
At present, Guidewire carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Arista Networks ANET, Perion Network PERI and Pegasystems PEGA, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.79 per share, rising 11.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 18.4% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 66.4% in the past year.
The Zacks Consensus Estimate for Pegasystem’s 2023 earnings is pegged at $1.31 per share, rising 96% in the past 60 days.
Pegasystem’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of PEGA have declined 41.1% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Guidewire Software, Inc. (GWRE) : Free Stock Analysis Report
Perion Network Ltd (PERI) : Free Stock Analysis Report
Pegasystems Inc. (PEGA) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
