GWRE - Earnings call transcript Q4 2024 | Guidewire Software, Inc.

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Operator

Greetings, and welcome to the Guidewire Fourth Quarter and Full Year Fiscal 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to turn the call over to Alex Hughes, Vice President of Investor Relations. Thank you, Alex.

You may begin.

Alex Hughes

Paul. Thanks, Vice Relations. Hughes, of President Alex Investor I'm us And Officer; and Jeff today activity. is has John of year-end Chief Executive Mike Rosenbaum, joined who Cooper, Officer, President Chief with provide adoption and a recap me Mullen, Revenue to Chief Financial Officer;

section release related of disclosure complete Relations Form conclusion recorded, call the to SEC, both press X-K are Today's results as available well Investor found in the can of will furnished our A today be as which is on a our call. and the our be of website. issued of in our the following available being replay

on our risks, on any and business, customer of subject demand, products, assumptions financial upon call this business local, ones forward-looking operations, and results These statements be the of made impact not our plan targets, are as regarding and our based current business date. other outlook future matters. relied on representing and of geopolitical views uncertainties and strategy, and events our to cloud should management's as Statements to our national subsequent our expectations deals, among include relating associate are today as momentum

uncertainties and those may such to and from filed in that and release on be on file filed on with assumptions most recent press and report annual Form prior our XX-K statements. forthcoming factors SEC risks, quarterly for actual Form differ XX-Q to including forth refer SEC and results documents we reports risk the the Please with cause set materially to our and our information

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

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

Mike Rosenbaum

afternoon, results, and the Guidewire Good today. partners. Alex. quarter thrilled an you, to for to of our off and joining and incredible for capping customers I'm was thanks, Thank fourth everyone, opportunity what stellar community have report year

This for like validation results hard everyone fiscal clear Guidewire of and at the work to X quarter me, quarter here the feel a and in our the year contributed marked has cloud transformation. years determination and

to with have We applications, customers. success and consistent from existing a maturity of are continue demand drive and to demands. and The industry reliability referenceability program program our platform seeing we and now record of our of continues grow, outcomes, insurance customer sales Platform new continues established drive that track demand and the cloud the to cloud reputation and customers adoption success P&C new choosing the Cloud Guidewire customer and associated ultimately,

sign ARR the ramped as go and with we our XX adoption. detail ramped larger into value. for quarter, Mullen, in more on to XX growth. deals We The established and reflected the President, in John deals was is market year, momentum more cloud we've fully fully ramped year. strong will continue the cloud significant closed fully accelerated up ARR ARR XX% while on ARR clearly to XX%

fiscal $X the this our of quarter year. But is global this the well metrics our organization. every results strength I'll ARR just that combined billion single position target efforts say result across and of member a achieve to us The of these year this

our we gross also targets objective long-term XX platform. our to margins demonstrating model cloud in adoption, the is achieve greater seeing confident As Platform continue increasing XX% feel for efficiency Guidewire to with subscription our scale to and leverage drive we the support points we as margin scale Cloud and are very over continue year. greater cloud to We in

million generating flow and efficiency, We company nearly $XXX of operational $XXX overall nearly non-GAAP profit better operating also continually and cash discipline driving of are million. operating

expect model clearly outcomes here. Software-as-a-Service have demonstrate also power the GAAP created profitable of business to the These We we XXXX, fiscal in be

forward, are Looking to we with year excited enter fiscal momentum. the new

conversations number in see their around success of ourselves transitions cloud need stories, We continue they greater of and record agility realize on and to that in Customers we alternatives. referenceable are core modernizations. based track acceleration the operations from our distancing

success. is a X,XXX hold As by will customer Nashville latest healthy community. the showcase result, will our to us is Connection, November, examples and continues Annual in the into This handling of members valuable attended [ Guidewire In we to opportunity Customer give platform our to at back in another pipeline broader of very build be going Conference innovation year. ] which the our

X This achievement. saying last goes by the remarkable like year seems years, in it a past means sometimes that this

We a and market vertical leader. replatformed in to it surprising. become was This a a defining to many software have taken leader vertical software spoken people success achievement and I on-premise our somewhat service have as [indiscernible].

We now, logical execution, ensuring every a straightforward that me. decision. back nothing to customer on while looking required focus single all chose made who us sense and trust looks their pretty the doubted miraculous it to But made that all plan never

and never will perfect, programs be not but the will in continue they run our we customers on our platform. are to We prioritize

we decisions us. day the customers our technical our every earn optimize to continue trust strive long to and for will will the in place We term,

very future with position now unique and customers industry right serve. our the a are of well in shape We help we to aligned the

fashion we past in confident over few for execute and hit We objectives years, continue have the to I'm demonstrated set continue the to forward-looking we will we the ourselves.

