Slide 1: Analyst Day
Analyst Day © Guidewire Software, Inc. All rights reserved. Do not distribute without permission.
Slide 2: Safe Harbor
Safe Harbor This presentation is for informational purposes only and is not an offer to sell securities or a solicitation of an offer to buy any securities, and may not be relied upon in connection with the purchase or sale of any security. This presentation is proprietary and is intended solely for
Slide 3: Agenda
Agenda Time Topic Speaker 1:00−2:00 Company Update and Mike Rosenbaum, CEO Vision 2:00−2:30 Product Strategy Diego Devalle, Global Head of Engineering and Products 2:30−3:00 Discussion: Partner Shane Cassidy, EVP, Head of Insurance, Capgemini Perspective Christina Colby, GVP, Cloud Customer Experien
Slide 4: Company Update & Vision
Company Update & Vision Mike Rosenbaum, CEO September 26, 2019
Slide 5: Our chosen domain: the global P&C insurance industry
Our chosen domain: the global P&C insurance industry
Slide 6: P&C Insurance Market Overview
P&C Insurance Market Overview ~1,500 insurers Tier 1 50+ >$5B Americas EMEA APAC Tier 2 250+ $1,042B $742B $590B $1B to <$5B Global Tier 3/4/5 ~1,200 $2.4T DWP <$1B in DWP Source: SwissRe Institute “Sigma, No 3/2019”; P&C insurance includes workers compensation, medical insurance and accident & heal
Slide 7: Insurance is Everywhere
Insurance is Everywhere Personal Lines Commercial Lines Automotive Residential Travel Mortgage Property Fleet Environmental General Liability Business Interruption Earthquake Pet Watercraft Personal Injury Ocean Marine Workers Comp Crime Inland Marine Surety Recreational Vehicle Unemployment Profess
Slide 8: To deliver the industry platform that P&C insurers rely upon
To deliver the industry platform that P&C insurers rely upon to adapt and succeed in a time of accelerating change and to ensure that every customer succeeds in the journey. © Guidewire Software, Inc. All rights reserved. Do not distribute without permission.
Slide 9: Guidewire InsurancePlatform
•Guidewire InsurancePlatform TM Software Services Ecosystem
Slide 10: Lower TCO and Complexity, Smarter Decisions, Increase Agility
Lower TCO and Complexity Make Smarter, Faster Decisions Increase Agility © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 9
Slide 11: Lower TCO & Complexity
Lower TCO & Complexity
Slide 12: Guidewire Cloud
Guidewire Cloud
Slide 13: Guidewire InsurancePlatform
Guidewire InsurancePlatform™ OMNI-CHANNEL CUSTOMER, AGENT, AND EMPLOYEE EXPERIENCES IMPLEMENTATION ECOSYSTEM APPLICATIONS & OPERATIONS Underwriting Digital Guidewire for Data Mgmt. Cyence Risk PolicyCenter ClaimCenter BillingCenter Management Salesforce & Analytics Analytics Systems Integrator & Con
Slide 14: Cloud Centralizes Infrastructure & Operations Expense
Cloud Centralizes Infrastructure & Operations Expense Self-Managed Guidewire Cloud Customer 1 Customer 2 Customer 3 Customer n Customer 1 Customer 2 Customer 3 Customer n GUIDEWIRE CLOUD SERVICES CLOUD INFRASTRUCTURE (AWS) Digital Channel Configuration Application Configuration Infrastructure and Op
Slide 15: Evolution of Guidewire Cloud Services Improves Efficiency
Evolution of Guidewire Cloud Services Improves Efficiency Guidewire Cloud Customer 1 Customer 2 Customer 3 Customer n • Centralize per customer activities • Scalable platform built on kubernetes • Single control plane for more efficient support and observability • Single delivery model for faster, m
Slide 16: Cloud isn't a different product, it's a deployment option
Cloud isn't a different product, it's a deployment option Self-Managed Guidewire Cloud • We believe Guidewire Cloud is the optimal way to achieve value • Essential to meet commitments to new and existing Self-Managed customers • Customers decide whether and when to transition © Guidewire Software, I
Slide 17: InsuranceSuite Cloud Evolution
InsuranceSuite Cloud Evolution Guidewire Cloud New Products InsuranceSuite Current state GUIDEWIRE CLOUD SERVICES InsuranceSuite Self-Managed CLOUD INFRASTRUCTURE (AWS) InsuranceSuite © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 16
Slide 18: New Customers Selected Guidewire Cloud
4 New Customers Selected Guidewire Cloud Silicon Valley- Based Insurtech • $22B DWP • $8.9B DWP • $330M DWP Canadian • Start-up subsidiary of insurer Tier 1 insurer • Serves US military and • In 19 mid-west, and their families west states • Personal and • Behavior-based commercial lines premium mode
Slide 19: Existing Customers Selected Guidewire Cloud
9 Existing Customers Selected Guidewire Cloud Tier 1 Insurer • $22B DWP • $8.9B DWP • $3.8B DWP • $3.7B DWP French insurer • Personal and • In 19 mid-west, and • Commercial, personal, commercial lines west states workers comp lines • Personal and commercial lines • Replacement of legacy • Personal a
Slide 20: Existing Customers Selected Guidewire Cloud (cont.)
