GWRE - Earnings call transcript Q3 2022 | Guidewire Software, Inc.

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Operator

Greetings. Welcome to the Guidewire third Quarter 2022 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] Please note that this conference is being recorded. the of to Software, Investor turn Hughes, host, Inc. now President Vice Relations will conference your over Alex I at Guidewire

You may begin.

Alex Hughes

website. Please and from to results may report with Jeff earnings that Executive SEC, I actual forth be quarterly Form of which SEC on our call to risks, results, release is and our of ended based our Chief ones related Good other be representing the and regarding today our A press April recorded such in with results this XX-K factors statements. XX. this of set Cooper, our be the third operator. to on the are XX-Q in upon me risks, These views current and is section not conclusion on and Officer; issued President, cause differ relied the subject geopolitical release of conference events will information Alex financial Today's annual on today, Mike COVID-XX as replay assumptions on furnished complete a Investor the with on our our forward-looking name the X-K well Software's can and documents Hughes, products, and quarter on risk SEC, on business operations, filed Form customer any available call. our materially call matters. uncertainties for XXXX, are found in report expectations including you, today the as statements Vice file is those on impact Officer. call uncertainties following refer our Rosenbaum, assumptions the year include date. and most and Thank of to fiscal of demand, made the and which Relations available press being as and management’s call My Chief both for subsequent recent are am Statements and be we afternoon to as Investor Financial Form should the Guidewire disclosure welcome Relations, of of and

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

And so the with behind to call that Mike. turn now I us, will over

Mike Rosenbaum

afternoon, joining QX ARR to excited as today. us. Thanks, and saying We for Alex. momentum in for that exceeded quarter was another us expectations great Guidewire and strong thanks interest we I'm Good begin on see Cloud. continue by to revenue and

see We to remarkably and and We is momentum our our make customers uncertainty. should product serve all from and resilient, over existing insurers serve progress continue new cloud that well and the period economic demand of on world. through fact this industry an that offerings product with us combined

They and products, casualty important of with is see Many periods larger In resilience Guidewire cloud deals DWP it durable our bringing macroeconomic was ability of Cloud. plays with this indemnifying Tier insurers supporting the eight As Guidewire XX% insurer sales insurers year-to-date businesses to sustained markets, down strong an mission-critical our cloud a for have model. been Cincinnati United X X indispensable most see systems in confidence business customer. Tier trillion are we uncertainty. it top momentum all century. the our most in of over approximately revenue the stability bookings, by of Tier our three $X.X This a know, new inflation in and again have and essential with customers as as some variety comprising already in record for and uncertainty. an I'm third continued and greater business proud insurers of that quarter, to momentum economic non-discretionary for during gain insurance I to contributes and cloud to the Guidewire of We provides the insurance demonstrated at industry the a decades, periods particularly the recurring XX. sold Corporation, model, deals in of States for the Cloud Financial We periods global closed in of this sells and to quarter, sector, wide Guidewire individuals weather we sorts we property thankful of measured and you included industry serve in industry serve industry third role products quarter, which risks. of a pleased X a and against added XX total

billing San of we're also in quarter expansions. and to momentum San National fiscal healthy more customer on-premise their cloud we ClaimCenter cloud Tier cloud systems X first Momentum wins four was at America. our decided Cloud. Guidewire adoption National is this driven remain is as We year. both total pleased customers that customers. in in Santam cloud eight Indemnity they new added see new and and far cloud thrilled and had and South Tier existing the more first X experiencing a cloud we've is to in modernize with existing customer. The existing with and Cristobal South Santam customers this the an Indemnity that a customer reflected migrations by Cristobal, our We're balanced and with policy also are fact across third two Africa so

to to continue exciting out see and strategy internationally. model it's play our So cloud

mentioned two previously InsuranceNow new and cloud customers, We X a including customer. also Tier Cincinnati added new Financial

deals in in of throughout HazardHub, the The and and was seek and reflected meaningful and better success in as the number data real-time two both integration HazardHub see insurers the during is sell in deals for I of policy the HazardHub for with Also we one going reinsurers HazardHub. data deal are extremely cross seeing quarter size. largest XX pleased world well including adopted XX Finally, and another to the strong also quarter, claims analytics their Cyence deals increasingly workflows.

