GWRE - Earnings call 1 2024 | Guidewire Software, Inc.

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Operator

Greetings. Welcome to the Guidewire First Quarter Fiscal 2021 Financial Results Conference Call.

[Operator Instructions]

Please note, this conference is being recorded. I will now turn the conference over to your host, Alex Hughes, Vice President of Investor Relations.

begin. may You

Alex Hughes

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

on a our provided certain reconciliation data to on non-GAAP otherwise. stated profitability non-GAAP to Reconciliations are A refer financial measures in release. All and commentary basis, provide website. of posted will in our supplement IR margins, is to and press information We the additional investors. unless on expenses measures also also non-GAAP to additional are GAAP

now that, over to the Mike. I'll With call turn

Mike Rosenbaum

thanks, We're a you, to great of joining continued to Alex. I we everyone, had close year, off this execution. for QX following as rates. quarter to and and characterize strong the a today. where afternoon, Good see start momentum high continue especially Thank this record it's solid one

good deal a as as last We progress also month. Connections are the had at tremendous customer front conference on well seeing operations and in

record the attendees. direction support We provided providing about our with the in-person tangible was had attendance X,XXX The event noticeable, Platform customers. strategic Cloud we our of and progress to and validation and for business impacts great enthusiasm are and our

impact franchise that the building positive produce and steadily long-term We have a the are a profitable commensurate durable, is P&C and a leader. will vertical on insurance with industry, market that lasting will that growth

I'll and key had on at the last a to brief keep month, Day fairly today's speak my we Since business. share Analyst takeaways remarks chance

ninth in to digital and and integration continues in on the builds steadily with Ins deliver and Platform The analytics, made Guidewark and Cloud orchestration, was of processing monitoring First, X, advance functionality and Platform, data, December consistently new Brook, Guidewire and automation, available release. greater pricing. will capabilities release each Cloud Hakuba straight-through

interest to to release which our customers, greater grow in helps benefits and Each greater brings platform.

the the X in suite for first closed to sales the manifest including to we this cloud. in the including quarter available leg be seasonally continue deals closed sustained This, X Cloud. QX typically X We full quarter, quarter, the in we commit first probably will migrations a insurer -- Japan-based following InsuranceSuite to cloud despite momentum. interest see being Second, InsuranceSuite in another

it X also innovation including offers responding with maps. that increasingly new competitive Cloud Guidewire strategic to efficiency view road technology agility, And aligned Platform deals, and and Insurers another the takeaway. closed as greater are their net and

I is positions success us opportunity. our and as longer-term excited data about am is as something something analytics, a Third well and which cloud for.

core continue an few systems core workflows helps was to on hazard As to including adopted scoring decision-making value grow underwriting and by activity to Hub claims. provider, property Hazard was have InsuranceNow a just the seamless real-time a from greater to drive Florida-based sustained we partners, offerings its InsuranceNow. analytics SIs opportunity around for to policy, Hub platform. and a solution. unique Hazard see months risk solution to and and we pleased after chosen our data insurer, and a core adopted layer and drive I ecosystem and proprietary and of it nurture which with Fourth, greater its integration providers analysis

we more Deloitte, migration In have Cognizant, Capgemini, PwC SIs, EY now the and leading quarter, achieved cloud had X go-lives all certifications. and

is the delivers. was for advantage for ecosystem speed and were and Connections the previously, that agility, of the customers. improved our and stories highlighted success tremendous As deliver a innovation drove home me impact Guidewire The our our I shared mentioned platform

insurers insurers have commercial of from much the strategic and start to Guidewire stay cycle agility Insurance, And only complexity continuous also and market. how now Cloud by insurance manage leading Platform successfully release to Insurance, with Guidewire and a providing improve Cloud The Cloud that embedded speed improved I XX%, downtime adopted the through best live when delivers platform already response XXX-year an seen X really months. Platform who a by largest United greater times, insurer the these large current go moving and OnStar history, times product while supports creating XX% illustrated in illustrated one States, Guidewire scale, achieve specialty optionality the setup in agility innovation. to for was CNA XX% launching in with spoke improved and GM Definity They to and XXx. quote platform reduced insurers, deployment resilience, greater XXXX Canadian need to cloud they the have thought times about the

to in platform Jeff this drive even greater about all of quarter, and we An around expansion doing to also and has were always manage improving part expand talk we sell, efficiency efficiency. and more above and As continue while the the of and objective pleased are see The the our objectives is we been platform, this, our all margin to not most forecast. greater company work key our innovate glamorous continuing critical community additional the but job. to through organization will

release financial Sibatical and is exciting And in have these back. we her all efforts the very these Priscilla ending past of continued to excited flow It see finally, that quarters. are has Hung been soon, through to also announced our today's outcomes few results to to we

role, not do be we return very she'll the we to continue to same are senior the to her employee While operating pleased an at and company. an that plan for adviser invaluable

it to the discuss turn over I'll to financials. Jeff that, With

Jeffrey Cooper

finish strong into the finished off Other We're the revenue. perspective, in focused and and high Mike. beat of mix components these it details, operations. subscription also is support revenue services three, gross and and end of doing overall largely line our support as year about and was the at above this were on, subscription outlook our outlook, driving prioritizing how we the sustained $XXX margins, Today, to through $XXX higher-than-expected million. Total margins; of led above also a I to million, our but primarily revenue From flow see just greater a end Thanks, by and gross with and with one, the start we areas expanding XXXX, financial from was go in to margin, great cash and we'll expectations. outlook. two, increasing in and talk we're subscription each very entered updated ARR our fiscal high of this primarily business. momentum our services are due I'll of revenue in business; ARR