N 9 Existing Customers Selected Guidewire Cloud (cont.) • $3B DWP • $2.9B DWP • $2.9B DWP • $2.4B DWP • $550M DWP Australian insurer Canadian insurer Canadian insurer • Personal lines • Commercial, • Workers comp • Personal lines • Personal and personal, and commercial lines • Cloud transition worke
Slide 21: Scaling SI Partner Ecosystem
Scaling SI Partner Ecosystem # of Guidewire-trained consultants at SI partners 9,000 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Partners Engaged for Guidewire Cloud and Self-Managed Deployments Note: Guidewire analysis: tracks total number of consultants who have gone through Guidewire t
Slide 22: Make Smarter, Faster Decisions
Make Smarter, Faster Decisions
Slide 23: Data and Analytics Opportunity
Data and Analytics Opportunity Customer Challenges Requirements • Over-abundance of data sources • Advanced data listening, ML/AI • New risks to intermediate • P&C models • Data science needed to • Targeted business applications automate high-volume decisions • Cloud elasticity and scale © Guidewire
Slide 24: Guidewire Data Platform
InsuranceSuite InsuranceNow Legacy system Public Open source Proprietary Social Third party Internal Data Sources / Core System Data External Data Sources / Non-Obvious Data Repository P&C AI / ML expertise BI Matching / Curation / Organizing Guidewire Data Platform Modeling Cyence for Cyber Cyence
Slide 25: Cyence Sourced Data Fundamentally Improves Risk Analysis
Cyence Sourced Data Fundamentally Improves Risk Analysis Conventional Cyence Bob’s Thompson Bob’s Thompson Hardware Tools Hardware Tools Revenue $2M $2.2M Services assembly, installation small engine repair, glass repair Employees 20 18 Products garden supplies, paint, power tools; large % off-prem
Slide 26: Cyence Data Listening Engine
Cyence Data Listening Engine COLLECT DATA AT CURATE AND MAKE SENSE LEVERAGE NON-OBVIOUS INTERNET SCALE OF THE DATA DATA AND INSIGHTS Network Structure Natural Language Processing Control Systems (ICS) Demographics Crime Rate Underwriting Connected Service Providers Web / Network Volume Lines of Busi
Slide 27: Winning in Our Market
Winning in Our Market
Slide 28: 19% Revenue CAGR since 2010
19% Revenue CAGR since 2010 ($ in millions) $719 $653 249 Services $510 267 $424 174 85 $381 Maintenance $350 145 77 $301 151 69 156 $232 60 140 50 License & $172 385 $145 105 42 309 Subscription 77 38 267 66 30 220 21 152 179 19 124 74 97 60 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 © Guide
Slide 29: 24% ARR CAGR since 2010
24% ARR CAGR since 2010 ($ in millions) $460 $412 $3441 $268 ARR $219 $182 Four Quarter $150 Recurring Revenue $104 $82 $67 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Note: Four Quarter Recurring Revenue was defined as last four quarters of Term License and Maintenance revenue and was a proxy
Slide 30: Historic Growth Driven by Success Across Tiers
Historic Growth Driven by Success Across Tiers DWP FY19 P&C Insurance Industry Tier 1: >$5B 50+ 34 Tier 2: $1B to <$5B 99 250+ Tier 3: $300M to <$1B 103 ~1,200 Tier 4/5: <$300M 144 Particularly Successful in Tier 1 & Tier 2 Segments Note: Guidewire analysis; Customers may include non-P&C Insurers an
Slide 31: Majority of Core DWP Opportunity Remains Untapped
Majority of Core DWP Opportunity Remains Untapped Tier 1: >$5B DWP Tier 2: >$1B to <$5 DWP Tier3/4/5: <$1B DWP Guidewire Guidewire Guidewire 100% = $1,087 billion 100% = $714 billion 100% = $599 billion DWP Penetration by Tier Source: SwissRe Institute “Sigma, No 3/2019”; Guidewire Analysis © Guidew
Slide 32: Majority of Core DWP Opportunity Remains Untapped
Majority of Core DWP Opportunity Remains Untapped Core DWP - Americas Core DWP - EMEA Core DWP - APAC Guidewire Guidewire Guidewire Opportunity 100% = $1,042 billion 100% = $742 billion 100% = $590 billion DWP Penetration by Region © Guidewire Software, Inc. All rights reserved. Do not distribute wi