our third cloud to projects of deepen go quarter, go five expertise. complex customer see to across healthy the go InsuranceNow. added the and the with we with continue large deployment and with lives, we to InsuranceSuite to our lives. four progress number learning one brings cloud number these Turning we In activity, including and XX date This These ClaimCenter. successful in and of InsuranceSuite are total deployment lives

their world our of part line a with implementation. deployments to one the went cloud business addition self-managed largest live in PolicyCenter significant as the of insurers In of on

Guidewire X,XXX of As talented large foster make across complex continues year-over-year are of consultants partners, to partner implementations. from and we continue so XXX% projects, can can partner from. year-over-year on number important front. our growing number nearly that said our deployments that earlier, that align draw to we as great Cloud total community progress There the the to increased consultants up And cloud leveraged cloud XX,XXX I community around first strategy. to SI The be customers it's deep XX% and certified Guidewire are now this

this from our new our across where an our provides QX, quarter, to flexibility Each on In innovation continue eight and developer solution our We to application XXX. bringing ecosystem. Elysian we community total agility new to marketplace added experience. leverage need elevated Elysian, release. faster Guidewire first launched solution partner supporting Cloud and to Platform enable customers we grow to product partners also the and valuable delivers insurers new innovation insurance over more better our our It solution innovation, speed to embedded insights their also market, deliver customers. accelerated easily risk

that, great today's which are for QX, about making guidance the are operational we In establish on long-term we're momentum share summary, I'll We pattern we're Jeff excited year profitable are is this momentum our believe But progress drive reflected which our heading with and our all we our call. in release the growth. positioning add cloud with and to about durable product and ourselves pleased will into ability feeling to that our customers. just new

customer that fluctuations a a strong is and to foundation retention. a resilient that We product stable customer have and creates world-class base market

the cloud with to I'll expansions cloud, to up And embrace that, Jeff. success have we us to further modernizations. sets increasingly from new over and it migrations, date insurers turn customer drive adoption As demonstrated

Jeff Cooper

expectations. Thanks, had We Mike. and our revenue strong another of ahead quarter with ARR

at by ARR driven ended and ramps. constant a year-over-year Third million, both new up was $XXX or on quarter activity XX% basis. Growth XX% deal sales currency

across the $XX.X cloud ongoing million, last due year-end. $XXX.X to adjust strengthened third in currency $XX.X Total up during as been benefited XX%. compared revenue. in Cloud then As we Services report was XX% have quarter year-over-year. million, we was $XX.X seen were revenue, ARR up then updated at FX License of which year-end. was million, to all increases our performance ahead Services revenue would million, expectations ARR Subscription up components was exchange constant on year support our have of rates $XX.X of when to subscription basis for visible the revenue a continues since reminder, million year-over-year. current and a was be If number X% revenue XX% strength fiscal ARR year. QX from was revenue stronger implementation currency revenue we million, to the and rates up US programs. dollar $XXX

was have a have negative investments subcontractors is we meet services will million. discuss the in decline a new Turning gross margins $XX XX% basis. to positive This and demand also margin third to profit Overall hiring more some to compared while margins year for XX% meant XX% early which for early To high board on toward And was gross drive revenue profitability and talent was these compared Gross license services revenue. we quarter, Year-over-year the ago. services a gross cloud success, billable, support our higher revenue to interim. and year X% hires margin cloud were and Subscription a resulted used margin ago. and additional we mix shift XX% and XX% customers. ago. compared from to gross term become alongside on support impacting from the made subscription away year non-GAAP

license included billion to have million. Additionally, number bad $X than This Adjusting arrangements fee we $XX.X invoicing. we a cash arrangement million and extended with equivalents million, for expenses. of term $X.X related operating We longer into loss charge originally a had debt where multi-year this that are for signed with investments. some quarter Russian Operating ended fixed customers bad projects G&A one-time this, a of expense these have cash, longer have was the a debt no expense loss of in a impacted $XX.X been customer anticipated. would entered and