basis. which quarter, $XXX XX% ago. for we gross profit was profitability to year-over-year XX% Gross non-GAAP growth. a Turning XX% the to on margin year Overall a discuss representing was million, will compared first

increased This the compared year cloud was expectations from Subscription and XX% of due gross margin and our revenue, efficiency provider. infrastructure ahead to services of timing credits cloud infrastructure a support to our cloud XX% some ago. higher-than-expected was

confidence for margin positive we This negative profitability targets quarters earnings was this work We turnaround gives ago. in are year us of is a our that a thrilled have raise with to X% result prior year. gross profitability Services to compared many XX% the it discussed as result calls.

and services. margins And XX target basis, gross percentage subscription Services sets our percentage total margins this support start year us demonstrate XX On gross profit million results to exciting expanded points. year-over-year in the These up to a percentage year points. margin expanded expanded XX progress margin expansion. hit this for of gross to points gross well $XX and and annual

hard the to teams our do do to to targets, services work us the number by work want long-term of product a team team, this unlock cloud all operations have recognize FinOps the potential. to still we organization including Guidewire, to margin and the While development team, teams, the support get help I our at

the of gross with profit This when of midpoint. million momentum million positive expenses. at compared line $XX this strong this of margins operating negative an to is gross million from $XX came About on a led All came the profit million. operating from $XX.X beat $X.X outlook our result and prior

in million But year. million than expectations. equivalents We we expense cash million, and million to hiring QX the generally from the in quarter $X travel $XX saw internal ended the expectations. was Overall ended we was with expenses bit compensation and our timing later a $XX On $X investments. the which expenses year, certain due is stock-based is X% our million of $XX cash negative with now to slower at in operating of cash, last Operating than the better which side, lower and expected. approximately expected quarter up flow million, $XXX line

other QX related flow are reminder, sales employee expenses lower always year. the as to a and fiscal the out commission As QX a And result, annual QX. quarters cash is in than in bonuses paid

XXXX. ARR and line, and the to we measure targets. we for our Now go are way our on pipeline Starting feel our top confident in is the ARR. still let our outlook year sales are maintaining updated best to annual me with outlook hit momentum, overall through fiscal track for

our maintaining revenue. total We for are outlook also

be a in $XXX approximately and true-ups, now We we $XXX revenue license subscription revenue tempered services bit million prior to higher to revenue expectations term expectations million subscription approximately to and revenue. DWP and our higher support million. than We have in for due expect $XXX expect

away faster previously from Our services revenue shifting is bit a forecasted. lower-margin model subcontracted than we

Additionally, more implementation of and engagements, the which our are more is to great. partners continuing lead

us FY puts expect is the for schedule when year, basis, with our XX% clear to the of focused to margins an we XX% on subscription to and to be of on fiscal the product that XXXX. and work compared profitability, support This teams for and gross percentage investments we on now respect non-GAAP discuss will to increase Turning the XX%. ahead hitting made It points target 'XX having efficiency which desired scalability of a impact gross margins X hard have of product margins. we and

to we in million conjunction excellent with expect gross are as We this in measure by: XX%, continue track two, quarter, margins deliver we of and ability last hit year I to our mentioned services partners' success goals. to $XX outcomes; services deliver one, will our ability customer and gross profit. our on professional services approximately these to

'XX fiscal the and As midpoint XX% of to our operating With we for full year. year. million gross approximately be so of to respect overall a operating expect now tracking between outlook FY at is margin This we the income million we income, $XX our the are $XX raising are ahead schedule. to for already target, result,

this as We the by we potential momentum towards are profitability the thrilled of unlocking work business.

stock-based $XXX X% compensation to million, expect approximately be year-over-year growth. representing We

$XXX are fiscal cash operations our the year. and We expectation from $XXX increasing between to for million flow million

to our QX. for outlook Turning

expect million finish between million. to ARR $XXX We and $XXX

Our outlook $XXX for million $XXX total between is and revenue million.

revenue support million. and services approximately $XXX approximately of subscription expect of revenue $XX We million and

XX%. and services and to margins total of breakeven XX%, subscription expect around to and support be margins between approximately gross be XX% We margins

We early QX, onetime an million a services reorg in charge. approximately $X.X small which did conduct carried

mentioned income respect Operator, profitability operating you for Day, outlook we $XX our for flection questions. ability now an open expansion. as million. $XX margin call Analyst point million to to at it at year. was a exciting Our with strong are can demonstrate In and is between and the to we start summary, the And

Operator

[Operator Instructions]

line of William the And our first comes question from Becker Blair. with Dylan

Dylan Becker

you're applicability decisioning Appreciate with versus towards change how you maybe kind of discussion about the with aligning question interactions out or kind kind and called evolution out is championing infrastructure to business as in industry side. value and flow I business think tangible a . your Connections that of customers. of IT here. important we what of wonder the extension into you, the through Maybe, Mike, kind conversation around the lot Conference that of that conversations starting through around and applicability play coming of seeing the with

