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Jan 31, 2025
Guidewire Q2 2025 Earnings Report
Guidewire reported strong Q2 2025 results, surpassing expectations in revenue and ARR.
Key Takeaways
Guidewire's total revenue for Q2 2025 reached $289.5 million, up 20% year-over-year. Subscription and support revenue grew 35% to $177.8 million, while license revenue declined 10% to $63.7 million. Services revenue increased 26% to $47.9 million. ARR reached $918.1 million. GAAP income from operations was $11.7 million, compared to a GAAP operating loss of $12.4 million in Q2 2024. Net loss was $37.3 million, translating to a GAAP EPS of -$0.45, while non-GAAP net income was $43.9 million, with non-GAAP EPS of $0.51.
Total revenue increased 20% year-over-year to $289.5 million.
Subscription and support revenue surged 35%, reaching $177.8 million.
GAAP income from operations was $11.7 million, reversing a prior-year loss.
Non-GAAP EPS rose to $0.51, compared to $0.46 in Q2 2024.
Revenue by Segment
Forward Guidance
Guidewire expects continued ARR and revenue growth in Q3 and full-year 2025.
Positive Outlook
- Ending ARR projected between $942M and $947M for Q3 2025.
- Total Q3 revenue expected between $283M and $289M.
- Non-GAAP operating income forecasted between $36M and $42M.
- Full-year ARR guidance raised to $1B - $1.01B.
- Full-year revenue guidance increased to $1.164B - $1.174B.
Challenges Ahead
- GAAP operating income for Q3 could be as low as -$4M.
- Potential for continued GAAP net losses due to operating expenses.
- Debt retirement costs may impact profitability in future quarters.
- Ongoing macroeconomic challenges could affect sales cycles.
- License revenue may continue to decline amid subscription model shift.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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