Slide 33: Significant Core DWP and Total Product Potential
Significant Core DWP and Total Product Potential Market DWP Penetration Market ARR Penetration Cloud Self Managed Unpenetrated Cloud Self Managed Unpenetrated Tier 1 Tier 1 Tier 2 Tier 2 Tier 3 Tier 3 Tier 4/5 Tier 4/5 0 200 400 600 800 1,000 1,200 0 500 1,000 1,500 2,000 2,500 3,000 $ in Billions $
Slide 34: Illustrative Customer Expansion & Cloud Migration
Illustrative Customer Expansion & Cloud Migration Fully Ramped ~2.5x uplift ~10x Cloud ARR ~4x ~2.5x Self Managed ARR ~1x Yr00 Yr18 Note: Guidewire illustrative case study © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 33
Slide 35: Win-Loss Analysis for FY19 Core System Decisions
Win-Loss Analysis for FY19 Core System Decisions 100% = Total Number of Decisions 100% = Total Amount of DWP Undisclosed Guidewire Guidewire Guidewire Guidewire Guidewire Guidewire Guidewire Undisclosed Won Majority of DWP Contested in FY19 Source: Guidewire analysis; Includes DWP for new core syste
Slide 36: Guidewire InsuranceSuite Rated as Leader by Gartner
Guidewire InsuranceSuite Rated as Leader by Gartner InsuranceSuite named Leader in Gartner Magic Quadrant for 5th successive year InsuranceNow positioned in Challenger quadrant Source: Gartner Magic Quadrant for P&C Core Insurance Platforms, North America, Sham Gill, James Ingham, September 10, 2019
Slide 37: Growth in InsurTech Provides Opportunities
Growth in InsurTech Provides Opportunities Digital Attackers Process Optimizers © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 36
Slide 38: Priorities for Next 12 Months
Priorities for Next 12 Months Cloud Efficiency Operational Execution Product Innovation © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 37
Slide 39: Analyst Day
Analyst Day © Guidewire Software, Inc. All rights reserved. Do not distribute without permission.
Slide 40: Platform & Products Update
Platform & Products Update Diego Devalle, Global Head of Products & Engineering September 26, 2019
Slide 41: Diego Devalle
Diego Devalle SVP & Global Head of Products & Engineering BACKGROUND • Joined Guidewire in March 2018 • 25+ years of enterprise software products & engineering experience • Senior executive roles at SAP, Mindjet & Monitise (acquired by Fiserv) • Assumed PD executive leadership responsibility in Dece
Slide 42: Guidewire R&D Profile
Guidewire R&D Profile FY 2018 FY 2019 $146M1 $165M1 Toronto Kraków Dublin R&D Spend R&D Spend 45% 25% Northeast 30% 35% Bay Southeast Area Self-Managed Guidewire Cloud Chennai Self-Managed Guidewire Cloud 10% 20% 10% 25% Digital Data & Analytics Digital Data & Analytics Note1: R&D Spend is Non-GAAP
Slide 43: Cloud Transformation Strategy
Cloud Transformation Strategy Leverage Transition Proven Platform When Ready • Based on proven InsuranceSuite platform • Modularize InsuranceSuite core via APIs • Extend with new cloud-native functionality • Business-friendly, codeless configuration • Metadata-driven digital experiences • Infused an
Slide 44: FY 2018 R&D Priorities
FY 2018 R&D Priorities FY 2018 $146M1 Enabling Platform Transformation R&D Spend API/SDK Integration Strategy 45% 25% Cloud Infrastructure Services Self-Managed Guidewire Cloud 10% 20% Policy Product Innovation Digital Data & Analytics Note1: R&D Spend is Non-GAAP © Guidewire Software, Inc. All righ
Slide 45: FY 2019 R&D Priorities
FY 2019 R&D Priorities FY 2019 Scaling Cloud Business $165M1 API/SDK Integration Strategy R&D Spend 30% 35% Cloud Infrastructure Services Self-Managed Guidewire Cloud Policy Product Innovation 10% 25% Digital Data & Analytics Note1: R&D Spend is Non-GAAP © Guidewire Software, Inc. All rights reserve
Slide 46: Cloud API/SDK Integration Strategy