Mike Rosenbaum

Great the of us Yes. example subject. great an question, on Connections opportunity and hear about is this to a talk directly from customers and for

I the cloud the history story the of things transformation proposition, began complexity, operational value think at if you like with about IT-focused The think support Guidewire. infrastructure, that. here really reduce upgrades,

to then to really about to we've of increasingly is in ski organization to like All engineering, not improvements you all business that a times system plumbing, updates. story ability runs release twice-a-year think us product all Cloud, it hey, effectively, but the really X momentum market. resort core release the we that value those subsequently the ship the Guidewire release, doing customers you and system core a speak, in necessary over can of But first, have system differentiate facilitate can have what's a so just, that of shifting with over to that achieved -- year work, receiving the gives the consistently so help and and work we release that's a importantly, as a our a then schedule and which cloud shifting of exciting schedule, releases release

help can your you your writing. adjust you're processes assess the prices, efficiently We more optimize you make help risks that more help the and We associated can to efficiently. with products faster. you predict your more We capabilities those cloud effectively customers effectively delivered efficiently into insurance all about can -- much changes Guidewire claims the of what cloud conversation buy story. and the our part that they is through are these more excited that buying all more legitimately are And and when and much, outcomes releases

is that received. been a well So it's the for the this taking a and product sure, we're very market way shift company to in very,

feel big from like was just talking Connections. is we are cloud how of takeaways. hold. these take -- that I are today one of takeaways in actually about our reality honestly, And really updates and to really -- starting And just the processes going the these fluid customers Somewhat starting key update kick just -- our for we're the this to was getting were started,

So the I appreciate question.

of sales I us story. in to the think absolutely part probably And things of one the momentum business. it's that's continue helping drive improve and the

Dylan Becker

what Jeff, lot sustainability. maybe puts the here and versus on maybe nature, reallocation if the That's and more should was XX perspective. called margin of days anything? we guess, outperformance I the ago, a we met variable know of great. over, healthy in out through kind about how and us of here on even some maybe kind A think some some Maybe when the but think relative I sustainability basis you seasonality, operating momentum any to a of there, onetime help of of quarterly from switching takes side. outperformance

Kyle Peterson

it's No, good Yes. a question.

me very It benefit in obviously be are bit bit saw XX%. expecting there. onetime surprise. in margins at little with We QX. a thrilled And a I did revenue. the We there we elements wasn't some higher was from by to caught

in billed arrears. was revenue that tied that to usage was of platform Some

that think So margins. revenue through of about kind the in that that flowed recognized catch-up QX was as to

But of we infrastructure than we've gives made we platform kind delivering targets. in half higher march longer-term really expecting about it the from ton the strong we're general, and those think a little progress Additionally, QX credits have start confidence a did bit in our in year. efficiency of back towards of we to of we're how us the that the as in provider

and it the was of that healthy just progress. of factor But catch-up a potentially the when of So recur may the couch you effect. some in bit was revenue factor end you in X a credits that there not around line to percentage some onetime little really of would throughout I general, the in points top X% around that year.

Operator

of question the next Kevin Sachs. Goldman with from comes Our Kumar . line

Kevin Kumar

the guess I'll start deals. I with cloud

the I I particularly deals And year. it's seasonally a think in pretty typically think maybe quarter, last impressive, slow. given X that compares X slow to seasonally

thinking seeing maybe the a . out Mike, stronger gate? how are perhaps versus that curious, today appetite modernization activity So you to year cloud are And about carrier attribute you would we're maybe what key that drivers deal for the of ago? the

Mike Rosenbaum

sort stability say X future, I to in operating the these pull confident just people would conditions I confidence the talked more it. our deliver That's feeling trigger customer drive enabling sort question. down these for pave them decisions the direction, they so on building the of success, for But growing is sort part projects. make how through for in want just of the to follow probably things. for is the our bigger and about confidence -- the to projects in it the insurance One, capability we've the of of of see of Thanks think speak, them how road, the companies future. steadily the and other to base conservative see years about part to live

improve come the to products and stories the business that are migrations feel customer new we're seeing them achieved propensity into year. we've that platform. the factored for either that helped the the of and really are customer next the the the that, confident over these see And X comfortable put the fiscal I it's hard deals I pipeline and all or and that work think QX. -- of outlook And and to in impacts We stories positive helping momentum to think rest about quarters net energy starting the us just platform the and with the into the also we've

those for it's up a I in positive adding year very So start all things, the result think, to us. to

Kevin Kumar

Mike, analytics? portfolio I out guess fairly of And called a And Guidewire great. then, That's you robust analytics applications. now is

So there of And how do curious applications maybe room traction? kind you . about rates? most is strategy the seeing forward? the of to Where improve attach going add-on are kind think which overall