Platform. and provide on the detail over it Cloud Guidewire With discuss around industry adoption more in perspective success that, year-end customer a I'll on to insurance the and hand John to

John Mullen

at Good Thanks, a successful Guidewire. been It's afternoon, everyone. very year Mike.

the world resilient. increased inflation, evolution of to and pleasure the precision with of and the businesses. they and both navigate to year, have and is in We risk continue expectation that consumers base serving of the evolve the both Casualty of the saw which we insurance Property convergence customer pressures critical This with agility respond and and

P&C help the the confident We with drive cloud very XX relationship pace optimistic XX closed with total remain InsuranceSuite for the InsuranceSuite bringing we QX, did cloud deals deals in cloud change the of and and we our market we XX. for deals Reflecting in on industry. can our year, that the regarding for the of durability year

We also closed are a in across of What quarter. delivering that balance is a healthy the we seeing X InsuranceNow the business. deals effect the positive portfolio is approach

to drive plans deal and We've line accountabilities in types. region, the across country been business and hard all working specific carriers of and markets, specific with

customers looking in to A rates insurers modernize regional broad and core X added to QX net of core personal a systems. in standardize their win We full new continued to carrier on our system our super elected facilitate products order ambitions. modern saw and lines and their data selection suite strong with growth adopt

claims a excess operational consolidate ClaimCenter selected and multiple systems leader in Argonaut surplus efficiency. to and Services, Managed improve

record success Our commented for their customer track and in the key factors decision.

claims. personal their auto Pearl a the single-state commercial leverage U.S. Platform Holdings, carrier suite and to the in Mutual, modernize of core lines And full digital selected to selected in nonstandard InsuranceNow a Northeast Miami, on MGA Florida, the capabilities. headquartered finally, the Preferred an and Cloud emphasis and with Predict its Guidewire

on-prem. our new included migration InsuranceSuite a It size strong the these a of carrier and of wins was for we are meaningful expansions work and addressing cloud highlight activity execute to the also exemplify a total migrations. beyond InsuranceSuite Five range because they quarter compete net of of complexity. cloud migrations I with ability broad across scope X very

was themes in the the Cloud, our which One of our XX% commitments quarter bigger willingness of customers' to key ARR fully ramped a make driver on growth. Guidewire was

Notable evolved broader outcomes. that in the initiated product as a discussion quarter were and full-suite deals into single

of significantly power and for X our suite data full scalability, insurers example, Guidewire cost commercial expanded Tier resonating policy, total the ownership Platform The across of and relationships claims. and the in and market. a billing platform adoption of is For of unity Cloud referenceability

and healthy saw activity in Asia year. for We the Pac EMEA sales both

really North in in strength Our QX. delivered America

X X coming and deals, deals QX fairly from deals global at X. X remainder with the Tiers Tier, Looking balanced X X and by Tier Tier was

ecosystem. to our Turning

We quarter, X,XXX. in with The today. to are the professionals XX% professionals our commitment SI cloud uptake certified increased ski now partner now Similarly, model. has on partners. community affirms of seeing release shared community from solution us continued pace XX the fourth training of continues firms over technology partner XX,XXX with And year-over-year Guidewire to There number are our these this over Marketplace momentum. the XXX the from SIs working expand. to

Finally, initial achieved We results platform QX. quarter. on go-lives strong programs the on in Guidewire we cloud saw Cloud customer in X

inside have platform the throughout the to are of organization of speaks seeing, team margins QX our expected, in efficiency and been work to increases predictability has services working while customer step The updates We in revenue the achieved hard higher-than-expected number we as year, which positive to improve environment. was more The growing a significant forward. cloud the gross do, quarter. the and

well fiscal customer in year in in In collaboration drive community. this with demonstrated continue fiscal objective confident year execution, organization to year our our ahead our strong services have for 'XX in build partners, to predictability to Successful we is our to together outcomes ability our primary momentum. face SI summary, worked last and look and 'XX

Jeff. hand With that, over to I'll

Jeffrey Cooper

and of currency highlight flow cash the fully financial from margin. XX% XX% combination ARR The John. Thanks, was of ramped growth quarter the incredible constant operations

durable to the deliver value to we is testament deliver that growth to industry. ability Our profitable a the

the up of let ahead that, on ended Fourth details. $XXX at year-over-year With expectations. XX% me jump currency quarter ARR a constant basis, our million, into

resulting reminder, rates, and constant a As ARR in million, then measure this impacted $X FX update making a negative basis for ARR by we the update of throughout ARR ARR on year million. currency $XXX year-end

which a price defined our constant entire XX% grew a the the fully that hard work executing Fully of on in we outlined and basis. market winning is is customer result tremendous currency well lot organization. ramped year-over-year a in as ramped are the across reflects annual contracts ARR, This

move strength all the be performance year-over-year. and grew on of of revenue. subscription Total which million, of $XXX expectations XX% ahead million, stronger and our comprised contracted year visible $XXX XX% includes was our of XX% continues ARR due customers year-over-year all across cloud File to to was the cloud up products for revenue, ARR. cloud, components which for have Total total that ARR, for revenue to to

It's to just XX% our the of of year-over-year, revenue XX% to during thought but continue on-premise start decline customers our true-ups cloud. migrate FY this benefited decline we the At the that 'XX, stronger-than-expected closer support as would we line, Subscription -- exciting of year-over-year. revenue year. revenue. to we our year-over-year XX% million, up million, this License $XXX progression from was X% and subscription $XXX which was total year finished down to see the under at revenue

Services up in subcontractors. work and was year-over-year million at as $XXX reliance XX% million, revenue more Services we finished we QX from SI QX. $XX minimized revenue million, transition partners, down our on implementation low in our of $XX to our

are pleased year-over-year year fiscal We how in revenue and services expect with year growth finished modest the we in XXXX.

