Guidewire Software (NYSE: GWRE), which makes core software for property and casualty insurers, beat Wall Street’s estimates for its fourth quarter of fiscal 2026, but shares reportedly fell around 15% in early Friday trading as investors focused on cautious guidance for the year ahead.
The stock had closed Thursday’s session at $202.86, having climbed as much as around 38% over the prior month — a run that left it closer to its 52-week high of $264.13 than its low of $102.30 heading into the print.
Quarterly revenue rose to $411.09m, from $356.57m a year earlier, beating consensus of roughly $402.2m to $402.8m. Non-GAAP earnings per share came in at $0.99, ahead of the $0.94 expected and up from $0.84 a year earlier. But chief financial officer Jeffrey Cooper told investors that the fiscal 2027 outlook “assumes ARR attrition normalizes relative to fiscal 2026,” after what he called the company’s “record low attrition rate” in the year just ended.
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Annual recurring revenue — the subscription income Guidewire expects to keep collecting — ended fiscal 2026 at $1.242bn, up 19% year on year. Guidewire guided fiscal 2027 ARR to $1.45bn-$1.46bn, but its first-quarter guidance of $1.253bn-$1.259bn implies only modest sequential growth from that $1.242bn base. Analysts including Baird’s Joseph Vruwink and RBC’s Rishi Jaluria pressed management on the call over why fully ramped ARR does not point to faster near-term growth.
The reaction underlines that for a stock trading well above its year-ago levels, beating trailing revenue and earnings estimates was not enough once management signalled that the unusually low churn behind fiscal 2026’s growth is expected to fade.
