GWRE - Earnings call transcript Q1 2020 | Guidewire Software, Inc.

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Operator

Greetings, and welcome to the Guidewire’s First Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your presenter, Mr. Officer. Financial Chief Smith, Curtis Please go sir. ahead,

Curtis Smith

is Good for Chief Officer. the And which of on My Guidewire. welcome Financial me the fiscal is to call conference ended Mike name XXXX. XX, the earnings And Software’s October Smith, first Officer Executive XXXX, I’m Chief Guidewire year afternoon. Curtis on fiscal call with – quarter Guidewire’s Rosenbaum,

Form our Investor as available of disclosure our related furnished Complete in release well at today, as on of be SEC, in results the website issued press found are our both Relations X-K to which ir.guidewire.com. our can of section the

As recorded the and a available being call. following is conclusion be today’s reminder, a of replay call will the

to Reform of Private to product performance market the future Safe During cloud of we Act of the product our availability. the strategies call, Harbor Securities the the pursuant will and Litigation shift regarding offerings, statements make trends, XXXX including anticipated and business, provisions roadmap forward-looking

These the may and SEC. should with refer on forward-looking to forward-looking outlook. today our relied any as upon subsequent and We as be the views in results filed Please disclaim statements XX-Qs management’s and most representing expectations factors recent any date. statements Actual our obligation current of not differ of any views materially. update are as to or based risk Form XX-K

to investors. our and posted our of also also will in website. additional supplement certain reconciliation measures to to A refer a on are We information to additional in data non-GAAP Reconciliations is GAAP provide non-GAAP release. press provided IR measures financial

may one-time not of business. insight and may in we These in offer details may metrics incremental During greater dynamics be to our updates future. or into nature we the may provide the the provide call,

provide Mike I QX the our take to will fiscal over XXXX. your questions. results on then remarks prepared and turn for and I and let providing outlook that, Mike for his details me will our With call before then

Mike Rosenbaum

quarter and Thank earnings call. you, to joining Curtis, you those of first our thanks for us

positive a of $XX.X high total to up of of was Total EPS guidance. end ARR million, was subscription and top with end revenue both as off to the the QX. the million license ranges. our exceeding above revenue that QX and guidance million, start $XXX XXXX end ended fiscal at million, from of and We’re our $XXX revenue were $XXX

seasonally attend. impacted our lay were long-term opportunity opportunity for our us we future. a and for sales as our the for financial of just in was our Company strong our on customers it me provided It partners and products. the and to the the had is us out by Overall, the close an opportunity conference successful plans in of performance was activity the event was I’ve direct and feedback with vision the an to and to quarter this in was slow hear for for from incredibly year It QX, performance first QX. for after plans useful somewhat an particularly held believe pleased we which terms user new Connections, quarter always and annual

the industry. at statistic of This our XXX was indicator is I specific was over breakout were think workshops, in the of panels, and a on nearly ever employees and me which X,XXX created But participating our sessions. P&C focus nearly two-thirds our customers, great that event, prospects, largest singular value partners, Connections the and impressive the with customers through most represented for

and and product was insurance new to enable that digital simulate, low Jutro, by will product demonstration testing powered We presented digital rapidly tool a highlighting insurers for live advanced new designer, and featuring developing rapidly innovative and new products. products; insurance apps. design, use experience an vision case rapid code delivering, our design, designing our a for framework It configuration of deploy

available in will We digital Jutro and Guidewire to QX. for Cloud designer fiscal expect customers QX product advanced be in and fiscal self-managed

also and Guidewire Cloud data through Guidewire to and common internal improve automation, platform make and We enabling P&C faster data tooling, sources the factory to the frameworks, continuously services our collects the cloud platform, specific decisions. up external to to insurance information that and leverage data outlined smarter, from plan repository a insurers minute

and collection, prospects business and understand and science enabling AI and customers which to the XX%. engine includes modeling, for to product, interface to the prepackaged small will Internet combines expense on-demand estimate data version reduce positively implementation small implementation GO, underwrite business which and InsuranceNow XX% Risk customers user a new highlighted We Assessment we and new P&C that newest scale our quickly by reacted specific, of time InsuranceNow risk. option

with ability customers and of partners. roster with impressed was the I deliver and our team’s message outstanding to our connect