in are to $XXX Guidewire Cloud’s the by million ARR for year outlook outlook our million million. for Turning optimism to and our our This $X reflects full $XXX increasing success. XXXX, market fiscal continued we between

we notes, Mike a software As to resilient industry. very sell mission-critical

in continued economic the nature durability and attrition We uncertainty. of our provide a on to months trailing than in this from The customers X% and less see removal of healthy QX. $X includes million have periods ARR demand ARR non-discretionary rate basis, platform is Russian in our of strong XX

our rates of the For our foreign usual approach, last year. ARR assumes as our of exchange end fiscal outlook currency

exchange exchange at be have couple the year-end. For of benefited to will our approximately a rates there remain rates impact $XX at ARR last million ARR current years of negative year-end. unchanged, If

which a now We million impact even are this strengthening be with to $XXX of also had and revenues. expect denominated dollar, outlook we the backdrop pleased which for revenue, raise non-dollar $XXX I'm between on US outlook to increasing a to negative be able million. has our total

approximately revenue to be million $X support guidance and is be to to revenue and approximately Expectations growth, to higher subscription closer be XX% -- license $X expected our we are guidance million, largely and prior our million. XX% overall than now revenue million services due and subscription representing subscription for million year-over-year our prior unchanged $XXX higher to expect respectively. expect revenue than $XXX $XXX to We sorry,

just to and $XX the operating gross no negative expected to for million is $XX I and cash expectations. flow higher expect continue between XX%. margins subscription million We an that updated margins our be expectations. which There this from total are be the are by expectations mentioned, to X% debt support and the to revenue and income, is impact to breakeven offset loss operations of With services we to our be fiscal year, reflects operating change partially of gross expect margins to gross margin and expected respect bad XX%. Services expense

to we confident ahead continue Total we XX% is As we can ARR that growth XX%. to growth deliver to in look accelerate to to fiscal are expected next mid-teens fiscal XXXX XXXX revenue year.

flow and cash into of early more Analyst and are fiscal we overall the insight We'll our operations third earnings call the operating expected year. for our expectations also pleased We point QX of quarter. summary, from October. event in Day low performance will our margin in XXXX on grow give off In our this with

is Our guidance QX, to for fiscal seasonally forward now for in we looking reflected us. always our confidence revenue call a are questions. the strong quarter year for higher which we and the Operator, open is can

Operator

At Instructions] Our a session. Heckmann question-and-answer [Operator first question. D.A. with your this is time we'll Davidson. conducting Please Peter be from proceed question with

Peter Heckmann

will Hey, migrations taking good seeing like in feel the afternoon you're it customers self-managed self-managed my at and looking that continue you more overall think it do your and wanted that cloud an sounds deals. current confidence cloud to of acceleration to thanks and Do are for I questions. the when certainly ’XX? see, you getting

Mike Rosenbaum

I I confidence why and with I is to as for and a would does say, as know market. every just and implementations word used those does base building. Yeah, the The highlight building to go customer the that's broader of that quarter, the attention we'd if it's like don't pay the lot sure. we lives successful acceleration,

growing and line this around year feels the especially more projects confidence those line into little They're if and us, the these certainly of next and -- in to appropriate of is is exactly I over bit sales give inevitable it is and move this when word in in quarter, going growing in our keep things when saying our but like control, sometimes date the this to So fall lot year. us certainly we're confidence. the implementations a a outside cloud quarter to confidence up success

Peter Heckmann

talked headwind, points? to some then points FX you XX% include that basis XXX year, revenue maybe Okay, of basis that for maybe next preliminary growth great. total commentary to And preliminary about of does sort XXX XX%

Mike Rosenbaum

Yeah, I think fair. that's

models, as As would we build we of forecast there. so our include are kind some up using FX current headwind rates that

Peter Heckmann

Okay, back get queue. great. I'll in the

Mike Rosenbaum

Thanks a lot.