Mike Rosenbaum

which at lot mentioned there's excited We not we think much insurance property maybe to measuring deal of the about. the revolution vastly approaches people that associated a think specific be risk local, taking if I'm the coming, our properties analytics. we taking the address, industry that we're Hub, and too by exaggerating that location-by-location We with talked that more much in did approach. much address yes, a by is that We Hazard So improved approach the way Connections about most more that Conference. with can a really even

traction with to excitement that Hub our the where our industry, is and And customer have adoption about there's broad Predict in and lines our change driving opportunity multiple business, the will for is We driving there's of Hazard in lot industry. that product. maybe throughout to of it also applicability a more base, drive an think attach mechanism product but different of for us

in have at the the outcomes points workflow steps systems, most where it that business. people have, with companies of predict getting working you and front core insurance great take risk to -- business they hard in like in on on struggle the the learning think They're and sort the I severity of of analytics, the the predict business users really and projects things to actually and impact action into and call predict running. core workflows, struggle try Where and is They claims it. next an it and up deploying actually this. the predictive machine system into teams can processes people

possible done and us really And these all making data it work that's effectively is insurance deploy this inside Predict for have efficiently to companies. fast and engineers that the and scientists where actually shines, have

selling we and alongside more InsuranceSuite And attached think predictive forward, so be with just positioning InsuranceNow and applications models applications these and this Predict. is more deploying where more one will of areas going there joint analytics the that

it. of we that excited are you about gives hopefully, So a sense how

Operator

from comes with of question RBC. line the Rishi Jaluria next Our

Rishi Jaluria

expect GA product, the conference us Jetro. in partners a business, coming talked of customers starting can And a ecosystem. this from did what us Maybe Nice especially connections, at of this conference month, but feedback partners to the you and see help of continued more was I've talk maybe to helped out out with about competitively, got around also since Maybe build at now to right? mistaken, really connections. live. follow-up. at There beginning and excitement stronger I'm if come that been with the customers maybe it of the announces going how And out not early lot momentum his talking the should we kind a you robust a to and we

Mike Rosenbaum

question. extremely great Yes, Okay. Feedback was positive.

take to that on enabling hours. top things really the risky, of lot I the an that for application of a exposed XX mechanisms this was deliver but of we able turn be as way people the did thought sort and applications. digital business Jutro one digitally the we was in game collection One it a changer about us It's worked of in of deploying fun terms And a to think into something was bit platform. also to primary a insurance project of little of on requirements

is from and it positive. about excited incredibly very, are the customers feedback far so also We very

somewhat. And so it's

putting the feedback have but on to been the it releases and applications customers use our working who the it and the early the us of past their and those call connections, also build couple who into seeing deploy applications this, public access it's domains. customers from hands looking at with demos over It's with are we it, really what

these way. ultimately, provide We change deployed, teams, way create we more things experiences also convenient whole a much, it's agent-facing but to to friendly. these making a the And going or development IT responsible and in process out the enabling insurance significant it's more consume, applications the the and And maintained. it's efficient, easier making -- developed, traditionally that consumer-facing faster for the to boost more about teams, are real business think teams these a and to rolling consumer just in who them ultimately much are

customers very you feedback very and that happy connections. it customers showed initial positive the we very, So from to noticed of and that

Rishi Jaluria

right. you're you about grow in Really prepared talk that how little maybe about your a helpful. the continuing cloud bit Wonderful. All certified Can you talked And you partners remarks, for to then migration. you might be and generative number one, accelerate do tying able services, of all number of AI that to, some continue and number partners of the that into this, to right? offer you'll can maybe two, that

But to pace what being extent can AI and generative AI the partners utilize, the those time migrations or of even whether that? actually up certified it's maybe speed to to accelerate for

Mike Rosenbaum

so ecosystem a right? been our most thing, certified changing one, to consultants more very cloud each important that That or Well, working We've ensure Because yes, Guidewire approach we're it's quickly lease. the on in innovation has the the pace of hard was great very, increased. are question. number from

the a is and the over on deployed a optimizing one. latest that on-prem very we in the approach that live recognize cloud to Guidewire to current that . Number That's do selling the number project there's knows it release. that you of And on sort state of do that's the skill knows to set themselves greatest and we implementation. assessing should implementation a or X everybody moving particular the so ensure a implementation, it's latest that how important based and way

we behind you that -- about -- projects just whole learned certifications. effectively things now also ecosystem. help the we've XXX But that that's So obviously, more into bunch there's cloud broader need effort you can be a certified. what's create so that that understand, And to migration that those need to of you disseminate to

partners horsepower about to program, we're of consultants of in to do demand think to lot additional we're honestly, capacity very is the training a approach expertise. we'll open the more And to our to we're I recruiting demand, Guidewire and because projects, Certainly, that be the these more sorts that able create. there opinion, creating add looking and for

able be consultants projects. more think one and recruit and certification to really constantly very for So if a going is to trying our want projects more to the next probably the experts be that of the they ensure approach on to we're billable they're going this open, -- of best I is things sort consultant learn can that find they're to to decade.

over Guidewire asset is expertise to an years. incredible to the for next want see demand to if they're and for I consultants sure make scale a they mean incredible XX that going have that

one. So that's number

you It's Now about certainly asked if that think, a you one. tools. we're I developer is improving these generative looking is carefully interesting can AI, towards the question productivity see very something with very like at path

upside to we at. try there's going path that who try test something It's definitely also it sort a definitely there. of of place increasing. towards migration assess velocity number Can see in looking And to projects we're and a that and partners validate have There's work to this it's to and accelerate.

to a acceleration potential. little put to sort on and probably I a too bit us of for call a early think number that it's

something -- not times, That implementation also we're but at has lot a brought hope of looking and of But and functionality also up been it's partners let's say. have at looking is lot platform. number for, at around -- something we're just not just how a definitely it's migrations, the and of looking are on of concept

there. that So potential definitely is

Operator

Our comes next Davidson. Peter question with the from line of Heckmann D.A.

