Presseerklärung

Guidewire Software Announces Third Quarter Fiscal Year 2020 Financial Results, Updates to Leadership Team

SAN MATEO, Calif., 3. Juni 2020

Guidewire Software, Inc. (NYSE: GWRE), provider of the industry platform Property and Casualty (“P&C”) insurers rely upon, today announced its financial results for the fiscal quarter ended April 30, 2020.

“We delivered strong financial results in the third quarter highlighted by 105% year-over-year growth in subscription revenue that, along with total revenue and profitability, exceeded our guidance ranges," said
Mike Rosenbaum, chief executive officer, Guidewire Software. "I am very proud of how our team and community have responded to the headwinds caused by COVID-19. During our third quarter, we made significant progress on our Guidewire Cloud Platform release, closed a new InsuranceSuite Cloud deal with
Aviva Italia, and added three new Cyence customers."

Third Quarter Fiscal Year 2020 Financial Highlights

Revenue

  • Total revenue for the third quarter of fiscal year 2020 was $168.2 million, an increase of 3% from the same quarter in fiscal year 2019. License and subscription revenue was $93.2 million, an increase of 22%; services revenue was $54.3 million, a decrease of 17%; and maintenance revenue was $20.7 million, which remained relatively flat.
  • Annual recurring revenue, or ARR, was $483 million as of April 30, 2020, up from $460 million as of July 31, 2019. Quarterly ARR results for fiscal year 2020 are based on actual currency rates at the end of fiscal year 2019, held constant throughout the year.

Profitability

  • GAAP loss from operations was $25.6 million for the third quarter of fiscal year 2020, compared with $15.8 million for the comparable period in fiscal year 2019.
  • Non-GAAP income from operations was $5.8 million for the third quarter of fiscal year 2020, compared with $12.6 million for the comparable period in fiscal year 2019.
  • GAAP net loss was $31.0 million for the third quarter of fiscal year 2020, compared with less than $0.1 million for the comparable period in fiscal year 2019. GAAP net loss per share was $0.37, based on diluted weighted average shares outstanding of 83.0 million, compared with less than $0.01 for the comparable period in fiscal year 2019, based on diluted weighted average shares outstanding of 81.6 million.
  • Non-GAAP net income was $7.7 million for the third quarter of fiscal year 2020, compared with $15.2 million for the comparable period in fiscal year 2019. Non-GAAP net income per share was $0.09, based on diluted weighted average shares outstanding of 83.5 million, compared with $0.18 for the comparable period in fiscal year 2019, based on diluted weighted average shares outstanding of 82.6 million.

Liquidity

  • The Company had $1.3 billion in cash, cash equivalents, and investments at April 30, 2020, the same as at July 31, 2019. The Company generated $5.9 million in cash from operations and had negative free cash flow of $16.3 million during the nine months ended April 30, 2020.

Business Outlook

Guidewire is issuing the following outlook for the fourth quarter of fiscal year 2020 and fiscal year 2020 based on current expectations:

(in $ millions)

 

Fourth Quarter
Fiscal Year 2020

 

Fiscal Year 2020

Revenue

 

204.9

 

 

-

 

212.9

 

 

703.5

 

 

-

 

711.5

 

License and subscription

 

138.4

 

 

-

 

146.4

 

 

419.0

 

 

-

 

427.0

 

Maintenance

 

20.2

 

 

-

 

21.2

 

 

83.0

 

 

-

 

84.0

 

Services

 

42.7

 

 

-

 

48.7

 

 

198.0

 

 

-

 

204.0

 

GAAP income (loss) from operations

 

4.2

 

 

-

 

12.2

 

 

(64.8

)

 

-

 

(56.8

)

Non-GAAP income (loss) from operations

 

36.7

 

 

-

 

44.7

 

 

65.0

 

 

-

 

73.0

 

GAAP net income (loss)

 

(2.4

)

 

-

 

(5.6

)

 

(70.9

)

 

-

 

(63.2

)

GAAP net income (loss) per share

 

(0.03

)

 

-

 

(0.07

)

 

(0.86

)

 

-

 

(0.76

)

Non-GAAP net income (loss)

 

33.8

 

 

-

 

40.3

 

 

70.0

 

 

-

 

76.7

 

Non-GAAP net income (loss) per share

 

0.41

 

 

-

 

0.49

 

 

0.84

 

 

-

 

0.92

 

 

ARR growth on a constant currency basis is now expected to be between 9% and 11% in fiscal year 2020 compared to our previous range of 11% to 12%.