margin point Turning are efficient was XX% XX.X%, a compared will industry-leading we in of profile. to year, at up basis. as profitability Gross and $XXX showing increase. for cloud was much non-GAAP Subscription in service Overall and an the profit investments XX% to cloud function we The percentage gross This XX% a the margin made ago. platform more operations on margin a XX was discuss our fiscal we year-over-year. deliver increasingly over gross year million. support which was cloud gross attractive up

year Services was bonus QX, income the longer-term margin business. margin gross for to as above $XX.X of midpoint ago. was this of just closer key Operating in expectations with expectations targets. impact due just than we to XX% which offset revenue outlook. compared our below our our Notably, year positive a employee was gross by The higher financial of accrual was was which margin the million, higher-than-expected outperformance services the impact X% of exit the was breakeven

ended and operations flow on in flow, $X.X significantly The was last in year, overall cash quarter point cash, flow year cash our Analyst equivalents million. collections. surpassed Day X.X%. profitability the were expectations compensation $XXX and million billion and for we year ended the progress flow investments. inflection up We at an and the with exciting at the cash from cash our on cash stronger-than-expected We noted at stock-based $XXX Operating free that

We debt in also in in and expect to settle convertible March, $XXX million we cash. have matures that

to turn me let our Now outlook.

model growth constant at billion, an reflect our For million to we fiscal expect our has fiscal million had outlook. approximately of 'XX XX% impact $XXX on the currency Updating negative XXXX, to $X forecast ARR midpoint. rates current between $X.XXX representing FX

billion year to Total billion. between be expected is revenue for $X.XXX $X.XXX the and

strong We expect is a be signed deals rate subscription cloud 'XX. the representing growth. $XXX million, we fiscal revenue this of XX% approximately of growth Maintaining will strength the reflection in

million million Support revenue in migration revenue. installed continued in million subscription or will the year-over-year of cloud $X decline as base the a $X approximately $XXX by about of resulting of result support and our

support support license activities for reminder, to subscription term customers, revenue attaches a in fee. As are customers included cloud the

expect license decline is true-ups progress partially steady contract We by in due a which on-prem our revenue bit customer cloud to to offset migrations, on base.

million. revenue was approximately for -- services revenue $XXX outlook Our

gross services subscription to expect support for We XX% total margins approximately gross approximately XX%, gross be and to year approximately XX%. be professional to margins and margin be the

progression improvement. this to as work with pleased drive are we continue margin to We

operating million and between income million the we respect year. to non-GAAP a $XXX for With of expect $XXX fiscal income, operating

GAAP We negative income operating million and $XX also $X expect between of million. positive

upper around mid- to our modern strength the than Sales expenses should significant we us help I to expect grow. spend fiscal raise applications R&D the digits. take engage, we grow less XX% while the to spend able and and increasing a opportunities in our to deliver and targets many grow in in insurers should most some bit of advantage operating marketing that also 'XX. business, Given in in R&D in of our we G&A notably grow to goals in single innovate the see and invest cases, are as front in profitability on

from flow operations $XXX between in is to fiscal be Cash XXXX million. $XXX and expected million

approximately build-out India. million Our software the including in $XX development CapEx in are capitalized year office million projects expectations in $XX for and between and $X $XX costs million million

in more found but outlook press bit me be provide color. can let QX earnings Our release, a our

QX, Given in we activity not we growth quarter, so sales typical sequential the impacts QX, into strong expect in have seasonality many first ARR did which expectations. deals slip our

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

We expect XX%. margins margins subscription total XX% and services gross and and XX% support margin around between of XX% and approximately of

sales impacts related QX are annual which commission employee and bonuses out expenses flow. cash Also, to paid next in QX,

year. As a expect result, similar to flow follow pattern we from experienced operations a cash to QX we last what

or many and track year in my on we in in are during FY XX that look New proud CFO Day we exceed we York. we forward you incredibly the targets the at our summary, In first coming October Analyst established had are Analyst October and of Day as to 'XX we of to meet seeing back of XXXX, this

for let's open that, the With call questions.

Operator

Ken first Oppenheimer Instructions] with from Wong Our question Co. [Operator is &

Hoi-Fung Wong

Are in linear? dynamics this Just the Mike upfront be The some or the customers? the deals? color little kind John, and would steep can to with provide of fully deals? these kind help through one-off these that of of context or either first you flatter back on any large we color ramped these you Are seeing typically for a the one board think are us Would fantastic. say of fairly across

Mike Rosenbaum

Sure.

briefly, on I'll touch real John let me then comment. Let it and

at first I Analyst be impact provide the a The into provided normal to detail corresponding We're activity, bit on to you structures commentary more with a thing around Day. and want around ago read ramp that structures and to respect to this relative we'll and seeing we don't is little ARR. pretty But anything the able the ramp year ramps.

into shouldn't You read this. anything

drove like of, the John? number. quarter into ramped to deals a proud me, very a bookings number a a healthy. and ramped outcome had that add, phenomenal so with that that -- Super in the the in board. and reasonably successful way that execution of team just to That's deals very, indicates kind that's creates that's deal drives the bunch strength and of with I'd the fully were business. great across the sized it fully thing value it. read great the the from Anything total only just very They to you perspective We quarter a

Jeffrey Cooper

at that add just it. if I are to I'll last quarter, X dimensions there Yes. look the

deals. in The other getting larger team covering for of to attuned The is important business, more than the pretty one of is cases, rather more QX certainly, as in these areas scope. problems some just and it's prevalent that addressing in power is suite business lines solving conversations, is consideration. -- scope initial and additional first the And for maybe do was listening much that, areas but actually of we the pulling more

Hoi-Fung Wong

number, guess in building that one guess the 'XX? in XX% a what's it And fully I for ramped be we that for guiding what maybe compare also way number. Jeff, the on kind potentially would 'XX. an when fully that in XX% acceleration quick to we're just Perfect. wrong with versus us there's fully of I the to then kind future? about right assume Or at looking fiscal ramped a read to ramp of

Jeffrey Cooper

The visibility ramped as not we the But would that range. us Yes. I'm XX% an the look I growth. outcome sure out model of above acceleration and fully kind certainly confidence gives durability at think of of it ticking side. do bit overall into on the ARR kind more the more above a bit mid-teens bit for of durability of a us kind I creates growth a

Operator

next from with question Our is Turrin Wells Michael Fargo.