is helped to Connections So it success. implementation a only events to thanks and and make that and customers ideas best big who and congratulations help forum all a to team customers firm plans. practices, such of event purchase an serves exchange also future partners, the prospects of a not the is our and up

delivery. continuing market see our the Cloud, to validating shift are increased investment cloud from Guidewire in We offerings to self-managed further and

we the just in complexity and last significant as towards stages still and these of year. Therefore, transition, the weighted cloud experienced in to by the back warrant of our customers. consideration half nature of we be the fiscal expect XXXX year, early demand We’re transitions multiyear this

long-term first as are confidence the goals. There as quarter highlights of for our from our number that support in expectations a well remainder the year of our the

Tier One X of for case/.. largest use platform greenfield customers new a innovative as cloud selected InsuranceSuite our

and agile DWP platform provide our framework innovate chosen use associated the this with. are small, was ARR to with to an the case While carrier for

the We’re our excited larger cloud opportunity Tier by overall where to carrier, creates X a this of to exists. demonstrate value potential solution the a deal much

DWP, as our ability single well Also as and our well InsuranceSuite this core insurers willingness State in implement InsuranceSuite signed who all of insurance Pennsylvania during carriers With the products. illustrates license quarter, serve digital as sizes full Insurance selected data one project. Fund, a have we of the to as to all and $XXX million as Workers’ our

In expand additional licensed with customers products. XX the an PolicyCenter relationships customer who to are to existing ClaimCenter quarter, we the full Among these XX existing first BillingCenter core. who extended and chose InsuranceSuite

fundamentals We process environmental customer social to underwriting their are complete also behavioral happy to media augmenting view of announce a line of sentiment, basic an chose for and business science more influences. insights, that existing compensation the workers’ company our with by provide

capabilities Guidewire, use case. are our – workers’ and customers This significant of a critical deal of is the Since the key to application demonstrates sales record momentum approach leadership. extending factor data in beyond implementations its component track cyber references listening in notable demonstrate our to our particularly our successful comp continued is our selecting to since market process for broaden

reflects successful going the implementation customers with the first in for quarter strong XX momentum products. first record time the live XX on of Our

addition, In product two customers completed Virgin major upgrades.

for also and year. of strategy of been highest North to was validates again, important analysts. are insurancenow well ability and continues Europe, for vision. a and Our recognized to America. non-life recognition us, that customers for transforming year both as insurance our for in is the evaluating honored and in their This to approach for prospects with platforms adoption it Guidewire completeness who by as third for challenger recognized consecutive was ranking And the platforms Guidewire as execute P&C Magic same businesses. consecutive customer has report InsuranceSuite Guidewire industry Quadrant in named the leader core a in fifth be Gartner’s Quadrant Gartner’s Magic success in the for in

more be we to that. the work our Looking a motivating still quarter welcoming do, could have while to about transformation. ahead P&C back this opportunities Guidewire the modern here to solutions. part of cloud the on my industry I’m Guidewire, not for to platform first a our cloud to looking based transformation of excited is it’s opportunity to I lead lot the industry industry, And that at core the contribution transition in in see is significant forward

for and year. Curtis for turn I’ll the the call on results elaborate now to our outlook over QX financial QX and to

Curtis Smith

We first Mike. was to was million. XXXX in the $XX.X Thank revenue, completed ago. to $XX.X License year guidance total million million revenue. year, and was $XX.X revenue term year-over-year share. fiscal a The revenue $XX.X fiscal partially a quarter subscription last decrease due and unusual earnings a license per two our of with deals exceeding primarily million first of quarter that solid operating increase compared Total $XXX income subscription the million in by you, began offset start for in represented revenue

term of no that license term XX-year revenue $XX.X revenue in year. QX was in these of QX recognized One million a resulted new this of last year with deals being in contracts

what ago. year increase was deal this from million, impacted revenue that year. up renew contract we QX to cloud $XX.X year. consolidation This attributed last a of in InsuranceSuite Subscription million $XX.X second expect QX a sales strong year last to was positively XX% is The

From of to a XX% cloud our a that new XX% our anticipate ago. will Early continue year prospects for first perspective, quarter, sales focusing compared sales point subscriptions, offerings be and XX% sales indications mix subscriptions. were new self-managed on to of between software XX% in the we year new versus offerings. the to Therefore,