Leadership Announcements

The Company today announced that chief sales officer
Steve Sherry plans to retire next fiscal year and that Frank O’Dowd has been named his successor. Additionally, the Company announced the permanent appointment of
Jeff Cooper to the chief financial officer role, after serving in an interim capacity, as well as the promotion of
Priscilla Hung to president, chief operating officer.

After nearly 15 years as a sales leader at Guidewire, which was preceded by an extraordinary career in enterprise software,
Steve Sherry has decided to retire. “Guidewire is incredibly indebted to Steve for the contribution and leadership he provided during his tenure at Guidewire. He is an incredible sales leader and has built a truly first class sales division here at Guidewire,” said
Mr. Rosenbaum. The Company today announced Mr. Sherry’s successor, Frank O’Dowd, who joins Guidewire from Oracle, where he was most recently group vice president and a member of the sales team for over 21 years. “While Steve’s retirement is bittersweet, we are incredibly excited to welcome Frank O’Dowd to the leadership team here at Guidewire,” said
Mr. Rosenbaum. Mr. O’Dowd will join Guidewire on June 15, working with Mr. Sherry and the sales team through the end of the fiscal year, before taking over the leadership role.
Mr. Sherry will continue with the Company as senior vice president, strategic accounts into the Company’s next fiscal year, to ensure a complete and seamless transition, after which he plans to retire.

After conducting an extensive and thorough search, Guidewire determined that
Jeff Cooper was the best individual to lead the finance organization, resulting in the Board of Directors appointing him permanently to the chief financial officer role, after his service in an interim capacity. “Jeff’s command of the very detailed and complex cloud business model transition, combined with the trust he has engendered and the leadership shown during this interim period, clearly demonstrated Jeff is the right chief financial officer for Guidewire,” said
Mr. Rosenbaum.

Guidewire also announced that
Priscilla Hung, who has been with Guidewire since 2005, including serving as chief operating officer since June 2017, has been promoted to president, chief operating officer. “Priscilla has been a key leader of the organization, embodying the grit, determination, and resilience of our culture. I’m excited to continue to partner with her as we drive the next chapter for Guidewire, Guidewire Cloud and our partner ecosystem,” said
Mr. Rosenbaum. “Through most of Guidewire's history, Priscilla has been an essential leader, driving many of our most important initiatives and finding a way to succeed for our customers. The Board and I look forward to her continued leadership in her new role,” said
Marcus Ryu, chairman of the board.

Conference Call Information
       
What:     Guidewire Software Third Quarter Fiscal Year 2020 Financial Results Conference Call
When:     Wednesday, June 3, 2020
Time:     2:00 p.m. PT (5:00 p.m. ET)
Live Call:     (877) 705-6003, Domestic
      (201) 493-6725, International
Replay:     (844) 512-2921, Passcode 13704201, Domestic
      (412) 317-6671, Passcode 13704201, International
Webcast:     http://ir.guidewire.com/ (live and replay)

The webcast will be archived on Guidewire’s website (www.guidewire.com) for a period of three months.

Non-GAAP Financial Measures and Other Metrics

This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP income tax provision (benefit), non-GAAP net income (loss) per share, and free cash flow. Non-GAAP gross profit and non-GAAP income (loss) from operations exclude stock-based compensation and amortization of intangibles. Non-GAAP net income (loss), non-GAAP income tax provision (benefit), and non-GAAP net income (loss) per share also exclude the amortization of debt discount and issuance costs from our convertible notes, changes in fair value of our strategic investments, and the related tax effects of the non-GAAP adjustments. Free cash flow consists of net cash flow provided by (used in) operating activities less cash used for purchases of property and equipment and capitalized software development costs. These Non-GAAP measures enable us to analyze our financial performance without the effects of certain non-cash items such as depreciation, amortization, stock-based compensation, and changes in fair value of strategic investments.