Michael Turrin

is I software. better are the tailwinds we're bit year. on the seems John, just first Mike Congrats maybe a of seeing series the you're across that question what or than guess close of a it getting

just alongside what the and love the on with terms perspective environment, competitive and of on in end year? sit you your commentary So you've cloud to the of hear overall dynamics observed where I'd demand overall just momentum taken

Mike Rosenbaum

our us, is certainly that does the question. very across record we it's of constructs past contract serve is X right? over helping success ARR also some are with in lift just just based Sure. track on products establish and very, durable. pricing that First I that of the constructs, based Premiums industry X create There's alternatives. opinion, been to cloud the my up think or DWP like insurance feel a And lot really, Thanks we are going to with we distancing the they're the our ourselves industry, increasing. from have things for able on our years. our

whole the fiercely market, deals. compete I those of I'd the seeing competitive -- it's guess, in the collectively we're that contributes programs for a, frequently our winning performance in closing all than the they're we're conversion the single we couple think are community, quarters. expected factors programs, also strength we in and still in quarter platform, the particular in I that lift We're on, And I fair looking it We a that deal, have to we at just ability just a trust incredible share years the speaks these it call the the quarter. into a our the are opportunities successful, deals ago, the that make a success we confidence had which to land to more in still sure are and in of working might and but think every and that

John has to to that's I'm So my and sure some add it. take, more

John Mullen

chapter face has the is cloud conversion industry nice that small really of moving solving ability Mike's defending driving by a and platform. problems that from business programs been platform is the we've the the And area, to think point, the While provided tailwind cloud we referenceability rate. a with of biggest scaling I But by really, for community. surface large it's that to

business convergence that, over and are to They're the no navigate I really every a has what of As we that's this in certainly year. needs spot help day, the dimensions. we're industry X tight and merging really IT and good together longer needs a think course different of saw

Michael Turrin

leading That's for of target the 'XX can't in Jeff, cash ahead notice the margin all looks like press with running but fiscal release. model. super it's you're also flow flow helpful help commentary. I cash

session increasing So don't a hosting, focus what you're of steal driving maybe but on maybe cash you conversion to good you're and there. want thunder speak -- bigger that's just to flow seeing the I investor the can any ahead

Jeffrey Cooper

that's mean, cash software kind I inflecting is companies are the pleased an Yes. the the of end perspective. overall we're I flow really from model day, of the think at measured primary that Obviously, with metric how on.

that. with pleased we're so And

of some underpins dynamics that are -- the bit of Some dynamics, noticing difference flow the elements about Day. the non-GAAP of create timing that model. power that we'll and more a our are that Analyst at of a between some bit cash little income the operating we're that talk revenue of interesting But a of and

had years. monitor of for part in But against see targets ours to long-term targets the been appropriate how And has targets think Analyst this out of nice the certainly, and that this be number it's bit the model, Day. we still we'll realization, think of at kind of there about to are as more back established to but very mind, and come it a we've a we'll of our continuing focus a we about the we that our journey talk we always have that

Operator

next is Alexei JPMorgan. Gogolev with from Our question

Alexei Gogolev

Mike, lines environment, ask especially councils because more I've firstly, of hope the about P&C. not softness demand that bit talking the you? the you around data beef. parking are in to you agents. sort? winning from which Can of fight off about for managed market commercial some anything and you Are seen I congratulations dynamics and reflecting more a anniversary year those you insurance some in that seeing we're They terms were seeing is Or commercial with share,

Mike Rosenbaum

lines. thank you appreciate compliment. for going very I to let I'm it I'm question much. about the answer Alexei, going John your to commercial

John Mullen

right. All

market America a surplus market in in specialty has that middle large solid lines and commercial part dynamic really an is for really go still been us. think opportunities. environment. surplus we a forward, also property, we I'll in to large commentary. large really say success market lines and softening finding our and attributable excess potential good That and have set North for all large industry the we're commercial the with on very Alexei, commercial London commercial is us. So What rate as specialty good pace that excess

the large-scale hard I What decisions these enterprise market beyond processing carriers the every make durable that goes soft they and their data to is evolution. exit giving for price, these platform. without very say really changes, to addition core only of and that enter And right critical in decisions is large and make make decision in to thing would is getting decision decisions. to And is commercial markets are commercial day rating monitoring and general, ability tuning and make product it's a to on that very operating difficult a

of So are the help ebbs ability opportunities about little navigate and tuned into we're hard we the a and our flows think good we really to faster. and where markets soft feel

Alexei Gogolev

there a Do you mentioned elaborate spoke, the last margins it away? R&D fads that think expect AWS margins? you just front-loaded we investment. Can the Jeff, I some to Has going for benefits quick contract benefits on question from you sort was you. gross time gross forward? of to more