$XX in term million, If range, have high due of licenses guidance the revenue our the ago near-term our from to range. subscriptions and this lower revenue towards flat compared Maintenance impact we to the revenue year also of could past. end they high bookings discussed was above trend end upfront a as

muted million compared term million maintenance includes maintenance the This expect to a end the part $XXX subscription the by which revenue, ARR as We at end impact of license activities the $XXX currency deals revenue subscription of to customer subscription of The the first converts growth year. service. a cloud in of on the quarter basis a fees. constant the migration includes when at be a to was

was Mike typically as QX activity As Connections. and no we sales noted, high is on focus QX quarter digest our This slowest different. QX

Services the from revenue completion as well ago for first $XX.X projects. was timing the by year a driven million, million decrease customer $XX was of as a quarter

metrics we basis, comparable will non-GAAP a provided metrics non-GAAP GAAP GAAP on Turning in to measures earnings to a release today. and have and profitability, the issued of we press discuss reconciliation our these

of note these being effects of issuance amortization intangibles, discount the With costs the compensation stock-based related of the amortization differences expenses, convertible debt adjustments. primary from tax our and and

Gross compared The investments greater including year and in the anticipated margin largely quarter decrease ago. our quarter greater ago. revenue driven Gross first the expanding well profit our in as year changes the ago year was The million compared capabilities. license million as margin driven to cloud term already to to Guidewire by to a in in subscriptions, change is XX% revenue lower discussed, $XXX.X gross compared investments $XX.X was by was shift for a XX% cloud ongoing capabilities.

Services the million an for expenses gross $XX.X from driven effective ago to in target of as increases we new ago, quarter, count from were well X% head our to year as expenses a XX%, up margins of increase a in quarter year spend. continue management margin first operating improved as and was through X% by Total headquarters. headcount, the cost net related subcontractor

As due hiring to the was revenue range high exceeding per million, income from or million a our favorability Net share. $X.X operating upside timing the diluted of of projects. guidance expenses largely result, and and was income $XX $X.XX end in

$XX.X where $XX.X outflow cash our to previous million quarter the flat in Operating and for of for billion $X.X This investments, cash sheet, an year. quarter year million commission bonus outflow employee flow is the of outflow and in the with used the equivalents fiscal our a balance achieved compared is seasonality, an quarter. first with the of end cash to consistent fourth ended cash, payments Turning ago. quarter to compared was we

million compared an ago, $X.X million $XX.X approximately excluding the the $XX.X cash Operating build-out Free was last was impacted million outflow year into an payment with from which flow new the discussed into $XX positively moved from cash QX that which – $X.X QX, in [ph] of build-out quarter million, for associated moved excludes a customer that flow expenses we expenses. by to QX million in headquarters, outflow of quarter.

recognize a are we to we Connections, normal the is Now of of at ahead. sales turning solid a that year Coming for to as QX our year, successful our and most point outlook. this is out in start, activity off and the

things flow profitability revenue, year our free top on respect provided monitoring the and that the are there we full for view. our unchanged With line, call. outlook to QX two Our are are non-GAAP cash outlook from inform

due the to approximately and year versus to demand term be impacted total could deals. sales higher subscription subscription revenue for extent deals First, that the negatively ratable new drives cloud our bookings then XX% than revenue of of subscription our revenue new license recognition for upfront

licenses. continue seen we occasional to see and may have multi-year Second, term

with initial longer-terms to when renewals, renewals two based we license terms, term While along followed experience to interest, and term term two with licenses on the focus past on contracts with annual we it customer continue over may sense. open by makes years, year our be new

would as of XX% we positively impact period comparisons a by metric impacted comfortable in these make two are still future not The ARR things, down. but deals XX% discussed our previously Multi-year either will the of and executed revenue year-over-year with to range year-over-year growth. is

week. a net and net are income net our GAAP tax expectations do BEAT share unchanged, this new and income erosion anti-abuse of expect per issued base While changes income our non-GAAP as or we earlier to regulations result the

these the are impacts We evaluating regulations. still of

increase, impact currently but our non-GAAP not charge provision. We do to to expect tax GAAP an our expect tax

the an update to our earnings public we were Given made next provide regulations expect week, during call. this