Annual recurring revenue ("ARR") is used to identify the annualized recurring value of active customer contracts at the end of a reporting period. ARR includes the annualized recurring value of term licenses, subscription agreements, maintenance contracts, and hosting agreements based on customer contracts, which may not be the same as the timing and amount of revenue recognized. All components of the licensing and usage arrangements that are not expected to recur (primarily perpetual licenses and services) are excluded.

Guidewire believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Guidewire’s financial condition and results of operations. The Company’s management uses these non-GAAP measures and other metrics to compare the Company’s performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation, and for budgeting and planning purposes. The Company believes that the use of these non-GAAP financial measures and other metrics provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors.

Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Guidewire urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including the financial tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company’s business.

Über Guidewire

Guidewire bietet die Industrieplattform, auf die Schaden- und Unfallversicherer setzen, um in einer Zeit des immer schnelleren Wandels erfolgreich zu sein. Wir liefern unseren Kunden Software, Services und ein Partner-Ökosystem für Betrieb, Differenzierung und Wachstum ihres Unternehmens. Zum Ende unseres Geschäftsjahres 2019 zählten wir mehr als 380 Unternehmen in 34 Ländern zu unseren Kunden. Weitere Informationen finden Sie unter www.guidewire.de. Folgen Sie uns auch auf Twitter: @Guidewire_PandC.

Cautionary Language Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and future leadership announcements. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Guidewire’s control. Guidewire’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Guidewire’s most recent Forms 10-K and 10-Q filed with the Securities and Exchange Commission as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: quarterly and annual operating results may fluctuate more than expected; the impact of the COVID-19 pandemic on our employees and our business and the businesses of our customers, system integrator ("SI") partners, and vendors; seasonal and other variations related to our revenue recognition may cause significant fluctuations in our results of operations and cash flows; our reliance on sales to and renewals from a relatively small number of large customers for a substantial portion of our revenue; our ability to successfully manage any changes to our business model, including the transition of our products to cloud offerings and the costs related to cloud operations; our services revenue produces lower gross margins than our license and maintenance revenue; our products or cloud-based services may experience data security breaches; we face intense competition in our market; assertions by third parties that we violate their intellectual property rights could substantially harm our business; changes in accounting guidance, such as revenue recognition, which have and may cause us to experience greater volatility in our quarterly and annual results; our product development and sales cycles are lengthy and may be affected by factors outside of our control; weakened global economic conditions may adversely affect the P&C insurance industry including the rate of information technology spending; general political or destabilizing events, including war, conflict or acts of terrorism; our ability to sell our products is highly dependent on the quality of our professional services and SI partners; the risk of losing key employees; changes in foreign exchange rates; and other risks and uncertainties. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Guidewire’s views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. Guidewire undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Guidewire’s views as of any date subsequent to the date of this press release.

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

 

 

 

 

 

April 30,
2020

 

July 31,
2019

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

293,815

 

 

$

254,101

 

Short-term investments

740,386

 

 

870,136

 

Accounts receivable, net

79,587

 

 

138,443

 

Unbilled accounts receivable, net

68,913

 

 

36,728

 

Prepaid expenses and other current assets

41,598

 

 

35,566

 

Total current assets

1,224,299

 

 

1,334,974

 

Long-term investments

291,760

 

 

213,524

 

Unbilled accounts receivable, net

21,930

 

 

9,375

 

Property and equipment, net

65,461

 

 

65,809

 

Operating lease assets

85,902

 

 

 

Intangible assets, net

46,031

 

 

66,542

 

Goodwill

340,877

 

 

340,877

 

Deferred tax assets, net

100,925

 

 

90,308

 

Other assets

31,683

 

 

45,554

 

TOTAL ASSETS

$

2,208,868

 

 

$

2,166,963

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

18,348

 

 

$

34,255

 