Jeffrey Cooper

AWS. Look, Yes. long-standing that think But have I'm we get the in with certain incentives arrangement. the that not that realize into contract. a we to we contract particulars of I do going over partnership have

in margin a that. Cloud Guidewire efficiencies and think big of margin and how overall that, an the into we're Platform there's that the I the realizing largest result about the part think the -- we've of But made we of as expansion that plays the is expansion. investments element

margins. arrangement too teams on focus of the kind to want wouldn't on the our engineering much focus I more and enable So delivered to that of particulars

Operator

Our Kevin next is Sachs. Goldman question with from Kumar

Kevin Kumar

of would just Mike, out are customers How how you Are on-premise? do momentum into that build that head characterize of fiscal to Is who 'XX? migration kind as interest we I think about there? wanted to activity. from ask kind starting overall you seeing you you plays

Mike Rosenbaum

Yes. describe improving/steadily would question. as steadily it building. for the Thanks I

and much concept Guidewire they're has ground I perspective they migration stories, demonstrated, do with moved breaking -- that that think, makes an the reliability about their success, success customers. Cloud, again, have the think not new more customers of this from -- to question it the they're business. longer to the it with that the when record track has IT we've for those it's a of a sense when planning no

you see that And so build.

really an it us get -- This out opportunity going over year. customers X have grow opportunity one nice this not get that course to things Guidewire for help all spaced many to to that for It's the to -- about resonates up customer for And help an incredible those challenge. doesn't base. It's of -- is us ARR. we more agile. and going for in It's of it's we're come years, it's the

use between pair yes, a right is All going business specifically new migration. now customers for components so balance activity happy especially now. we're those net cases to the it's that and very migration steadily well we of building, pretty existing and -- and it new the very we're And for with where right net either are us customers or the

Kevin Kumar

And great. true-ups. premium the maybe That's for on one Jeff

just help of kind impact terms of of of how how broadly of to some You can revenue? talked you But the impacting the more broader about in affecting Anything models? share context kind to that is true-up curious revenue. the model kind of the ARR that's give license

Jeffrey Cooper

resilient Yes. No, that, pretty in would couple a It above remain it of and also growth and given added next now activity, of base. saw more backdrop the cloud proportionately a from into year if I But healthy and levels. we would see be typical there elevated are looking balanced, slightly both that the we mean right? cloud, DWP scale coming the was saw the think a It coming from And ARR you year. expect healthy on-prem of overall at we I this overall what installed beyond points true-up was look to the to true-ups year. percentage we CPI amount installed at our base. ARR a

an And both balanced and on between so absolute dollar, cloud. was it on-prem pretty

Operator

Our Becker Dylan with from William Blair. next question is

Dylan Becker

function full a more from Seeing carriers the better Is Jeff back more expand of but but they're a little how a change kind Tier looking meal. it's ecosystem? you a both, to function, going X probably adoption. maybe step ramped some bit seeing Or of adopt a piece it's that ARR. John, increased both, able to fully and look sales that suite points I'm scope? being additional John, of bit Maybe sure to those in color on I bit of made larger willingness a there. at think, the little and maybe of targeting Is that point deals who

Jeffrey Cooper

this job I in say making there's a activity, a healthy progression bit I good the on-prem noted done of wouldn't team And and when beyond Tier -- of how is of seen we're little giving at expanding has customers attribute I commitments. initial think platform the a some we activity activity. maturity think that footprint. an just of X terms look it we that have migration, larger maybe Tier X really and John is comfort X to but to continued the just understanding some would the longer these It's Tier I this, selling.

don't know anything there's you if want I So to add?

John Mullen

the shoulder The I a and about the still each call much are this it. very driving other shoulder what's for off customers -- that think other of and fit what's said, tier point. it's what bite of call to Jeff them. the prospects right and for pace The I don't what's cadence specific deep programs Xs the what's is and to bespoke size conversation at each really to right Tier about and customers very have conversations would very, ability suite reiterate value

Dylan Becker

maybe I fact is to, adoption that given that know step kind there's that up that drivers if that's the is that quite conversations yet core for then here, is modernization constrained, of there ecosystem driver think additional we picked for up kind system a well about labor right, Is gap about that massively thinking as an of or coming they're in -- skills of as Mike looking based we've like. up to efforts? something your in the as what capacity Okay. I that is one function but don't conversations another Great. of And mean as coming this around

Garo Toomajanian

What comes you're describing certainly up.

I providing in aligns expectations, work. sometimes younger them systems computers think how should work are -- say, industry that attracting to That comes people in of their work the context should about the it for up up. come let's systems to computer and comes

with think they've are to also teams of it are are XX, XX and capable sometimes and you systems the them that years. able to what up for a that been the legacy of running development people asking retain comes your perspective I on maintaining work you

up. this So certainly comes

and with constantly efficient get the areas. more they we folks think all so provide, company I helps the operate the they those that efficiency, can whole the And trying can industry in done get mean data is effectively. agility, more operational have insights existing to the that that it more and IT I the help

for modernize along so of it's with And push to industry. into component sure, a factors a overall others the the that number just