Turning to in million. to anticipate second within million $XXX range in we to of license revenue the million expect the of quarter, be $XX the revenue to $XXX be subscription million total and $XX to we range

$XX million to maintenance of services million $XX million. million QX of revenue and expect $XX.X QX We $XX to revenue

of the to to year off remain between quarter, anticipate For positive income we're a a we about second forward. start In million. million $X the operating our and non-GAAP summary, looking prospects optimistic $X and

the you questions? can Operator, open now for call

Operator

proceed with you. your the first from Instructions] question Guggenheim. Your comes Thank Please of line Ken question. [Operator Wong with

Ken Wong

lower first Curtis, we you, as one taking my for and lot maybe does revenue, QX peers question for just my it look a at guys. what Maybe projecting. than thanks were me look Great,

to there in dynamic thinking is maybe there terms be missing. different type than color to mix any would seasonality? wondering, to do about? more the Just might think helpful in return is you maybe expected – QX is deals due some this of that a there more this Is maybe be we of Just cloud extent we're

Curtis Smith

sure. Yes,

over we QX and the things same results and in in up we've that past, move And annual also tried QX we've focus the necessarily we've QX. analyst So, the and to down. because in investor seasonality do community noted the on obviously quarterly that not seen up noted and general, is results

So, what seeing I QX. in think that's you're

updates continue of and quarter see monitor cloud As continuing that demand in we the coming noted our out out are QX. there. We’ll over comments, we to next to provide any

Ken Wong

cloud quite deploying question for you Got we customers of when few it. deal talk a you for versus cloud on think do of line? Guidewire maybe cloud cloud. a might announcements, And on about impact relative seeing are what to the lot then, recent see Mike, and a you the a down side this we've how adoption specific InsuranceSuite Can partner noticed your that partners this you're the Guidewire dynamic

Mike Rosenbaum

environments, in ecosystem moving to to the sometimes cloud in and I Yes, insurance see question. through working workloads with this Good that just P&C can dynamic be we certainly in that. facilitated specifically a definitely partners around and sure. there Yes, our industry, are partner customers do think on-prem that is not that

infrastructure. that I managed the think the end, we an offering in of customers our a to most running that cloud service will Guidewire if about simply the move different long-term, on be just cut of significantly as think than you instance Guidewire in expect to offering cloud

was when self-managed around will about building alongside in that implementation you look we to that specifically services service from you’re cloud releasing when being what the talked a you're at think with we that Connections I achieve a end Those of – And we native -- what's partner. what at things announced that and Connections a types some we managed you're – will different services specifically or effectively managing able up PolicyCenter. and of distinct are

that be I want to clear that though to of committed we remain mode operation.

or to service as a mode have more operating cloud of to decision partner asking customer sort they about, customers committed of a in self-managed move the that significant the in a mode a Guidewire either choose Guidewire to base Guidewire cloud running a native will We directly that's we that and we're long to run may offering. move but make to you're through so most expect

Ken Wong

that, sense. a for Got lot Thanks it. That Mike. makes

Operator

next with question. line Your with Chris from Goldman Please comes question the Sachs. Merwin proceed of your

Chris Merwin

Mike. you. have Yes, Okay, thank I one for

could I you gained at years front any XX% but confidence or in the being think any of to incremental was talk operations you've very able about scale Thanks. and to spoke things progress was to know the cloud I one coming And that up it's on gross up better? efficiency. Analyst you the cloud still hoping and margins here, just Day and early

Mike Rosenbaum

Sure. Thanks question. the for

I'm comment the that just early. I the you prefaced I've you, that that that technology of build you're part couple that company, been impressed the months drive the deliver in am that will it's will types in cloud very – the implementation like and the the glad efficiencies first efficiencies with run the So referencing. that of work question with the ultimately margin the we're doing to of our still layers of long build into targets

we need we will early efficient projects lead headed the adopter So we the implementations. organization we the deliver with the think the offering that into turns how around have of a give customers metrics tending that ability right to on on me greater more way – confidence that is those us have you in to the doing are in that ensuring right now more teams that on towards in work the any a we’ll doing other that place, now lot a get eventually than that cloud and we're experience and is I on now give to towards the that say I'm we're the in that and working there. been direction, we've numbers don't details to aligned and position we sort not based cloud that of have efficiency, newest in implementations subjectively greater a are done place,

