Guidewire Software, Inc.

Q3 FY2026 results: ARR was $1.147 billion, up 19% year over year. Total revenue was $373 million, up 27% year over year and above the high end of outlook. Subscription and support revenue was $245 million, up 35% year over year; services revenue was $72 million, up 32% year over year. Non-GAAP gross profit was $247 million, up 29% year over year, with overall gross margin at 66%; subscription and support gross margin was 74% versus 71% a year ago, and services gross margin was 14% versus 13% a year ago. Non-GAAP operating profit was $78 million. Cash, cash equivalents and investments ended at $1.15 billion, and operating cash flow was $61 million. For FY2026, ARR guidance is unchanged at $1.229 billion to $1.237 billion, implying 18% to 19% year-over-year growth. Revenue guidance is now $1.46 billion to $1.47 billion; subscription and support revenue is expected at $963 million to $969 million; services revenue at approximately $270 million. Full-year gross margin is expected to be 67%, subscription and support gross margin about 74%, and services gross margin about 14%. GAAP operating income is expected at $124 million to $134 million and non-GAAP operating income at $314 million to $324 million. Cash flow from operations is guided to $365 million to $380 million, and CapEx to $30 million to $35 million, including about $18 million of capitalized software development costs.

Mike Rosenbaum characterized the quarter as another strong one, emphasizing 11 cloud wins, healthy pipeline momentum and rising customer interest in PricingCenter, ProNavigator and AI-enabled tooling. He repeatedly framed Guidewire as the core platform insurers need for modernization and AI adoption, arguing that the company’s open cloud stack, workflows and data give customers a practical path to deploy AI in insurance. His tone was confident and expansive, especially on the idea that AI tools are speeding development, migration and product innovation across the ecosystem.

Jeff Cooper emphasized that Q3 finished ahead of expectations on revenue, profitability and cash flow. He cited ARR of $1.147 billion, total revenue of $373 million, gross margin of 66%, operating profit of $78 million, cash of $1.15 billion and operating cash flow of $61 million, and noted share repurchases of 1.7 million shares at an average price of $147.07. On guidance, he raised full-year revenue, operating income and cash flow while keeping ARR unchanged, and said the revenue outlook reflects healthy DWP true-up activity, strong new-product attach, a robust Q4 pipeline and increasing services demand.

Analysts pressed on why some ARR deals slipped, whether the issue reflected macro or AI-related budget pressure, and how much confidence management had in Q4. Management said the timing miss was not macro-driven, not AI-driven and not unusual for a business with a small number of large discrete deals; they said the pipeline is building and Q4 could be a record quarter if execution holds. Questions also focused on ProNavigator, PricingCenter and Underwriting Center, with management saying those products have shorter sales cycles, strong customer interest and should become more meaningful contributors over time, while Jeff said fully ramped ARR remains healthy and visibility into Q4 is strong.