Operator

is with proceed next Our Please your Blair. Becker Dylan from William question. question with

Faith Brunner

build to especially it's Faith content, about this Thanks questions. from integrations Hi, taking looking how and global for perspective Brunner you of the different a businesses the for platform application? use for was much as lines like at I ready my performance think getting the just up on speed Dylan. cases, the of guess and this

Mike Rosenbaum

sort specific of Africa, reconfiguration The rolled in our that the to do guess answer ability case cloud of all model any Yeah, I'll behind get product. business it's to a good to of out that the what's operating and ability to upgrade whatever world. on it successfully business this question. of about lot we and helps us. those use a with necessary I of different normally international so is That's out the around to it's has the Cloud cloud, talked around regions it side run the prove cloud and our it with more line less that certainly implementations redevelopment, South in win to associated Guidewire the of of are lines supported that's over migration get a kind flexibility

the built so, building just confidence. get actually, cycles start move. into And customers production give see to partners these helps to experience with XX over belts all sort to that and new this the lives, start but the it's ecosystems to build, now and and of certainly to convince projects having sales of pretty up make their adds get under it's us It us go experience not start up just also to these with the exciting effectively

answer your question. hopefully So that

Faith Brunner

one probably what environment, getting the this you macro a the No, customers, that's touched situations having? about been just important up, given but anything on they've are similar that coming then know from like through what them, on anything you're quick time, just overall follow-up. Apologies, And And I earlier internally? discussions you're happening at just you're conversations new hearing longevity before, perfect.

Mike Rosenbaum

in durability of just to beyond on customers It remarks. and support -- prepared And out. had we've the it the we that that was and a that's general the year the it to serve. wanted wanted why speaks out the I that call use Nothing we case to durability call phenomenal we we think attrition,

does industry look there's system, the I such do but of does case and support what period the industry if at support insurance think controls and well. will through and about is even -- lot use how that continue a to to to platform inflation it of everybody with to? how is how it provide. not lot inflation, The of a of the unfortunately that relate a built we that does will looking the relate like, the continue period into a industry flow prolonged does Guidewire, We and industry that the provides will think hopefully

the will I say -- this with that conversations think is from industry this. adjusting and it that despite dealing you So you to and it certainly built watching of basically get immune I'm that the economy. it are to is are it, They be they and having can't -- sort through ever in but broader see something be the uncertainty resilient to built

Faith Brunner

question. Thank taking All you Awesome. the right. for

Mike Rosenbaum

Thanks very much.

Operator

with VanVliet Our your is question. proceed Please from next question BTIG. with Matt

Matt VanVliet

thanks Maybe question. Cincinnati the Mike, and on taking Hey, my there. for I'm curious net Financial afternoon, good new and deal

displacing drivers the of front selected deal very similar influencing normal walk some looking Indemnity move of example? migration Thanks. that could to maybe cloud, that, on key Cincinnati you're are the either maybe to through you like looks there or Financial characters process of for of If and for the the or drivers set to sort then different choice sort sort there why it there, deals competitive some with National was there? And maybe the line the in of the what a them Guidewire competitive is even of is at what are the

Mike Rosenbaum

opportunity incredibly it's with Thank question. be effectively and is Thanks support phenomenal we're serve big Cincinnati a and enterprise of to is, Yes, ClaimCenter and what implementation Financial X insurance Tier a refreshed. excited the we're organization, partner out This replacing you for needed company. system a about to very much. is XX-year-old that's

prove that extensive very, they We these very looked of it was the come that kinds very, a that obviously This ClaimCenter and we're ran all at from was make And where have in out, they implementations the like to the that’s fact should going are excited more XX -- of detail I and gory something to cloud participated years process, positive very years. process that the proud the that for, evaluation said, excited an so they more a ran and [indiscernible] cloud available. like what it's we maybe I deal fact we're a making we're to implementation And say, to life think, sure now successful of beginning. said, XX endpoints let's with is, in very real I them customer. successful And be a opportunity all signal. it's one point that

-- we successfully terms that that and that other base when to we that this the to BillingCenter those think this the Financial those the for think ourselves be to advantage that We Cincinnati the a things we've run great functionality single maintained, single there we're those a product is the in together approach architecture lot sort to between logically cloud, the products, again, that types a on customer to PolicyCenter have BillingCenter successful compete for of across synergy the excited that speak, that to see the was PolicyCenter and it's companies between would which of I an strategy about So can relationship National that have how component real configured, of led about exciting it's getting of say prove in and products, implementation -- and for the a how I InsuranceSuite. is work of in quarters. vendor, for upgraded, just opportunities. of the of bit to a it benefit all customer work like new modernization win. that how ClaimCenter of up go-live stuff, in us talked the think to implementation. case, core we going of around our hard can It's so how and -- of And that component positive those so comes in in it's system eventual that it's on and types is a previous those grabs I success in But able Indemnity,

the thanks for So question.