Chris Merwin

if know Okay, impact Curtis, of I relative for XQ, but can know expectations? bookings new the that that about the Thanks. more that's cloud I just, trended something was maybe your quarters three revenue I curious year. for ahead thanks. one monitoring there could internal about rest of in how the on mix here, I talked the the even far? And you that have great, you talk like mean mean, to is you're and plan for so just

Curtis Smith

Sure.

maintain we this So, metric year. that

as sales thought about a did subscription important we metric talked was to New targeted last range. year as when put track we overall XX%. percent of it of the earlier, because we and of the the out range sales to Initially that we we XX% midpoint continue an to this

As indicator land come more through and QX, through information, where we we'll that better have of QX we we range. when we a have come will on

position range thinking out towards the how about cloud, an to that continue we're QX. and We see of update provide be the on we'll and coming march to that in a

Chris Merwin

Okay, great. you. Thank

Operator

with the Auty question of Please proceed from next comes question. JPMorgan. line Your Sterling with your

Jackson Ader

Great, Sterling thanks Jackson This for for on our tonight. taking is questions. Ader

idea were the relative sequentially. the for increases sequential increase, that trended Can ARR? maybe in expectations give us an you on just increase of ARR Just also your what to those million how $X

Curtis Smith

year. in it’s how we with the in Yes, would line plan sure. expectations I generally say

our the the a guidance light anything projections for very our and already QX the very, do impact think and ability cloud made out, As the which in outlook we've that'll is QX, validate for and I to the probably And successful QX change year, for quarter. we QX year, didn't the but that that come strong confidence we've provided. played we a year, an to pointed this traditionally into activity, demand had particularly our

Jackson Ader

that then customer customer, term small. inside cloud X Okay. the moment? cloud the existing And customer win existing is they Tier Is InsuranceSuite though the on Tier cool even are customer license at opportunity and Tier InsuranceSuite where you're X that X greenfield

Mike Rosenbaum

Yes.

isn’t licensed cloud-based say, though, greenfield I to want is. customer exactly about. that cloud – innovate these really case not industry I the exciting this would give I is details that So purposely we're is use that They us what's InsuranceSuite, – to give carriers have but market is. part about way bring offering don't excited scenario who the would of intention to this to say disclosing in gives products in for and – that the we're and the model a something I opportunity new to particularly think that

able need sort an DWP we're future, we where to them our case to to unlock potentially opportunity ARR and use like out of the cloud for product and the innovative particular prove offering confidence to in us. that and market, create of larger experience existing with partner So we said, a bring both

rest And it’s of I of cloud-based potential of seeing those I the there year our us look are one the the our of customers, as opportunities that in think the potential that rest deploy. things for customer towards innovative that exciting. affords similar even that’s base customer our the say, really and we’re that beyond sort prospects I and is and to we think, model Greenfield would base affords

Jackson Ader

taking for my Thanks questions. Okay.

Operator

Please next Your Sills line the with with comes Bank America. of proceed of question question. your Brad from

Brad Sills

back-end enterprise it’s remainder is given – the Could of you early, trend pipeline Hey, the question. large business what know out just the shaking but the like that Thanks of year. in know loaded you my taking the market for nature on Great. I you’re have addressing. guys. I for this comment that

the deals pipeline I types for deals one year of deals cloud year. for what some these like think year? closed. that for more the seeing of to multi-department you’re looks you just deals entering Any terms alluded strategic this in Are just color last like type this kind of versus cloud? they more on Just what the

Curtis Smith

Yes.

this So the year. pipeline we last monitor year versus

out we our and things of conference for of demand year the a QX was of lot coming of our One offering. last cloud saw

some versus sales. throughout our and We mix the talk continue sales subscription new to move extent to new total see of we why that as year we the year, trend about that’s this

nice general. about we And a the and customers think thing we with referenceable to to seeing opportunities So pipeline what year the forward. some a ago, We’ve we’re new more lives this versus that’s year market. I had year of experience and I going as in got place continue to go to focus think helping place going been in on go us market in