Peter Heckmann

classic XX so? over it some And migrated recent how but clients timetable last Remind or does months about platform. me, believe I spoke imply the left, X are -- X Investor Day there that thinking migrating have the a were remaining X? on bit that X the about You the you on with little progress made you on those

Mike Rosenbaum

we executing internal digital to our and We're from processes with and they're somewhat classic lines in a These in those with business or moving new are had that often lot landscape like IT their as implementations. or project product ambitions other for and and have of those the active things building approach and over part planning have out of for their success overall do couple to Thanks conversations GWCP optimizing one priorities complicated Yes, a projects portfolio other Yes. each question. business customers customers. approach. of our

them. something And in so that with we're shift is working closely factoring

to even that and But And that in the X with these or so isn't approach have maybe X and going X. and my something is year, this right planning out expectation we're with comfortable now might all dialogue stretch we're the customers it taking. that's that we be transitioned pretty

a that doing to of also Guidewire optimize on work implementations them continue approach Cloud. classic to lot the the to We're support

that much So the factors as years investor about maybe comfortable well. make did always an as goes feel I ago, into We're we as perspective, it that. it did feel that it good working overall at from approach. to X.X But really this it's I think really something about picture Guidewire sure don't

Jeffrey Cooper

Yes. if thing. I impact that X think year look on ago ago, was Pete, The the like the to years drag or say a I overall a same was back ago. Day over X little Classic to going year customers you the I is had a Analyst margin Analyst mean, significant. quite the Days

the our and over overall our and the a pie. efficiency as group in improved that's going classic smaller smaller piece grown As migrated we've of of just those as business, overall to be managing GWCP customers, a we've we've to

But So it's on. the we'll forward. be margins working hard still to something less material going we're

Peter Heckmann

quarter I'm quarter license type in high this Well, relatively good then teens little I second solid bit bit guidance in correctly, be terms interpreting but to and and And of this just the down should with term hear. more Good. looking another kind want just in a make a to -- that's of looks that little growth lighter it subscription like then services. at sure it a at

and should half? And start so be the again that the in of this growth then we we on where see decline side, to type quarter last year-over-year see services the back

Jeffrey Cooper

Yes.

a in remarks, margin as So to through more prepared partners, revenue the noted revenue much services from we've lower-margin that's pushing top business we line, that side, of impacting profile. move a on the our work is higher bringing quality stream in but higher more been doing and away lot and subcontracted a

overall with to for playing also to uncommon not holidays, is than and be that respect it's a the So QX little slower is so QX QX bit out. services.

we and to growth do and cost vis-a-vis half in and the that that nice the at a half, revenue we margin. a our the a so are of can half in the fair back have have first in capacity have basis then And year do amount the we back of expecting year way structured of work

we're So business. about happens. that's bounces Term services of the activity know, the renewal you the license, kind how of side as thinking around with it when

of our of onetime we year. revenue general, that impacted is But subscription target to is start in from then did QX a like us. only perspective, consistent would seasonally little have pretty of march how call terms which in more call out that that the is I be overall I we the the some rate for year thing QX. higher, feel targets what And so side, about impact annual QX our subscription the always QX towards good for this will we bit sequential the from In to a very on term QX. license and would And did longer-term growth

Operator

of Our next Matt VanVliet with line the BTG. question from comes

Matthew VanVliet

back analytics in there? features. you're how contract carrot And advanced GWCP start ARR to and additive to wanted that think about at or some other a a of . products Hub those commentary more of go-forward being to customers those to cloud circle on look should all and some move value really of to I basis, to customers made versus and of get sort we adding on I unlock much guess around in for the of the of we in the as you some being more Hazard using specific the general being on a those

Mike Rosenbaum

good independent, developed carrots a and want this would I'm the I I but to linked don't incremental it of insurance our the and company. them is be source core of into creates -- and value to cloud value it's core primarily, to and support these or Yes, -- support more that ARR say adoption. the more of cloud my comfortable use predict an can with say, We question. and we Hub direct certainly But the that cloud proposition sales as services expectation enough then products can drive Hazard expectation a sales of have that analytics suite proposition for incremental. built the

business an overall But certainly and time. to the link to sometimes, the linked both over at sell linked said, of them same to, but work is like hard our accelerates the that, analytics be and incremental ambition create can company. They we I them time, is absolutely growth

Matthew VanVliet

to some then partners Very cloud, is this the great switch make And prevalent maybe the helpful. breaking a to more of trained? ready think Okay. to are Japanese of and the and being see of carrier moving you full the international that more clients embracing the really deployment. dam full GWCP sort of as Do

a decision. this to still U.S. not country this each a, needs seen own their bit of make in we've carrier like bigger from to group is country here wave the Or little There's necessarily