Accrued employee compensation

47,493

 

 

73,365

 

Deferred revenue, net

89,087

 

 

108,304

 

Other current liabilities

21,789

 

 

16,348

 

Total current liabilities

176,717

 

 

232,272

 

Lease liabilities

99,110

 

 

 

Convertible senior notes, net

326,920

 

 

317,322

 

Deferred revenue, net

17,009

 

 

23,527

 

Other liabilities

3,099

 

 

19,641

 

Total liabilities

622,855

 

 

592,762

 

STOCKHOLDERS’ EQUITY:

 

 

 

Common stock

8

 

 

8

 

Additional paid-in capital

1,471,340

 

 

1,391,904

 

Accumulated other comprehensive income (loss)

(9,516)

 

 

(7,758)

 

Retained earnings

124,181

 

 

190,047

 

Total stockholders’ equity

1,586,013

 

 

1,574,201

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

2,208,868

 

 

$

2,166,963

 

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands except share and per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2020

 

2019

 

2020

 

2019

Revenue:

 

 

 

 

 

 

 

License and subscription

$

93,182

 

 

$

76,218

 

 

$

280,559

 

 

$

257,611

 

Maintenance

20,694

 

 

21,335

 

 

62,781

 

 

63,602

 

Services

54,289

 

 

65,314

 

 

155,293

 

 

190,443

 

Total revenue

168,165

 

 

162,867

 

 

498,633

 

 

511,656

 

Cost of revenue(1):

 

 

 

 

 

 

 

License and subscription

28,713

 

 

15,781

 

 

79,541

 

 

43,850

 

Maintenance

4,375

 

 

3,924

 

 

12,153

 

 

11,746

 

Services

52,664

 

 

60,573

 

 

158,510

 

 

185,970

 

Total cost of revenue

85,752

 

 

80,278

 

 

250,204

 

 

241,566

 

Gross profit:

 

 

 

 

 

 

 

License and subscription

64,469

 

 

60,437

 

 

201,018

 

 

213,761

 

Maintenance

16,319

 

 

17,411

 

 

50,628

 

 

51,856

 

Services

1,625

 

 

4,741

 

 

(3,217)

 

 

4,473

 

Total gross profit

82,413

 

 

82,589

 

 

248,429

 

 

270,090

 

Operating expenses(1):

 

 

 

 

 

 

 

Research and development

51,893

 

 

47,102

 

 

148,343

 

 

139,069

 

Sales and marketing

35,235

 

 

33,301

 

 

105,590

 

 

96,793

 

General and administrative

20,885

 

 

17,953

 

 

62,723

 

 

53,839

 

Total operating expenses

108,013

 

 

98,356

 

 

316,656

 

 

289,701

 

Income (loss) from operations

(25,600)

 

 

(15,767)

 

 

(68,227)

 

 

(19,611)

 

Interest income

6,072

 

 

7,748

 

 

20,666

 

 

22,152

 

Interest expense

(4,505)

 

 

(4,327)

 

 

(13,396)

 

 

(12,858)

 

Other income (expense), net

(12,356)

 

 

(617)

 

 

(12,789)

 

 

(958)

 

Income (loss) before provision for (benefit from) income taxes

(36,389)

 

 

(12,963)

 

 

(73,746)

 

 

(11,275)

 

Provision for (benefit from) income taxes

(5,351)

 

 

(4,382)

 

 

(7,773)

 

 

(9,002)

 

Net income (loss)

$

(31,038)

 

 

$

(8,581)

 

 

$

(65,973)

 

 

$

(2,273)

 

Net income (loss) per share:

 

 

 

 

 

 

 

Basic

$

(0.37)

 

 

$

(0.11)

 

 

$

(0.80)

 

 

$

(0.03)

 

Diluted

$

(0.37)

 

 

$

(0.11)

 

 

$

(0.80)

 

 

$

(0.03)

 

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

Basic

83,024,291

 

 

81,606,088

 

 

82,701,267

 

 

81,252,993

 

Diluted

83,024,291

 

 

81,606,088

 

 

82,701,267

 

 