Mike Rosenbaum

of obviously, achieve is say, for leap would I it’s this we think what commitment I we that us that able for to that how tough an going at bookings that to give the to the that year, of we percentage to that at me at answer for cloud But rest we’re model, time. pipeline, year to overall looking last demand. customers percentage deployment when year. the the make look look to and it that you were compares for with the And the key is things be

implementations. we making for interesting I the our to of of base providing as self-managed new model, operating does with the deployment that capabilities would to mode our installed choose we that’s are as of enhancements cloud has other here propensity from the to and the to – cloud-based me much and we Guidewire. customers on upgrades new that newcomer think to positive say thing and very customers we’re just keep Like I the saying, demand keep is still stressing seeing we’re in for the And the a committed investment base do other net we’re the existing as self-managed that it right. customers installed

decides move even to everybody we’re to to though cloud. even going remain possible, committed, if that’s the So

the as at the see Guidewire. Curtis fiscal year. at, to we look shifting of interesting market I thing the remainder that guess, that of although I think I see to the of at And – committed mode cloud. of for to the said, remain shifting the demand the cloud, self-managed that the deals would We we’re that to nature looking when operating I’m sort we’re continue stress, just looking has the we I

Brad Sills

Thanks, one more I if Mike. And may. then

are deals business. they starting of in more and Is progress nature these the that themselves see something on data some digital like to about sounds and cloud the attach? you’re perhaps real that more data Just strategic there to business. It lend digital

Mike Rosenbaum

cases creates extent about opportunity that of new business. to for ways using I them after modern, use cloud to mechanism an go think Yes, smarter, greenfield more lines to more the of and looking at as that new It rating are a be companies business. agile thinking

one we that that’s initiatives line business, core think the talked of that that really the was to insurance innovate not their carriers, use about of the that our them and I and with to taking modern to – think approach I dynamic that’s we interesting sort of When just the to the a can kind really about extent writing the new offerings or highlighted an that’s And premiums, data think ability analytics things system we see things of in you we the case of some whether is I growth Connections respect question. different business lines that more is these. exciting. a me facilitate really or exciting like, commercial risk analytics the what’s to and system rating can your the up product That’s against data we to grow. of up basis and see the

Brad Sills

Mike. Thanks, Great.

Operator

Please comes question the next from with line Tyler of Your your proceed Radke Citi. with question.

Tyler Radke

there, to, we like, on think But to I give focused revenue when InsuranceNow. get it’s implementation of a like new just update the businesses, you’ve should think, start you thanks where about where I the Mike, expect InsuranceNow expenses. ARR? you that’s or it since offering maybe driving know and been And GO guess, back that come the see, But comments and for taking I focus to ask in the maybe that performance. that for business where made meaningfully you’d kind terms some to improving Hi you of wanted reducing you an for on overall time my implementation I question. is

Mike Rosenbaum

had thanks that that one the talked meetings we’ve at in I Yes, because Connections. Analyst we of for question, it’s at and that about certainly appreciate Day things the – definitely been the

it’s think just how just they – I and InsuranceNow, of are in of industry for are the this kind think the that carriers. serious decisions these made nature the isn’t to I way specific

I’m about you – big is it. on product basis but think, made the year. investment quarter-over-quarter, last change I don’t should business an looking at we think think I how that dramatically I things annual a are in think going to that

Like, of I positively, incenting all InsuranceNow an cost some at to we’ve total offering was business. the market that go-to-market the our way in from at the GO that And we and look said us previously, implementing we changes of approach address The we’re feedback way. that helps those after product to got the in very that bring can offering go prospects made Connections positive things in positive. a customers very people

I’m but that an at on think And outlook basis. right. on InsuranceNow, positive I’m annual so it looking All for I the

do definitely whole this see but is quarter-to-quarter, I would that it’s in want industry, So changes of I say, annual. business of timeframe to kind the

assess And and to of to do so us. of of we about, line the that the how that’s when that be business the metronome it – we of clock for performance the unit comes the product when okay, performance sort we saying, need thinking that

the Listening more we positive. going since about joining I experience think the But to that very very, it easily, focus on be I’ve those said, and to that user seen the feedback customers Company take very that positive. around like I been the has and everything are implementing can quickly the