Operator

is next question from RBC. Our with Rishi Jaluria

Rishi Jaluria

cloud Nice to Two see transition. momentum on for me. continued the

customers time some now on about towards have the of seen think to thinking Cloud that to being about behavior of over customers you ramped What especially migrated from fully their terms getting expansion. Guidewire customer have maybe in to spending fully maybe in have that their platform, spend, Guidewire Cloud wanted potentially propensity own terms that level. you I First, of live Platform

cloud we they're NRR those for quick look of or compare would if customers. InsuranceSuite example, How similar on InsuranceSuite follow-up. basis to a cloud? to NRR And For for on ramped fully at got then Guidewire a kind customers were as I've on-premise

Jeffrey Cooper

seen to I'm get base. within different expansion cohorts. mean going installed we I into healthy mean not cloud have but NRR I the think Yes. a I the

Guidewire environments increase that different of spend platform they of that within and for what in we platform requirements in Guidewire. how Cloud call form the coming Some the build is

may that attach in the of sets Some of within come form of our suite. analytics data and product different

early something judgments still pretty attach it's any think that I rate, but we're watching. overall on make that's to

for installed obviously the how And expansion cloud base. seen we written renewal then premium well think we've some rates as direct about flows that into net

that more on-prem, and the presents especially you the I make probably think early of how So any start to as marketplace to comparisons. the there then real about there's itself future, think there in in too but sort potential that cloud, was

Mike Rosenbaum

according plan, we that these business success. various customers track relationship cases based use going to the successful, to I of the can InsuranceSuite. it's they're of think, sense make us, to don't with If it would they're well. we within success honestly, is very exactly also system very It's applications more going to I expect. well. track our going program, model, are of and component it's the make want do closely. to exactly core This And with has is won't what do off But I of that drive the record like find but to going to that say with, expand the we progressing other it

partners, add-on analytics. Jeff other with the opportunities with with platform, data, with mentioned

I a of right story of will the part it's increasingly now, going according plan. going think forward. this And sort be to

question. So it's insightful an

going early, I think well. but very it's it is

Rishi Jaluria

right that Or industry but a big you're from number guys. in on you All That's Can over And be glide over remarks, then then actual to the momentum what the driving that called InsuranceNow actually InsuranceNow And and perspective? side. What's cloud prepared or of time both talk or get there insurance upgrade you land guess, is who two, is would really look an your it. now, What path is seeing maybe right. I to, for out look helpful, product past might seems improving Mike, Got one, success like? some number what really path? like it solution. InsuranceSuite so. that with on-ramp you've insurers the maybe enough maybe year on seen the

Mike Rosenbaum

Yes.

invest at with of InsuranceNow we is sure happy spot. fit. who should the cohort have strategic sweet InsuranceNow very common the both possible those do to that make And customer as it's with base we to we of America that of ago in competitive question we an maintain embarked to is what core a a very very, be where has when North sort -- a in companies good best they and insurance cloud looked were our very as good the to much is infrastructure in we're And opportunity find when continue commitment this leveraging that Primarily, years to and chose both. we our the on strategy InsuranceNow with InsuranceSuite. transformation There's do So applications to product.

product. So great It's unit business a it's a great within the company.

acceleration making about respect it's in our and commitment deal. that's competitors past down that to it to With clear comes It to. has very like mean, say I years. investment of would more in beating over very, do it's with it I to sure it and our us being the couple that what

try There to InsuranceSuite. on of we with would With with. InsuranceSuite, that to respect really, start a platform a the the -- strategy to an we -- to imagine lot like on customer you shouldn't landing say begin on-ramp we focus to and I isn't move InsuranceNow have right

Just it's implementation of X things. those a significant on pretty either

like And very so get the we to that from correct would beginning.

a But for Guidewire from can an have and Cloud just we're and is to us. InsuranceNow do the infrastructure beneficial that's value it's to to the move going committed successful analytics working customers, data opportunity is additional that committed basically service our run and beneficial platform create us the It's like And for to well customers. pretty we these to we're us. more little offerings and this we Where over around on what's that's more ensuring to more efficiently. and add margin mentioned, I bit is

Operator

question with Parker Lane Our Stifel. from next is

J. Lane

Good new to net customers. the the see momentum with

during to was any replacing prepared customers you're challenges you in move systems quarter. decision think talked common and or theme on the persist common the to their that X Mike that either remarks, John, face Guidewire? of about those they during that terms I it your a

John Mullen

the is long common that to. to we wins The to new of the customers and are These product business the that stay conversation and that some out with to table. understanding the talking time. has is business them ability to close and the growth definitions, time, first right relationship to right the get thematic those net what's for wins, talking been been is really opportunity, in we've the really think theme of need markets opportunity and quite rates. right problems. products, the And for around I for bringing the faster We've move a all building

early suite around couple the confidence and of in And for in of the quickly is X led claims conversations. remarks, a while of specific often or and mentioned prepared commitment. confidence reason a I be take as conversation expanded cases it was the those conversation a that quarter, execution cases, to -- the the In that those very billing really to

the the So pressure are: one, X I'd very speed at is say compete themes major to real.

important platform to piece And so close because for the the close place confidence in of customers right to of and conversations was the in being theme we the the to And expand. quarter a really year. today, stated those the because have being ability second them of how time was then and the really the around

relatively modern old, of that ago up in a that implementations the address and bring now some couple a good ability years years displacement of has expansion feel or I some in confidently those couple obviously our really we you see a cases, in in cycle. -- maybe of sales execution about displacements of because systems would that to

Operator

Thank you.

Vruwink Joe from with is question next Our Baird.