81,252,993

 

(1)Amounts include stock-based compensation expense as follows:

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2020

 

2019

 

2020

 

2019

 

(unaudited, in thousands)

Stock-based compensation expense:

 

 

 

 

 

 

 

Cost of license and subscription revenue

$

1,694

 

 

$

589

 

 

$

4,674

 

 

$

1,458

 

Cost of maintenance revenue

469

 

 

274

 

 

1,376

 

 

1,366

 

Cost of services revenue

4,862

 

 

5,721

 

 

15,663

 

 

17,899

 

Research and development

6,500

 

 

4,919

 

 

19,349

 

 

17,765

 

Sales and marketing

4,990

 

 

4,731

 

 

16,143

 

 

14,426

 

General and administrative

6,266

 

 

4,816

 

 

18,870

 

 

15,843

 

Total stock-based compensation expense

$

24,781

 

 

$

21,050

 

 

$

76,075

 

 

$

68,757

 

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2020

 

2019

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income (loss)

$

(31,038)

 

 

$

(8,581)

 

 

$

(65,973)

 

 

$

(2,273)

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

10,611

 

 

9,699

 

 

32,255

 

 

29,140

 

Amortization of debt discount and issuance costs

3,244

 

 

3,069

 

 

9,598

 

 

9,082

 

Stock-based compensation

24,781

 

 

21,050

 

 

76,075

 

 

68,757

 

Charges to bad debt and revenue reserves

(688)

 

 

127

 

 

190

 

 

479

 

Deferred income tax

(6,685)

 

 

(5,074)

 

 

(11,046)

 

 

(11,836)

 

Accretion of discount on available-for-sale securities, net

(354)

 

 

(1,880)

 

 

(2,366)

 

 

(5,696)

 

Changes in fair value of strategic investment

10,672

 

 

 

 

10,672

 

 

 

Other non-cash items affecting net income (loss)

129

 

 

 

 

701

 

 

575

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

21,921

 

 

10,355

 

 

58,180

 

 

14,769

 

Unbilled accounts receivable

(27,722)

 

 

(13,668)

 

 

(44,740)

 

 

(43,858)

 

Prepaid expenses and other assets

(1,010)

 

 

(4,947)

 

 

(4,537)

 

 

(5,832)

 

Operating lease assets

2,618

 

 

 

 

7,111

 

 

 

Accounts payable

(1,648)

 

 

3,339

 

 

(5,680)

 

 

(11,136)

 

Accrued employee compensation

3,508

 

 

10,197

 

 

(25,286)

 

 

(5,065)

 

Deferred revenue

(2,152)

 

 

(2,149)

 

 

(25,735)

 

 

(29,639)

 

Lease liabilities

(2,875)

 

 

 

 

(2,634)

 

 

 

Other liabilities

1,259

 

 

4,674

 

 

(878)

 

 

5,785

 

Net cash provided by (used in) operating activities

4,571

 

 

26,211

 

 

5,907

 

 

13,252

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Purchases of available-for-sale securities

(247,909)

 

 

(315,109)

 

 

(849,312)

 

 

(778,011)

 

Sales and maturities of available-for-sale securities

328,210

 

 

316,519

 

 

904,959

 

 

727,102

 

Purchases of property and equipment

(7,712)

 

 

(17,740)

 

 

(18,966)

 

 

(28,746)

 

Capitalized software development costs

(1,063)

 

 

(1,139)

 

 

(3,273)

 

 

(2,302)

 

Net cash provided by (used in) investing activities

71,526

 

 

(17,469)

 

 

33,408

 

 

(81,957)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds from issuance of common stock upon exercise of stock options

1,838

 

 

748

 

 

3,077

 

 

1,851

 

Net cash provided by (used in) financing activities

1,838

 

 

748

 

 

3,077

 

 

1,851

 

Effect of foreign exchange rate changes on cash and cash equivalents

(2,583)

 

 

(790)

 

 

(2,678)

 

 

(1,417)

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

75,352

 

 

8,700

 

 

39,714

 

 

(68,271)

 