Matt VanVliet

should of margins? there reduction about out we're away mix, the or will Jeff, of driver helpful. to a start of over go we mean I maybe row now And Yeah. then think -- is live number a enough bit And that a meaningful mentioned or to maybe customer number XX% now Shepard customers just I on that gross a still that resources see years there? not far that you and close No, couple think quarters along XX way in with you influence of we've very and should so down some of winding bit a supporting maybe reallocation process near be in side we many now, a any cloud versions support cloud. customers being to of little to seen thinking a live maybe from that yet, term little to we more Are the starting some think start XX%

Mike Rosenbaum

if I want first let no this stick appropriate half be this first to describe of guess, way me I to care -- that’s all I want take -- this. this. at

are think for take seriously. about prepared how important customers. that I talked we our implementations very lot that we in And the remarks a these

a about an of with important brand when it's it promise of what think the part part it's are important and an greater long customers I the Guidewire. than think decade often important brand, they of is part a building relationship buying very

are to recognize these super take often that are do the very to whole bunch and company's recognize constraining to want I one there of things So complicated transitions. on these -- ability need that that of a projects is we really

any so, this have And of sort force long us for detrimental run. in attempt it's would that I’d just I say, the issue, to think we

a real product transition, cloud, the push facilitate doing desupporting to think So we building terms to of to versions. and make sort we it long really in make I that it mean, it's compelling want with by of engineering don't cost create as them. smooth really obviously that I in really maybe of and it part as support Guidewire, as to. want just there that I implicit and need part the create make is to of customers possible, us really effective on-ramps we and easy -- that but want they not have but the will it's and cloud contract forever, expectation

don't I show Jeff financials, I that about comment feel anyway, it. strategically but about know, could how that's So will how up the just in

Jeff Cooper

our constantly customers that and investing in aligned terms this more how previously. our market had expectations. playing that out as add the more the date of headcount it investing to been how momentum, making we do we're same of momentum allow in we levels evaluate to customers seeing, product as organization our vis-a-vis we're to is us pretty that support more we've To think we of without is adding has these platform I and And scalable can handle that

kind how largely balance part some of playing out projects little early platform delicate we and is line our a how how in complex can expected, certainly this line is these navigating our the expectation, of to to of of those a thing. and But playing with of bit so out that scale manage positive we is this of the it all-encompassing that. which just a add So journey, are with ability all it's because continue efficiencies in

Matt VanVliet

for All the Thanks insightful right. answers. Wonderful.

Mike Rosenbaum

you. Thank

Operator

next your Rishi Capital question. Our with RBC Jaluria proceed Markets. from is with question Please

Unidentified Participant

guys gotten Richard Hi, macro in Rishi know the backdrop, that, have on Thanks my a just the this just how just I curious inflationary Jaluria. a taking pricing context and source lot is you willingness of question. some maybe but for in maybe leverage of In contracts these I'm renewals calling for to of general? your the on use in as ability considered and environment that and migration questions of

Jeff Cooper

quickly very So customers I into long-term our with customers comment a relationship. enter plus We view this relationships on long and can't that. decade as our

long-term our kind we're negotiated so, certainly make a environments, annual within surety, like a that it's that something avenues we contracts expect cycle tend weave pricing but there long-term customers And --because not contracts our now not we behind are sure renewal to falling in to through for can this. of that inflationary be approach very an take would our to

we price does which generally written grow premiums, industry. the our on direct Now software with along

think environment, that well And an necessarily so we cycle. inflationary are capitalize protected but in we increase not something we would in pricing a