Mike Rosenbaum

think a the one, and certainly don't our is It all like of helpful. implementation. do works and the model. particular ever we we're It's it. system sure exercise Japanese I positive is dam customer successfully. to the incredibly ready us I see helpful. don't or to us had suite certainly really anything a things like know go the live It helps that. it call to can breaking It's another cloud, if And we'll an that sort make It the is validate signal. need full second Yes. We to this metaphor helps this go

we're that don't -- plan I across That countries And some and and approach modeling a wouldn't builds of very flood. in, quarter-over-quarter. and so going future a But to kind propensity steady don't expectation. certainly imagine all have the to very, It's it's operate all to vision approach sort just business helps. of our It's that model, just played we That's each helpful. trust and have of us country really, we to trust increased the out it's I take. be more also over improvement, the country the financial like going

you what those kind factor priorities, factors I are their of things factor are their what those this the relates for what of large it objectives, is is in there And which way a think timing just overriding what them. said, a those of big and -- to deals are have into their timelines,

the all. on it internationally success, years, certainly to the certainly this points past don't I progress all couple eventual over helpful but made coming of we've see the So at at once is

Operator

question next Stifel. Lane comes Parker line with from Our of the

Unknown Analyst

Matthew is on This Kicker Parker. for

you're those beginning your release your in and cloud in have How a at now non implementations cloud you So compare cloud and the your this effectiveness to push? time strong of amount go-Lives. compared would of speed

Mike Rosenbaum

know, and shouldn't great got we just day. mean, it's than started. takes I but successfully we question. we We it, so it much more I to admit these a That's were around when but we are more a night now first don't got Yes. those deals done, job confident what run first magnitude did when first orders we and live, measure, into many want a cloud it put to confident. cloud those I got of customers good but I many,

documenting it occur our partners we and these from to our done circumstances go the gotches proud Just more we're up of projects effectively of all that that have and programs the held each more ensure one in into it don't effectively work and enable of than each in sort world-class more that one organization having assessing that projects, arise experienced other that prepared incredibly sure of what with operational that of teams these done again and we're live processes to terms making cycle. understanding really built learned different can a these having and better building super

also, same the it's planning way, updates, That not and testing subsequent go-live, that. also but the it's So update thinking the customers just that and for for to initial are the making right? and sure concept that applies that about by

we past now. around that topic. years this progress incredible things operate can So how the have those few much more smoothly just It's made over

done. think way, the I by we're And don't

I at think X. we're

improvement were things are we'll with out established run really, many be a so Guidewire new have to around in come we alphabet, a better. marketing really be going XX, much doing to approach. even function we projects, to these even And And get and initially. job are letters when of and to But there more up are we than the smoothly. eventually better going how have inside we're going These

for -- and effectively is experience shared that momentum that helps the experience customers. business. the us us positive in and the does sell And progress more confident and in is feel help

we proud far. the the appreciate learn we makes made a Unfortunately, progress -- got when but were of me very first that had started, So lot that to question. admit very, we've so

Unknown Analyst

detail million of went there? move? remarks, the made prepared $X.X quarter. mentioned that at Yes. the the Awesome. That's did changes some into you services around earlier was end that great to Could your you you in that reorg you more what second hear. a provide And And then . thought

Jeffrey Cooper

around just really rightsizing. doing was It some

seen scalability that partners we We That outcome have us. or, we a and as large seen the burden. take on of great as that very our of is overall front for have more opportunity this in improves more our us address

action, it into but the kind does of play margins was in QX. relatively And a so services small

call would So all we out that's out that that I call But for wanted to you. number on topic. particular

Operator

Wong next Our Ken Company. Oppenheimer from the with of & question line comes

Hoi-Fung Wong

analytics cloud interest? kind in any might to have for spark allowing demand I pull-through your How modeling, the upbeat of And for forward-looking might commentary. to think, analytics? wanted specifically reform California, I this Mike, circle back risk data

Mike Rosenbaum

Yes. Great many changes a us excited question. out. that state California, the about There's lot to of the feel obviously turbulence having work the of industry I'm insurance pointed here. and glad We're lot live the which you is in in make. California working employees personally market of that a of the Guidewire of with

do very advantage role -- industry and real and see we approach, mitigate very to also one, that to positive associated and Hazard for homeowners risk. companies the solutions, play profile the expect specifically and insurance we number So of can a taking these properties very these update a things also positive these it understanding, as that changes but the with businesses better can locations, Hub positive that just with risk and and

a more think of efficient comes We and to effective it equation part that's when the insurance all market. operating

pricing risk risk really and in And and to overall more so measuring some the improve carriers more and take California Hazard we think and making approach the Hub operating but effectively. can that the also general, that property changes, industry is significantly analytics

of number Guidewire also partners plug directly We can that on risk our just to and Hub, about also of are extends driving selection, analytics products into that role going not I'd to management, they managing this super facilitate a disasters, platform sort that modern risk be approach say our and playing in expect more intent, we're occur, excited easily effectively. there's new a that but this partners deployed our if Hazard

the all here and change, excited industry, we me, makes haven't California, in or it's has very of experienced applying work of people of you to talk exciting, very, of be it the innovation the not to changes live provider real knows in of, and sort in California. there's any us California do experienced this who to for part because we're insurtech with if because the change risks who that risk profile of the either It's because that weather somebody the their a a associated insurance kind

personal it of or hope exciting. kind it So makes cloud, that and all so. sell it Whether makes certainly pretty us for I helps us not