Cloud API/SDK Integration Strategy Ecosystem Enablement Country Integrations New Cloud Products Guidewire Marketplace Vendor Public Add-ons Services Private Add-ons Developer Experience Claims Policy Other EMEA Integration SDKs SDKs SDKs SDKs Increase coverage REST APIs SDKs InsuranceSuite CORE © Gu
Slide 47: Cloud Infrastructure Services
Cloud Infrastructure Services Guidewire Cloud New Products InsuranceSuite Current state GUIDEWIRE CLOUD SERVICES InsuranceSuite Self-Managed CLOUD INFRASTRUCTURE (AWS) InsuranceSuite © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 47
Slide 48: New Product Innovation
New Product Innovation Address Lookup Property Info eSignature Payment 3rd Party Integrations Submission Risk Analysis Price Offer Bind Issue Service Financials Web Business Personalization Analytics Rules Service Service Service Cloud Services Risk Rating Analytics Service Service ALE RTS | AUDITIN
Slide 49: Increase Agility
Ce Increase Agility
Slide 50: Cloud Platform Architecture
Cloud Platform Architecture OMNI-CHANNEL CUSTOMER, AGENT, AND EMPLOYEE EXPERIENCES IMPLEMENTATION ECOSYSTEM APPLICATIONS & OPERATIONS Underwriting Digital Guidewire for Data Mgmt. Cyence Risk PolicyCenter ClaimCenter BillingCenter Management Salesforce & Analytics Analytics Systems Integrator & Cons
Slide 51: Agile Product Definition & Delivery
Agile Product Definition & Delivery Advanced PolicyCenter Rating Rules Engagement Digital Analytics Product Designer Application Definition Workspace Manager Experience Dashboard Rating Business Rules Personalization Data & Analytics Service Engine Service Services © Guidewire Software, Inc. All rig
Slide 52: Advanced Product Designer – Digital Experience
Advanced Product Designer – Digital Experience Auto-Generated Digital UI Auto-Generated Digital UI © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 52
Slide 53: Agile Product Definition & Delivery
Agile Product Definition & Delivery KEY HIGHLIGHTS: Advanced Product Designer • Rapid product launch & refinement PolicyCenter Application Rating Definition Rules Workspace Engagement Manager Digital Experience Analytics Dashboard • From design to full-scale production • Infused analytics for real-t
Slide 54: Analyst Day
Analyst Day © Guidewire Software, Inc. All rights reserved. Do not distribute without permission.
Slide 55: Discussion: Partner Perspective
Discussion: Partner Perspective Shane Cassidy, EVP, Head of Insurance, Capgemini Christina Colby, GVP, Cloud Customer Experience, Guidewire September 26, 2019
Slide 56: Analyst Day
Analyst Day © Guidewire Software, Inc. All rights reserved. Do not distribute without permission.
Slide 57: Customer Panel
Customer Panel September 26, 2019 Moderator: Nicole Bruns, Director Product Marketing
Slide 58: Gina Schwitzgebel, CEO and GM, NCJUA, NCIUA
Gina Schwitzgebel, CEO and GM, NCJUA, NCIUA $436M DWP Region: North America (US) Line of Business: Personal; Commercial Distribution Channel: Direct; January 2018 Independent Agents Release 1 Go Live © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 58
Slide 59: Roby Shay, VP of Enterprise Solutions and CIO, Grinnell
Roby Shay, VP of Enterprise Solutions and CIO, Grinnell $700M DWP Region: North America (US) Line of Business: Personal; Commercial; Reinsurance Distribution Channel: Independent Feb 2019 Release 1 Go Live © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 59
Slide 60: Peter Moreau, SVP and CIO, Amica
Peter Moreau, SVP and CIO, Amica $2.4B DWP Region: North America (US) Line of Business: Personal Distribution Channel: Direct April 2019 Began Guidewire Cloud Implementation © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 60
Slide 61: Analyst Day
Analyst Day © Guidewire Software, Inc. All rights reserved. Do not distribute without permission.