Joseph Vruwink

ramped the and difference I point growth very far put it talking the for implication would original The just the plan, above you're XX% that comment And net a seem. getting suite value fully finer that. drove ago on to what your full XX% more just the John a that made new deals. and you're That's growth ARR booked XQ. between about quarter is in wanted

earlier any And ask win full XQ the more there's and deals so grabbing modules factor originally XQ maybe maybe pencil I at some bit behind timing these deals of are came think skew a I in to just you simply were weren't then that in wanted strength? you you Did ended close some of Did that a favorable perhaps up. rates expecting? suites? deals up the

John Mullen

Yes.

QX but table us that was in "Oh, of pretty the table, QX." there or best to close man, certainly typical anything our I was I didn't sometimes run did think going is to -- had was highlighted key think we there don't and say, couple components. the the I think very run we you and QX, to fashion. nothing a word the a think it surprised don't that that So until strong we internally, I that use

weren't big X just kind willingness. think a bit goes are more ago, we're make willingness little a bit a and it And We're starting the commitment I willingness, of we this make seeing years then seeing a to whereas small, seeing at see a how commitment. We more seeing big outset. and

ago. than quarter strong trend, saw I feel programs, the from it we in have willingness certainly want assume was were we a platform more we the that most big we're behind that very a but was the that X another years that QX. an QX, that muscle last think can big ready because and to outcome. those support is they put confident negotiation to right, seeing And very for But this we insurer's backed they but us, up didn't that perspective, today with

Joseph Vruwink

one what That's great. wanted And then thing reconcile. I -- to

bigger all So going upfront. in and average deals customers

I I carrier this XX deals Tiers cloud think think lot this I doing right, X. and bigger XX the folks from think a X that's came of that heard it. quarter of through it's hear But a

has up X well I'm Your market? going starting more the it does until maybe down more see referenceability move wondering share Tier established lion is actually is drive even So down that better strategy the if you've for are And But to just in forward? this and maybe than outlined actually meaningfully point? resonating you market X. needle you

Mike Rosenbaum

number say, of span X a Tier one, carriers. I'd big is

X can Tier X different it. into X kind segments within or So -- split there's of be

X Tier doing specifically at proof X own It's its that as digging say works happy Tier in think resonating the of towards It's then about proof still I about do very X? of X getting technically. higher How end of very deals points, specific market. we So the and Tier level. proofs so points, and resonating in deep talked them And we concept would that good. those that Tier Tier X sit X that's in down

customer deeper the out resonated since here analysis. The the is we thing that I the got come has in goes a day the better

proofs at carriers some so point, professionals X but this got is really of not the where referenceability. on more Tier And that with And of points. and We're of Xs, in concept we specific deeper across Tier a proof well past running and and now movement it's powerful. very technical relationship, conversations which importantly, just very portability it. dig And referenceability even we're of deep has more the lot as

we're answer, marketplace. the that the and of backlog put arena Mike in said in outcome also into they want earlier work the best business really prepared as the to drivers for And timing, for that the what's best -- might business the have business in the in other they

moving Tier each it's carrier. well. So specific again, a still of Tier Tier parts X is to very X, X conversation X, very Tier portable across all

Operator

question next Sklar Raymond James. our from Alex And with is

Alexander Sklar

John, you. one for first

business way. on in question on from conversations maybe a the Dylan's standardize line Tier personal across of willingness more it's X indicating to feel up business of all like all Or business? lines customers, by there in does like a business commercial following changed the terms line of Has pretty of Just separate still different slightly decision? a anything of top of it the ask lines or but

John Mullen

amount we're point, business because to allows It's long-term good And from lines for the know a deeper. going a line very of very it in and we're products. of to is, specific business we there, go have specific good out us I depth tremendous with think, it conversation. and still expand bad, okay proof It's opportunity. for those by specifically of But or business line that dig to prove and or of because it of gives us which to

Alexander Sklar

one Okay. Great. And for you. then, Jeff,

year? upfront. of of we Any landing Just to upcoming success year something you're kind the about seasonality you've how bookings of the lot quarterly change is thinking this as that smoothing into in had earlier year a past this go over with

Jeffrey Cooper

then lot a of we Yes, we a work did that, had had blowout on QX. a we -- and

QX us we and it position. So in a QX look, QX, the a Certainly, I strong saw did very us. lot team think put of for I in mean pretty typical work that linearity

that so good the on. continuing of we're that doing And to don't Herculean on hard a size make to vertical is we the we team sure team given I focus And really QXs, rely think the sales job. think and I work our

I I at of So year, look expect kind this would as similarly.

John Mullen

in increasingly activities linearity focusing our our the I'll financial up we benefit through for for add one for on lens. of better up QX of at activities, the an to financial point planning the execution is us, times linearity become real But to part, our look timing when market's due the to of the important more and ourselves is quarter team allowing then our customers' us large it's, to smoothing. customers in

Operator

VanVliet Matt from Our BTIG. next with question is

Matthew VanVliet

to the especially it. wanted community, of on side just I services partner the on touch

to guess, conversations house Our is of I still Or in of relationship the there? execute sort to be plan work continue done? incremental place better there and the there both more and knowing But Obviously, of implemented? a you're talk you've do in just lot here and now improving you communication John, continuing to about Is back of and it well. where forth. a sides on matter plans feel like changes the very at terms just

John Mullen

into you look of regional specificity, partnership Pacific, Japan, is dig round Asia of much Europe is very next distance, the and Yes. for which different needs same. the and becomes ahead a requirements and the Thanks different more it from if for of you specific very question. have some it's The in -- But at us, if particular, work focus it there.