Mike Rosenbaum

to go will inflationary up, -- think claims which Guidewire time inflation about to about as pressures up, premiums DWP this to and be that in going will time think be to over over respect is, another with DWP in and way another so way And pricing. reflected reflected cause

I it out play and So It out tied together. play but think doesn't expect year-over-year. it is exactly all does quarter-over-quarter,

protection sort degree that's so is to into some built at Guidewire. to And inflation of model the

Unidentified Participant

And super to then the just one and similar the products, quarter, so Got analytics helpful. on attached. quarter another it. strong last HazardHub data That's XX and strong deals

color business? bit give on of the just on and land or I deals you six size expand deals mentioned, more think are front? that side the XXX,XXX HazardHub think what to product so of look can a then little last around And motion the see like last tend maybe I same is the on continuing Data the to quarter, over you you Analytics and quarter were

Unidentified Participant

question. great Sure,

continue it call to sizes. the is in do about those but it we not healthy something did this we specific still respect account very HazardHub, out healthy So with to I some quarter. sizes, see deal did chose call we are that very like healthy quarter, seeing I deals to see, in we're would and we excited deal last

think usage and company, a in you the every to asked can of use core can cases. And part sort demand about step steps, predict in that's to so, in make pretty also people an you those narrative make as allow single of the step the We single to Then this to every business data to deals Claims manufacture and data to being better and underwriting you workflow that large could insurance. said, approach and we're and called has of you And data a really decisions, workflow, -- efficiencies. a see And very, for big really in but remarks, just with on I direct better sort the addition ability we're insurance reinsurance relationship also and started to efficient analytics. the underwriting is the use steps better, can just and the we seeing maybe potential And unlocking think more you getting using it, I insurance, industry claims and automate drive smarter, operations analytics companies. I'm I -- that of faster I this. workflow, large as the what with Guidewire out sort kind business use bit of a data in a excited respect sales driven, glad like very about. analytics

few either we to just be deploy that analytics already you XX models that's when the make, which that InsuranceSuite we platform we initially about, natural called installed investment customers be -- we let's some have us in growing for across to can it, Predict use of that ClaimCenter your how results be an thing using for inject with and that we strategically. out the completely back called And a out and PolicyCenter that dozen data sort specific you've should an core also the the in because those extract around can what us is of products of it is case of made and the in and predict doing instance the a acquisition you business models into But then call have a in HazardHub Guidewire production predictions of, importance product in HazardHub so, that or you Guidewire. embedded build are InsuranceSuite, now lines and can the talking running such that's more models value just out the getting workflows Guidewire

relate relate both really to to core as business of products -- they So opportunity. about sort the and those cross-sell of we're excited as that to they connection

anyway, thanks. So

helps. that question. appreciate the I hopefully So really

Unidentified Participant

Yes. Thank Super helpful. you.

Operator

with Our next proceed question. Radke from Citi. Please with is Tyler question your

Tyler Radke

thanks taking for question. the Hey,

overall in is And labor you. then how issues environment just out called which the and analytics, to a releases Guidewire, in reduce what of partners. I'm autonomous the product think helping on cost data some to that side? and and around think do quarter? Data of curious much on you extent looking and last year we one was the with cost the of companies and you're the autonomous claims, working the I Thank that some you was things So strength driver saw just around at the Analytics conference

Mike Rosenbaum

of be and out more them analytics getting the both rules efficient just be deploy to you Yeah, -- out a the learning sort Autonomous play side no hard this and a that’s single is after is, -- a to and to I them step. -- to great and autonomous, testing Running models like It's automated that it's and model goal, day those It's areas vision. going the direction. side not those and going is, working magical question. is and really it over to way day the it's on great the after going make think rules. more There is machine that that application that great it's Guidewire, from facilitate something implementation about concerted identify to way a but we're and a instead partners, from going is this in everything building day achieve customers effort can time. great

you is tell going see had completely I house has can your with think, somebody process is are things and you everything eventually, walk this because often when to at through you which today to okay discussing and catastrophe and very that of is we're flooded that. the not going executives be maybe we for largely roof managing to autonomous, a to is, off, an autonomous, to or whenever company always insurance where who blown your talk going talk about it's insurance they're the So one pleasant things you