Slide 62: Financial Update
Financial Update Curtis Smith, CFO September 26, 2019
Slide 63: Framing Fiscal Year 2020 and Beyond
Framing Fiscal Year 2020 and Beyond Key Metrics Update • Update on Transition and Go-Forward Growth Metrics • Increasing Cloud demand impacting reported revenue Cloud Driving Business Model • Cloud investments combined with more ratable revenue impacting Changes near-term margins • Partner enablemen
Slide 64: Key Metrics Update
Key Metrics Update
Slide 65: Key Growth Metrics
Key Growth Metrics • Subscription New Sales as a % of Total New Sales: 55 to 75% in FY20 ‒ Total New Sales: internal measure of average annual value of contract over 5- years; perpetual license values adjusted to equivalize to an annualized amount Transition Metrics • Fully Ramped ARR: Growing faste
Slide 66: Annual Recurring Revenue
Annual Recurring Revenue ARR • ARR: annualized recurring value at period end for active: ($ in Millions) $524-$534 14-16%1 ‒ Term Licenses $460 13%1 ‒ Subscription Agreements $412 ‒ Maintenance Contracts ‒ Hosting Contracts • Excludes perpetual licenses and professional services • Multi-year term co
Slide 67: Fully Ramped ARR
Fully Ramped ARR • Annualized value of recurring revenue at year five for ramped contracts • Ramped pricing agreed to with customers and based off pricing schedule outlined in contract • Pricing schedule may extend beyond the committed contract period • Pricing schedule time-based and not milestone
Slide 68: Cloud Driving Business Model Changes
Cloud Driving Business Model Changes
Slide 69: Cloud Shift to Subscription
Cloud Shift to Subscription New Sales Mix (FY12 – FY20E) Perpetual Subscription Term FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E Source: Guidewire analysis © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 69
Slide 70: Mix Shift in New Subscription Sales Impact on Revenue
Mix Shift in New Subscription Sales Impact on Revenue Subscription Mix Impact on L&S Revenue Perpetual • Based on the 55%-75% outlook range for FY201 • Mix in Subscription % of New Sales has impact Subscription 55% in same year L&S revenue 65% 75% ‒ 1% increase in subscription mix estimated to have
Slide 71: Cloud Impacts on License & Subscription Margin
NON-GAAP Cloud Impacts on License & Subscription Margin Subscription % of License & Subscription Revenue License & Subscription Gross Margin 1 95% 24% 89% 1 78% 17% 9% FY18 FY19 FY20E FY18 FY19 FY20E Note1: Based on the outlook provided on FY19 Q4 Earnings Call © Guidewire Software, Inc. All rights
Slide 72: Levers to Reduce Cloud COGS
Levers to Reduce Cloud COGS Illustrative View of Cloud COGS per Customer • Drive standardization (contract, implementation) and conformance Software/ Infrastructure • Maximize cost and compute resource efficiency ‒ Adopt common Guidewire Cloud infrastructure in the short term ‒ Adopt SaaS native sof
Slide 73: Cloud Impacts on Services
Cloud Impacts on Services Services as % of Total Revenue (FY13 – FY20E) 46% 45% ------------------Cloud Era -------------------- 40% 40% 34% 34% 35% 30%1 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY20E Lower on Greater SI Involvement Note1: Based on midpoint of outlook provided on FY19 Q4 Earnings Ca
Slide 74: Modeling Revenue
Modeling Revenue
Slide 75: Modeling Revenue: New Term Deal
Illustrative Modeling Revenue: New Term Deal Deal Terms ARR Committed Contract Period Committed Pricing • Term Deal ($ in millions) ‒ Standard 2+1 contract 3.5 3.5 ‒ Ramped pricing 2.0 ‒ 5 Year committed pricing 1.5 1.0 ‒ Executed mid-year Yr1 Yr2 Yr3 Yr4 Yr5 Fully Ramped ARR Revenue License Revenue
Slide 76: Modeling Revenue: New Cloud Deal
Illustrative Modeling Revenue: New Cloud Deal Deal Terms ARR Committed Contract Period Committed Pricing • New Cloud Deal ($ in millions) ‒ 3-year contract 3.5 3.5 ‒ Ramped pricing 2.0 ‒ 5-year committed pricing 1.5 1.0 ‒ Executed / provisioned mid-year Yr1 Yr2 Yr3 Yr4 Yr5 Fully Ramped ARR Revenue S