working very the right for that go-to-market directors also specifically sure managing plan strategic our collaboration. And for and planned each in now so the got we've make with we're services region to right

don't the elements bring we can scale at that making on to the changes all predictability sit and driver increase together program in programs in the of SIs how -- continue that the that work we I seat how sure community. piece is to invest foundational The think scale to of and

that progressed but So same, more the really last pleased how over year. this of with

Matthew VanVliet

little regionally or on items you even a cultivating or out the bit as more on GWCP. cases sort majority on getting versus quickly on are we it partners, look and expand that customers more of there, being building out to lot from at how ability the of helpful. When essentially one the more element dovetailing very a now some technology And maybe version Yes. more balancing marketplace of the then specific your are partners use path either customers your you that to on internally very platform? have of dependent that into the of of Very

John Mullen

sell think Yes. question. a about want would want They this choices. that the think Guidewire right? our They the want have want us is This And have produce from I customers vendor, create to that strategic is as ecosystem something tough also and what I then people about we to a we a way to to deliver safely has that to party. what objectives have that first reliably serve. system enables we cloud connect openness of securely that build and the degree into what it and we And we and we will

to going And more. there'll customer everything said, to that more industry, a are in we're be we're in to strategically to to base we'll and certainly be do a able provide we I do -- strategy have and our good product value position more not going really this Like with building I think attempt how try time will maybe we basically should have that want were that's a to overlap But of how you partners. that from be and time, be to ecosystem. Guidewire, will to if dynamic you And about open we there about. approach to customer

if insurtechs customers into a, think opportunity integrate very our to partners our day, cloud, call Guidewire of with keep creating connect And create great end going applications to going on that for community us. that's be the a at large build ecosystem. of the I for and that's And and we technology whole to it,

it. a that's how And to manage so we're that's a But single through how case. complicated work It's and about it. approaching high at I every use think level, thing

Operator

from with JMP. is Aaron Citizens Kimson question next Our

Aaron Kimson

as state current reinvest hard of end the classify customers Great. for in market flow. have robust your age it of or golden rates fair and Would high simultaneously P&C a the a interest to to market the bit a be

it the think do of if as how see sustainability hard to on market end piece Guidewire we So you the both through flows start rate cuts? about market the strength to and

Mike Rosenbaum

industry hard this love Yes, it changes. markets, I to going going to I changing That's a what dynamics durable want them I and as would that's systems is markets, and companies industry enable to more adjust need Guidewire operate unique there's efficiently, make to be can agility. said, decisions going they say serving durable. how is. is that need And what deliver is there this, to way. there's nice this provided about this want and industry core in a there's I the see, as market, systems John quickly to their faster, to be very this thing to softer be about for and do I is core serving what's is that that Fundamentally,

opportunity want may day a the that great over, this XX So I -- positive don't there's just but to a don't -- think we outlook years. next a for which all creates just creates to the such a The that operate be to may grow least Guidewire. that modernize And things imagine it I people that in opportunity continue It industry. in insurance to would be going XX going very industry. improving steadily huge to help yes, and reverses for I the I industry a right? -- direction think at is imagine

risk premium, whether to going and now wonderful, or great industry or the modernized. I to durable stay or not that right? is think conditions this kind it's current or just to continue still it's need are not rates that's But Whether of right going be to interest

plans Guidewire making And do XX or this for we years? is the I about so next for how XX that's how think industry serve

Aaron Kimson

since then That's opportunistic second X.X have, to it's the around more been you really talked about I question helpful. wanting months M&A. now And be

market in quarter What today valuation last organic changed product the the investments. last private spoke in organic And outlook inorganic expectations? seeing You you on about are pointedly pretty over quarters? few investment your versus has

Mike Rosenbaum

Yes.

just be it The the improving, the increasing, in possible seriously position of improving, certainly We able of and our more more makes durability customer M&A have to business a consider the for we the it past, more right? strength and team to and than our get to we we base approach in business culture inorganic right the right the also But and to very and are right get price get we we in We careful. us growth, okay? the get technology that want with ensure fits Guidewire. and we right are

And right and overall just of landscape. so Guidewire put we I don't at a -- that company at the And I risk. special in something looking have terms want now think we very at software to

we're so to very going And careful. be

we looking So I'm yes, pretty aggressively, but also more and more open picky. we are are it, to

that sure do We pretty are picky also and want it we we correctly. to make

We I execute. people And have can understand also I confidence we product that want high Guidewire. of to a that degree can at build

and the effectively. build have We proven years X execute can we that software over past

a I that categories build will product we'll it, may confidence degree we of in take so little a but to us to organically, build And and certain choose we'll -- have execute. high while

I that's to open We're but put guess I clock us do necessary our me a on it, would we're Don't to not reach it's it. think about to So how M&A. -- long-term not ambitions. for

Operator

no There at questions Thank this are further you. time.

I think back over for to any Mike closing like I'd Rosenbaum comments. hand to floor the

Mike Rosenbaum

at look seeing year. bit little thank connections the joining in to in and our I call the New Guidewire a you, appreciate us to Analyst on year. if or possible, maybe everybody putting say work a today, just York everybody at deliver forward I to Day the want you later all great to

joining, everybody. thanks So for

Operator

conference. today's This concludes

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

Guidewire Software (GWRE) 5 Sep 242024 Q4 Earnings call transcript