I overall, like use. word agility is to the think I

changes, world than is update those be faster manage more effectively, you operate more more where you your more your around pace company the update risk changing the can a agility your and manage going the more which you're operations able I have, think effectively, that insurance if you're effectively. to in company risk to

delivers by Cloud operate And Guidewire industry it more applications the and enables efficiently. agility provided modern and InsuranceNow, InsuranceSuite solutions that so and to

So to we're forward that industry. just change honestly, on more better, very efficient helping a look -- and drive, positive seeing

. helps. hopefully anyway, So that that

Hoi-Fung Wong

update but any quick Yes. a if QX? see ramp many details wondering look just not of sure then just like for terms all of thoughtful the in might And Very from kind changes, we helpful. Jeff. there's And if deal too what you, I'm quarter-to-quarter, appreciate dynamics in there. I the one

Peter Heckmann

consistent if bookings bit it is QX QX, at have portfolio rest No year a a just of was look it very yes. than to the of lot the compared you last and -- a and kind QX smaller renewal change. little of a true-up as overall a it's major the profile. ramp with tends the activity of to generally because Yes, shallower more But year.

as no assumptions change go, . steady at point. of ramp kind So this to we

Operator

Our of question Turrin with line Wells comes next Michael Fargo. the from

David Unger

I'm This Michael is going from David. tonight. Turrin

So said. that Ken's similar just to question

positioning bunch a your booking head year, we've the has mentioned up competitive bids the especially that close within environment rates. last you of So -- you high improved and been have

this all So into you as dynamics sign translates deal I'm how deals? wondering new cloud

Mike Rosenbaum

interesting Yes, question.

long So over first in sales pilots these these we work involved a lightly, cloud significant pretty months big we're phases, taken cycles, of all, very involved, deals, they're particular understand even to you involved got on with and very for -- these often for many very many, often decisions proof-of-concept very them sometimes not of deal. are year a

detail this transition and through this stable. the Analyst rates find through you'll years XXX, remained at close should prepared and some get to the I'd say, we very We over never past Maybe the and rates, the Day the I'm of cloud in pleased especially that say until couple we say that. win competitive it pleased, went provided I right? I maybe rates around we Close shouldn't have slides talk around track

like that these total continue addressable we to I few is out market. over competitive competitively. it's quarters simply a But It's the of about we steady it call have market. bit and our remained transition confident more feel an our competitive deals position -- past throughout a The more to expansion almost consider reason just and almost the

to terms to projections going a modernized And that projections, of our for modernizes XX to Guidewire, for think for to system make a maybe as to to and a and and looking in to of system able row a that bookings something in shift address the just to market. from support of grabs that where up ability now not our a X, expect favor positive decision and us trend modernized we We being see deals customers points we these sort just or we very quarters it's a of that growth years, a overall and multiple that see sort back in come few market coming back once see these carrier system. insurance

Jeffrey Cooper

of The with would company I overall like stock, more The just the the add the the stock value an associated price. Yes. risk right? thing on has impact only is that

the these making us the that a where to negotiate have, and price the more we these more to points we is are time that business proof path to we and the think as derisk points are the can So about as deals, case cloud case they go that now going we building reasonable. insurer today to from the our helps

preferential some part firmer think along. going they the that because of And be taking about how the is of on risk. are early bigger engagements, is were we adopters firmer as to early, It clear about pricing and a strategy all discounting. This got future think we we

So to that. I see negotiated. still These starting think deals we're are heavily

want said, it lose Mike feel you of you As XX, to one, years. lose never these goes you one like because when away for XX

make So But we we expectation sure as fight positioned on tooth that it we're do and can better and nail discounting look to win. we is our that well ahead.

David Unger

a really more here. little And I detail, all that appreciate higher guys. level

convert think to commitment industry's the a know as software and to year, appetite forward our the I way spend budget next early, about to commitment versus into we trends insurance year the cloud. there but So look to prior is their it's

Mike Rosenbaum

that the shocks that past terms all increases a great the has system. have the we've to inflation, in by think they the and getting approved few talked flows terms weather-related and how cycle loss about that of I follow of And question. and Yes, regulators with over risk in industry through the rate quarters dealt it's

inflation of get So through a stable we as have we cycle hopefully, that, a and environment.

or in . environment, making control, project modernization. We stable Those of them type of are to get that creating decision terms on things to rate comfortable stable core our hopefully, feel work a weather-related interest big favor have system the obviously. climate-related, harder risk to enables we knock environment, that's wood stability a around

in these our for certainly, us. bookings and be greenlighted, continues, which will So results is it that watch stability the propensity events improving. closely, increase for that very And help it to we deals hopefully, and

Operator

of comes Citi. the Our Radke next question Tyler from with line

Tyler Radke

earnings guidance, the this covered a there second calls a from you couple new at ARR half popping at of play. was change improve expected this QX, earlier, the I net And of any to end of by look on a in QX. to Jeff, was half. are more? the I layer tonight. is that kind ramp perspective that little I look million in first here you're we And it I around think, timing -- apologies the hoping a help obviously, modeling. came But down And ramp But the there's is just that's if can contracts at consensus looks beat overall, in and bit understand high it $X below if ago, a versus the you in, where if like year factors know in just expecting was the year? bit in us But