Tyler Radke

in a InsuranceSuite to move to ramp seeing to cloud than I managing question. some follow-up about a a if less self where do go-to-market you’re does I of the moving bit a point, how We cloud, deal, Cloud. talked are to to they’re ask Thank self-managing targeting a given rather the I’m curious, about change on move customers And and Like, that get to choosing are self-managed And the over way. you. you do thinking go-to-market how Great. customers on-premise? have when cloud? could but maybe guess, the on you’re little how that customer you that then, you the maybe you And that Mike, a just already

Mike Rosenbaum

okay. Yes,

Is is right. the that that infrastructure the responsible platform. that is, One associated very being that is somebody Is then I I implementation it managing that that’s offerings. rapid me think long you to cloud the run, of for running, it But is approach with forward transformational a there’s I And and and upgrading So Software-as-a-Service the up that upgrades else’s that else the on application cloud-based who industry. to manage word for on the running In think infrastructure? somebody current. two this to upgrade, that going end are represents sort keeping what’s where also way things. application going really think

about and of instance an platform moving worry to really like a the upgraded in that a at have a look to in progression to without a really logical Software-as-a-Service, work I the is necessity first continually the Guidewire being Guidewire. towards service cloud-based so of enhanced of cloud all step just a upgrading customer And is a software more involved application for

I So positive a it’s thing. think

running order core become there to think that is comfortable that through a a platform. with in cloud goes of application in carrier I host a whole questions

making think decision I that through either services or they’re the directly managed a And partner. to extent that

direction. I and more carrier. step service model, what the to make policy here think is right insurance you a is billing service vision to as that that Does if like a core ultimately, that there providing that’s think the think where long-term sense? that we’re But achieve a of a I want software that in real we positive claims

Tyler Radke

Yes. Super helpful, thanks.

Operator

William the question. next Your from comes of question with Bhavan Blair. line proceed Please your with Suri

Bhavan Suri

just want cloud. congrats. I thanks large but sort X to on and and the sort move Hey willingness a sort the the guys, Tier of up of for about bit, of their guys little question question my follow talk previous taking to

you for just move of there longer, which sort say, have little you am a the have lot you a something have where little a the this pieces then separated is thing. that wrong cloud and and cloud other that, claims, a and more policy, policy, to on like get bit and of complex the have I kind thinking two is a the premise engine more modularize kind them billings big if I pieces or in to calculation the And interest way? maybe? Is then is stays way way So, which can of

Mike Rosenbaum

the you’re thinking way. No, wrong about not

other. things do, is to they’re all step-based customers be it how that unison, you and those one a of that realize architecture, but have very to things we cloud you a sort core these components integrated on-prem you things about sometimes Guidewire describing? of support, services that will the offerings, time, business solution be environments and the historically, that every ends all right, overall different do is in approach at these certainly sometimes those one is even up That cloud-based thing the type cloud-based that the environments inconceivable implement, other that think migrated to migration not would of necessarily the they’re implementation after maybe, And lines would a it one I cloud be to carrier’s of you’re independently work that inside to things another. of of Guidewire of into do systems enterprise running will of in systems being got open, which facilitates extent is other significant

Bhavan Suri

of given of especially, VIN partner you P&C and about in sort And sorts you bit the side, the quick network. then me, Yes. integration, DevConnect take follow-up Yes, past a cool. all little the talked databases. the partner solution on numbers for a if

You’ve obviously with SIs. worked the larger

interest of that’s you cloud. talking sort of SIs when the progressing sort we at on update some lot Just were a sort of how about in the of conference, and had

to out you. there? side. further some color partner Would your space in love services how growth solution drive Thank network of that’s that SI the of playing of get Just in investments to some sort offset DevConnect sort in to your of sort

Mike Rosenbaum

of yes, just question think, one core Guidewire say to and the is things the for of Well, always I relates is that going implementation implementation kind which that answer said, I’d connect applications services. other I and a other back to to

the Guidewire, reduce everyone. transitions. these customers the we up, going make that implementation of it That’s integrate we open expense, deployment it to easier and expense to extent to can we the so to for partners And to be beneficial

customers It on and our a order into Guidewire. integration DevConnect in to of SDKs This Guidewire around creating facilitate investments partners in to part applications the Connections faster can APIs open area was of an of connect big messages. that and surface side

it I time us reduces to deploy think very very, to the implementations. the one these and necessary that strategic the of of that expense all that is to extent

impact a around, lot were just the saw and Connections part that can customers DevConnect ecosystem, these build have customers about very, these I’m service have using deploy expanding is positive implementations. of momentum momentum core focus DevConnect of around. a terms the into can our we it easy the and very is roadmap of that new in connect via for We bullish add-ons to for that in partners positive to how the year-over-year in a which marketplace. of area for terms big our R&D potential deploy It’s very behind them model applications cloud-based

Bhavan Suri

Got you you. my Got you. awesome. questions, for guys, That’s Thank congrats. taking

Mike Rosenbaum

Yes. thank you.