CASH AND CASH EQUIVALENTS—Beginning of period

218,463

 

 

360,169

 

 

254,101

 

 

437,140

 

CASH AND CASH EQUIVALENTS—End of period

$

293,815

 

 

$

368,869

 

 

$

293,815

 

 

$

368,869

 

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited, in thousands)

 

 

 

 

 

 

 

 

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below:

       

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2020

 

2019

 

2020

 

2019

Gross profit reconciliation:

 

 

 

 

 

 

 

GAAP gross profit

$

82,413

 

 

$

82,589

 

 

$

248,429

 

 

$

270,090

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

7,025

 

 

6,584

 

 

21,713

 

 

20,723

 

Amortization of intangibles

4,805

 

 

4,945

 

 

14,695

 

 

14,835

 

Non-GAAP gross profit

$

94,243

 

 

$

94,118

 

 

$

284,837

 

 

$

305,648

 

 

 

 

 

 

 

 

 

Income (loss) from operations reconciliation:

 

 

 

 

 

 

 

GAAP income (loss) from operations

$

(25,600)

 

 

$

(15,767)

 

 

$

(68,227)

 

 

$

(19,611)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

24,781

 

 

21,050

 

 

76,075

 

 

68,757

 

Amortization of intangibles

6,602

 

 

7,278

 

 

20,511

 

 

21,896

 

Non-GAAP income (loss) from operations

$

5,783

 

 

$

12,561

 

 

$

28,359

 

 

$

71,042

 

 

 

 

 

 

 

 

 

Net income (loss) reconciliation:

 

 

 

 

 

 

 

GAAP net income (loss)

$

(31,038)

 

 

$

(8,581)

 

 

$

(65,973)

 

 

$

(2,273)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

24,781

 

 

21,050

 

 

76,075

 

 

68,757

 

Amortization of intangibles

6,602

 

 

7,278

 

 

20,511

 

 

21,896

 

Amortization of debt discount and issuance costs

3,244

 

 

3,070

 

 

9,598

 

 

9,083

 

Changes in fair value of strategic investment (1)

10,672

 

 

 

 

10,672

 

 

 

Tax impact of non-GAAP adjustments (2)

(6,559)

 

 

(7,586)

 

 

(14,645)

 

 

(23,860)

 

Non-GAAP net income (loss)

$

7,702

 

 

$

15,231

 

 

$

36,238

 

 

$

73,603

 

 

 

 

 

 

 

 

 

Tax provision (benefit) reconciliation:

 

 

 

 

 

 

 

GAAP tax provision (benefit)

$

(5,351)

 

 

$

(4,382)

 

 

$

(7,773)

 

 

$

(9,002)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

3,295

 

 

3,676

 

 

11,824

 

 

11,578

 

Amortization of intangibles

878

 

 

1,271

 

 

3,197

 

 

3,694

 

Amortization of debt discount and issuance costs

431

 

 

536

 

 

1,489

 

 

1,540

 

Changes in fair value of strategic investment (1)

1,418

 

 

 

 

1,418

 

 

 

Tax impact of non-GAAP adjustments (2)

537

 

 

2,103

 

 

(3,283)

 

 

7,048

 

Non-GAAP tax provision (benefit)

$

1,208

 

 

$

3,204

 

 

$

6,872

 

 

$

14,858

 

(1) Effective the third fiscal quarter of 2020, changes in fair value of strategic investments are excluded from the non-GAAP measures. Prior to the third fiscal quarter of 2020, there have been no changes in fair value of strategic investments in any periods presented.
(2) Adjustments reflect the tax benefit (provision) resulting from all non-GAAP adjustments.