Jeffrey Cooper

you lot more a visibility than have is when outlook went our with model ramps year. into variable Our how the as in a expectation terms we QX very consistent hit, We obviously and all we quarter-by-quarter. has big into that the out of

of got good think We're on with kind very an pleased So cadence. QX a us annual We about our it. business start. always off to

small falling good to very a to and the the attrition start. off we them kind profile the ramps to expected we're think very, business is QX way fall of we fall. The way are I very consistent. following in the still is it expected

all your there's but it consistent but We year. guess you about internal started very that understand So have really your thought on make estimates, we as our change no expectations. we best to to quarterly with how the

Tyler Radke

And you the talked And if you deals Was stuff better number there Mike, just the pulling was you quarter helpful. than then you given composition about just about closed the factors and on talk there great. any in they, timing deals could additional how your of the of That's be of there expected. side those the business? kind things, would of just the smaller terms of in Any seasonality color size in. of

Joseph Vruwink

just continued from a especially business. you No, anything by pulling anything. QX. deals in about strong out or wasn't It's with up Typically, end a positive strong And momentum coming deals in QX. QX said, of pulling I like the special there in

with we of And so a up explanation QX we sort very solid then but an QX, a use strong for followed that light QX.

very, -- to think see. which about that, great X was in momentum We see. I migrations, speaks volumes that was it I count that very we And Deal also the have happy was business. to had

long is So for or to we migrations. us the it's it's not deal I term this Japan a a we was in you very, deal all potential phenomenal. about in close. spread. excited good all not the have when just net It's internationally and phenomenal like the that said, milestone and see see especially It's very think new Japan, And I that

that we we they the and a years deal getting strategy Japan line like said, lot of And the understand a the story for across like sure building QX in confidence in making and was like building work relationships in great. and

it. into anything read wouldn't I special So

And size, In to terms year. like of pretty I it really start to we kind strong be. normal, the expect deal said, where of

Jeffrey Cooper

a the as is, to modeled activity had The went only I'd QX lower obviously thing Yes. we bookings into quarter. I add little look, in bit

of the that was strength reflection So and -- a QX. just of of some

we good modeled. we cadence, on we in a see were higher what of pleased at I activity wouldn't off was But pull little say any look was It's sort -- unnatural So it annual was the just a got start. we'd to this there in. an and bit than QX. to not, It

Operator

Bank the comes Mike of America. from with of question next Our Funk line

Unknown Analyst

This is for on Matt Funk. Mike

relative prior moving mentioned any especially you . pipeline Can on through remarks. are incremental deals rates Qs high close to how stages prepared different the provide color in You the of

Mike Rosenbaum

And that like I relative through. and average. close, don't we've I an moving we acceleration push to the sort these to seen will But wouldn't if guess Yes. the then long about I'm -- for an in of wouldn't guess, just have evaluation you that's expectations them them see an think we I I I acceleration we how say just that trying have say push. things sometimes see more I we deals have the gain take already and the gain evaluation market to feel deployed of guess on live as in we who We being deal the -- the just in service, ability validate changed. customers success. references process our confidence gone and solution outcome deliver as of gains confidence the as and the that. and And the outcome comfortable positive about as the other see

deal more actually And is in favor. to so as cycle acceleration the close and be in decided a confidence wouldn't it it's as as just just much describe it I our

Operator

question JMP with of Our from next comes the line Aaron Kimpton Securities.

Aaron Kimson

partnership Analyst partnerships on comment a Swiss and Connections, Re early your announced more there You about going little the with a Can at you Day. with appetite talked bit forward? for potential it reinsurers progress

Mike Rosenbaum

reinsurance relationship a partners that a sort There's activation utilize things can see they're customers, in which assessing can And for say of talk about them they and the effectively and with that to in these is better we and what was guess be more facilitate back entities start with risk, while between talking about I for deeper or think that companies like data would be I if This relationship. significant we Obviously, have facilitator model role the that with event Guidewire momentum providing that able precipitated and reinsurance exciting insurance with that sharing of -- insurance can to companies efficient. together. entities. us in understanding a models relationship. connections that We analytics like been To manage the sort a relationship It along is a and very such There's much Swiss goes decisions. amount the like orchestrating extent customers cloud do might the what exciting the operationally guess would of that the Yes. it's to making opportunity this their more companies works forth Re. can and play of make have insurance the about publicly. I to lot say do insurance the that our to it managing a more for are interesting and talk I'd our I far potential risk that it developed Guidewire terms facilitates between and to of a creates announce

lot service management, I industry excitement big, centralized new a model cloud They're partners for role down with value reinsurance that big the the can entire expectations about and a benefit. a that's of chain. have that up think in aligned is overall the And their play a seeing this what supporting we're really of different sort risk

the up. I opportunity in a go. to to Swiss about that appreciate with So work work this them with mean got you talk this and more might excited we've I incredibly Great. to about do have working And Re. We're excited we're bringing lot be where public.

Operator

reached I'll remarks. call the And back of CEO, the closing end over for we to have Mike now session. turn Rosenbaum question-and-answer the

Mike Rosenbaum

thanks, partner and pleased say the I incredibly participating program the how about the business. in we call. great customers just momentum feel the with wanted We're with start overall and to year, for to things in with and platform the on everybody, are progressing

the up we end forward you next the don't, And throughout the if everybody at look catching we see quarter. guess, of we'll I quarter. to with So

much. So very . thanks

Operator

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

Guidewire Software (GWRE) 7 Dec 232024 Q1 Earnings call transcript