is that they is ago, do cost of it's yeah, part the first, always so it? there five do hard this, work sort labor to -- weren't of that that possible, exists. and there much probably they years operating and years this more now, I a -- now, also different tools in on I think, that of ago the days do efficiency got platforms there's the but of drive is think there part technically And this sees XX these human general is So think that claims feasible are weren't potential it certainly to whole also really What's it. you've I the industry driving of especially side. possible. more they available part just to bunch I is are there much a just

a systems that You with like integration with system to framework, of an to these modern getting build enables you getting structured really has to can be modern have hard do to data, that work first Guidewire, the application platform a able be to automated. a that

And the think a to has work that we self-managed of implementations I lot XXX I or Guidewire, either have so ClaimCenter think industry --over of in put XXX cloud. now

autonomous to that done then is of space is lot created it for So that automate, and work this a sort of potential future. creates now

hard button of by from tone is So autonomous, driving I to be makes driving work is a is last can to be sort want efficiency I whole think of be the exciting know, repeat I over world operating that's probably going operating and to little potential I the the industry. that yeah, it's but labor my a it we to tell magic it, it, it's it's I really driving that of think it, of competition voice, part that, press improve it, cost years going whole the going is of just driving -- little don't to insurance lot not the

So, does that help?

Tyler Radke

one Yeah, Jeff. the Maybe enthusiasm glad and to that's for excitement. see And great.

-- go a preliminary comments, on next margin good side. mid-term think targets? some kind thinking moving talked just few one-off as about away like then the of equation I do operating those these issues comments year. something And you're feel your you pieces should are do that in of guess, think Are about gave we of kind of side you tracking the So be your for in targets? still feel to that you you the gross to or margin us about mid-term expense headwinds side and these we kind you terms of

Jeff Cooper

right? critical we're these on that of a bit So mentioned talked think are us these expectations Yeah, more these We with for that to investments early that call making we our lower about services for I cloud customers, year. the make. are transient, is items quarter investments little to so really this the margin and the some confined

longer that services I we don't that. us term would continue drive assume model would see Our a margin. that normalized And towards we think to there's that can’t pause gives more anything

had bit arrangement, year quarter other to that. annually The was and out license we item but paying longer was that signed obviously customer called a collecting that the expense that five debt related we're the no bad us unique a little term in was the Russian

So flowed through that G&A expense.

fiscal in don't we're highlighted, feeling budgeting my have work about we more two as of about very lot we'll the around the impacts, think this are is of But as and work any thinking year. in productive then, are both thought right doing year how past. update in more impacts things of those it's and And consistent a on the potential, opinion a folks to kind next we've those with still material longer-term longer-term very way. now those LRP the and we So like that we're we're

Tyler Radke

you. Thank

Operator

proceed [Operator Please Turrin with Instructions] next question Securities. Our Wells is Michael Fargo from with your question.

Michael Turrin

afternoon. Good Hey, there. Thanks.

bit. the clearly the is base, a the backdrop referenced resilience of customer changing macro You

You're FX for things, but company a some next years. fiscal talking XX% those number of XX% the we preliminary year those here of to haven't and from for QX, providing levels seen in still growth outlook in about growth a

So what year informs just that What's visibility the initial outlook expand for maybe here have? currently? can next you you on and assumed

Mike Rosenbaum

a do look. little helping an consistent an people cadence. with to Happy our is business complicated bit understand year look it to We to our provide of our so early it. model with and cadence And Sure. into typical typical is early is next that

about on for levels just I dynamics important think same our the is durability this the license in particular at comparison that line on in year to the services to will we're the License that levels made due seeing and decline, as there mix, the and --- outlook. the the overall side. quite a we becomes growth just revenue drive help we not to grows factors. year biggest and year-over-year is are continued difficult year, expectation thing to the FY experiencing ahead side. the and part revenue a revenue inform this preliminary will other that some And on some revenue that then meaningful subscription continue of is as delivery most and healthy the and of next us There implementation the look we ‘XX talked that are side demand maybe more

expecting growth, much, revenue this more are than we're a year. not not what growth the too overall more of little a to much, see too maybe not but bit we so And there, than seeing bit

visibility how continue the we've kind demand then put we And of growing steady to and and together so it the just is, see with cloud that that's into deals.