Operator

proceed comes question D.A. the Jaluria from next of Rishi with Your with line question. Davidson. Please your

Rishi Jaluria

a to alongside get execution is meaningful on board indicative right, any I at up it encouraging roadmap thanks InsuranceNow, maybe, I were Curtis. positive on follow was to of traction back needs kind mean customers or it. questions. I laid to expectations, I’ve go-to-market what least InsuranceNow of to be to of follow-up – Maybe, getting just in changes really little wanted a InsuranceNow that, kind I understand regain roadmap think, pretty just sales in the perspective of the on All the got with your to side at Mike. And on for terms there of wanted then taking Maybe, that that product? kind think out that my bit track conference side for are product done on and from I up was and a and

Mike Rosenbaum

Yes.

That a I’d with these with completely which right. I made I is of to enhanced we highlighted company, put I release our that, sales product, for me, in which the starts selling that the the So around we’re implementation, think in approach, with the what need commitment alignment and I it’s place going of experience changes order like creates the the calling customers we The most thanks before. that said visible that executives And prospects in of little about that InsuranceNow InsuranceNow validated to we’re think just sort committed in the guess the at approach that a make GO. – think user bit and want starts we it right, beginning year, of capabilities, platform. as the the by a clarity; organization product that to in the new the comes, other core the the reiterate product of new question. specifically to selling I know decision

for So, that than our probably implementations very and longer under often we’ve decision belt will right. hopefully And had quarter of way. aware, last one you’re three as operating months, cycles the these significantly

and the this able play to that positive said, very our based completely just assess is changes out and change were that But we’ve also, like ought be on those here itself we’ve commitment initiatives announcements changes those that types on the done the that we’re year it this expect. in we’ve that delivered of I’m would we’re given before to clear whole we’ve and business So, distribution. think I the we going the line. created really, approach we the at I to that take to But are just in made, to pipeline made and not fact clearly, whether the the signaled to having that Connections, or we’ve to highlighting product everybody it committed results work

Rishi Jaluria

going helpful. then That’s to ARR it. question. back Got And Curtis, the

us finally, can Maybe, or $X just thinking XXX sequentially. recurring I’m ARR, been understand at – and seasonality our about ARR giving should should just up it’s quarterly models, in not may mistaken, was the revenue us maybe, least that with you’re us I similar it year-over-year? have anything of growth how under helping you I was first be help be ARR, the think time if Thanks. from perspective. we a to and it how million like think What

Curtis Smith

Yes.

report did it ARR not will this forward. So, We quarter quarterly a year last going the about are we Analyst first basis at year. we reporting talked reporting, be this Day, that is on we

providing see So go we comparisons, we to forward. through going be year, that year-over-year of when those year-over-year comparisons this but months be you’ll won’t XX those able

QX looked it’s our is QX of this low In at to when for ARR seasonality, terms across QX, we other it always past revenue, and metrics. us; board, seasonally similar the

focus quarterly updates XX% we have continue versus to in again, and QX. think growth the expected the annual the on you we would last to year this that we’ll ARR year growth number; reconfirmed provide rate, I So, XX%

you So, we’re for making. how progress much sense can a get

Rishi Jaluria

thank right, All Got it. you.

Operator

reached have to closing turn like Mr. we gentlemen, the back Rosenbaum remarks. end and session. Ladies to And for question-and-answer would the call Mike of the I

Mike Rosenbaum

for thank on Thank call. all the participating you you. right, All

reiterate and thanks in Just want here this to to excited how for have a the am all transformation. opportunity evening. good participate and be I participating to so and have

Operator

This concludes conference. today’s

time. lines your disconnect for at may this Thank participation. You you your

Guidewire Software (GWRE) 5 Dec 192020 Q1 Earnings call transcript