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited, in thousands except per share amounts)

 

 

 

 

 

 

 

 

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below:

       

 

Three Months Ended April 30,

 

Nine Months Ended April 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

Net income (loss) per share reconciliation:

 

 

 

 

 

 

 

GAAP net income (loss) per share — diluted

$

(0.37)

 

 

$

(0.11)

 

 

$

(0.80)

 

 

$

(0.03)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation

0.30

 

 

0.26

 

 

0.92

 

 

0.84

 

Amortization of intangibles

0.08

 

 

0.09

 

 

0.25

 

 

0.27

 

Amortization of debt discount and issuance costs

0.04

 

 

0.04

 

 

0.12

 

 

0.12

 

Changes in fair value of strategic investment (1)

0.13

 

 

 

 

0.13

 

 

 

Tax impact of non-GAAP adjustments (2)

(0.08)

 

 

(0.09)

 

 

(0.18)

 

 

(0.30)

 

Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation (3)

(0.01)

 

 

(0.01)

 

 

(0.02)

 

 

(0.01)

 

Non-GAAP net income (loss) per share — diluted

$

0.09

 

 

$

0.18

 

 

$

0.42

 

 

$

0.89

 

 

 

 

 

 

 

 

 

Shares used in computing Non-GAAP income (loss) per share amounts:

 

 

 

 

 

 

 

GAAP weighted average shares — diluted

83,024,291

 

 

81,606,088

 

 

82,701,267

 

 

81,252,993

 

Non-GAAP dilutive shares excluded from GAAP income (loss) per share calculation (3)

486,398

 

 

1,031,086

 

 

798,189

 

 

1,245,769

 

Pro forma weighted average shares — diluted

83,510,689

 

 

82,637,174

 

 

83,499,456

 

 

82,498,762

 

(1) Effective the third fiscal quarter of 2020, changes in fair value of strategic investments are excluded from the non-GAAP measures. Prior to the third fiscal quarter of 2020, there have been no changes in fair value of strategic investments in any periods presented.
(2) Adjustments reflect the impact on the tax benefit (provision) resulting from all non-GAAP adjustments.
(3) Due to the occurrence of a net loss on a GAAP basis, potentially dilutive securities were excluded from the calculation of GAAP net income (loss) per share, as they would have an anti-dilutive effect. However, these shares have a dilutive effect on non-GAAP net income (loss) per share and, therefore, are included in the non-GAAP net income (loss) per share calculation.

 

Nine Months Ended April 30,

 

2020

 

2019

Free cash flow:

 

 

 

Net cash provided by (used in) operating activities

$

5,907

 

 

$

13,252

 

Purchases of property and equipment

(18,966)

 

 

(28,746)

 

Capitalized software development costs

(3,273)

 

 

(2,302)

 

Free cash flow

$

(16,332)

 

 

$

(17,796)

 

GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Outlook

The following tables reconcile the specific items excluded from GAAP outlook in the calculation of non-GAAP outlook for the periods indicated below:

         

(in $ millions)

 

Fourth Quarter
Fiscal Year 2020

 

Fiscal Year 2020

Income (loss) from operations outlook reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income (loss) from operations

 

4.2

 

-

 

12.2

 

(64.8)

 

-

 

(56.8)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

24.0

 

-

 

26.0

 

99.6

 

-

 

101.6

Amortization of intangibles

 

7.4

 

-

 

7.4

 

29.1

 

-

 

29.1

Non-GAAP income (loss) from operations

 

36.7

 

-

 

44.7

 

65.0

 

-

 

73.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) outlook reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

(2.4)

 

-

 

(5.6)

 

(70.9)

 

-

 

(63.2)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

24.0

 

-

 

26.0

 

99.6

 

-

 

101.6

Amortization of intangibles

 

7.4

 

-

 

7.4

 

29.1

 

-

 

29.1

Amortization of debt discount and issuance costs

 

3.1

 

-

 

3.1

 

12.7

 

-

 

12.7

Change in fair value of strategic investment

 

 

-

 

 

10.7

 

-

 

10.7

Tax impact of non-GAAP adjustments

 

0.6

 

-

 

10.3

 

(12.3)

 

-

 

(13.3)

Non-GAAP net income (loss)

 

33.8

 

-

 

40.3

 

70.0

 

-

 

76.7

 

Media:

Diana StottGuidewire Software, Inc.
(650) 356-4941
dstott [at] guidewire.com

Investors:

Garo ToomajanianICR, LLC
(650) 357-5282
ir [at] guidewire.com