lot these back have We've to associated levels, come attrition seen a significant which best with ramps As overall deals it. in ARR are class. you know, historic of our rate

so of increasing And and this visibility to gives out. all into us that going play how model it's

Michael Turrin

very all That's helpful.

some insured at Are changes the areas change market how billion environment? just thinking balance prove environment the allocation? $X market does you position and tech that about, a durable we've the the current year referenced there you're also You cash, other all out more seen could just about for of of in in think sheet than it given with levers capital

Mike Rosenbaum

the into expand confidence new a more have customer product to the that product base the for our the ability cash times product we a areas. question. to the with the and paying us. close we're cloud cloud builds in think I've We're potential us move to And It's great of I happy that Yeah, said position number it. flexibility the affords certainly that attention to

mostly that And impact feeling overall activity, on logical of and it good about multiples, an what's I by that. has the for that's kind potential driven will so Guidewire. -- conditions think I like macroeconomic we're be fit wouldn't that obviously but mostly strategic things strategic

and of the about we every that ability are company. cash on so it feeling offers. position component And better flexibility better and to execute and good really that maturity our the the And baseline cloud feel around cycle

Michael Turrin

you. Thank

Mike Rosenbaum

Thank Yeah. you.

Operator

is Our Securities. next from your with question question. JMP with proceed Please Joe Goodwin

Joe Goodwin

and my taking on for you question Thank congrats Great. the quarter.

expected During of guys billion and billion XX are in [indiscernible] XX XXX the data of how year. that's but I you relation there, we the data the guess data to grow terabytes, your XXX kind you your managing and Is and by Elysian two, end share there that's to that obviously for what's demand any terabytes should driving records analytic solutions. respectively, of correlation to And announcement of in Guidewire exponential growth think about in then there? just that? that

Mike Rosenbaum

Yeah, question. great

and key use different part for then customer of probably is a significantly cases, to analytics switch the traditionally And as So of system is as you right? platform, data part of this approach to Cloud deployed one core core implementation. of that it this a touched on, lake components Guidewire this the is, data

creates right? for analyzed, them. used the that can transaction the immediately company or to a to can we stream an XX a be We I lake effect and which line, available it lot analytic company makes it lake, are to -- operate time create data through be that everything down transaction streaming something is of to suite utilized effectively. be changes every mean, to of single analyze that information out instances data then the can either this insurance available years that That more this records. It

you is I you think that, analysis the that don't know able often to of about be one way to it type to think want do.

able the think think I sets of to this to and absolutely into that up years transactional component just use not make the sell customers analytics be right? do out the in, the sort will the cases cloud that whatever interested to we is analysis for taking of so platform be future it and data offerings, the positive into an use are platform, base. you as of old, benefit to the respect more and something able this to for approach, And exciting data the analytics today, this increase. sort more but build of We on So customers they're cases Predict we customer and our to that connected. think product available With you

more don't the and I more build cloud, long-term is so And get time over an it's that product to strategy. but -- important part I opportunity of will it of an these that think as more we of the companies

yeah, So, thanks for the question.

Joe Goodwin

Thank you.

Operator

And end We closing to the I and now over the remarks. Rosenbaum session. answer reached the for question have of will call turn Mike

Mike Rosenbaum

a increasing Thanks continued very much. the everybody insurers. X’s and X cloud with here validation opportunity long-term and new at momentum confidence and in us Tier customers great gives I obviously want It's our across the Guidewire. and Tier with to of thank thrilled participating existing today. strategy call We're for on the

on I QX of you up much. the again see of forward rest to we'll look So the many with Otherwise, very throughout quarter. call. the Thanks catching

Operator

for Thank time. conference this This disconnect may lines you participation. today's and your concludes at you your

Guidewire Software (GWRE) 8 Jun 222022 Q3 Earnings call transcript