Slide 77: Long-Term Model Discussion
Long-Term Model Discussion
Slide 78: FY20 Outlook
NON-GAAP FY20 Outlook FY17A FY18A FY18A FY19A FY19E FY20E ARR $412M $460M $529M1 • ARR % Subscription of New Sales 36% 65% 55-75% ‒ Expect ARR growth to accelerate off FY19 low point Subscription % of License & 11% 17% 24%2 • Revenue Subscription Revenue Services % of Total Revenue 41% 35% 30%2 ‒ Su
Slide 79: Long-Term Model Commentary - Growth
Long-Term Model Commentary - Growth • Cloud demand higher than previously expected driving subscription revenue growth New • Cloud deals driving subscription mix of new sales above 80% by FY23 Sales/ARR • Overall software revenue growing faster than prior plan • ARR growth ~20% by FY22 • Partners le
Slide 80: Long-Term Model Commentary - Profitability
NON-GAAP Long-Term Model Commentary - Profitability • Investments required near term to support Cloud demand Gross Margin • Lower software margins vs prior FY23 expectations • Longer term 65%+ subscription margins still expected • Drive standardization (contract, implementation) and conformance Clou
Slide 81: Long-Term Model Update
NON-GAAP Long-Term Model Update FY18A FY19A FY19E FY20E FY19E FY23E • 19% CAGR; 20%+ in FY23 ARR $460M $529M1 $930M % Subscription of New Sales 65% 55-75% 81-83% • Increased from 80% Subscription % of License & 17% 24%2 57-59% • Higher due to Cloud demand Subscription Revenue Services % of Total Rev
Slide 82: Analyst Day
Analyst Day © Guidewire Software, Inc. All rights reserved. Do not distribute without permission.
Slide 83: Appendix
Appendix
Slide 84: Modeling Revenue: Cloud Migration Deal
Illustrative Modeling Revenue: Cloud Migration Deal Deal Terms ARR New ARR Existing ARR Committed Contract Period • Migration Cloud Deal ($ in millions) ‒ Existing Self-Managed customer paying $2.5M per year 3.5 3.5 ‒ 5-year migration contract 1.5 2.0 1.0 ‒ 5-year committed pricing ‒ Executed / prov
Slide 85: Cloud Migrations – Timing of Revenue Recognition
Illustrative Cloud Migrations – Timing of Revenue Recognition Migration deal combined with renewal date Migration deal after renewal date • Mid-year deal executed in conjunction with mid-year renewal • Mid-year deal executed after Q1 renewal occurred • Term license revenue recognized with new cloud
Slide 86: Q1 & Full Year FY20 Guidance
NON-GAAP Q1 & Full Year FY20 Guidance ($ in Millions) FY20 Q1 FY20 Revenue License & Other 78.0 – 80.0 443.0 – 455.0 Maintenance 19.0 – 20.0 85.0 – 87.0 Services 51.0 – 54.0 224.0 – 236.0 TOTAL REVENUE 149.0 – 153.0 759.0 – 771.0 Gross Margin 58% - 59% Non-GAAP operating income (loss) (3.0) – 1.0 96
Slide 87: Reconciliation of Non-GAAP Operating Income
Reconciliation of Non-GAAP Operating Income $ in Millions FY 20 Q1(E) FY 20(E) Income (loss) from operations (33.8) - (29.8) (41.4) - (29.4) Non-GAAP adjustments: Total stock-based 22.4 - 24.4 103.3 - 113.3 compensation Amortization of intangible 7.3 - 7.3 29.1 - 29.1 assets Non-GAAP operating (loss
Slide 88: Reconciliation of Non-GAAP License & Subscription Gross Margin
Reconciliation of Non-GAAP License & Subscription Gross Margin $ in Millions FY 18(A) FY 19(A) FY 20(E) GAAP License & Subscription Gross Margin 89% 83% 75% Non-GAAP adjustments: Total stock-based compensation 0% 1% 0% Amortization of intangible assets 6% 5% 2% Non-GAAP License & Subscription Gross
Slide 89: Reconciliation of Non-GAAP Margins
Reconciliation of Non-GAAP Margins Stock-based Amortization of As % of Revenue GAAP Compensation Intangible Assets Non- GAAP FY2018 Gross Margin 55% 4% 3% 61% R&D as % of Rev 26% (4%) -- 22% S&M as % of Rev 19% (3%) (1%) 15% G&A as % of Rev 12% (3%) -- 8% Operating Margin (2%) 14% 4% 16% FY2019 Gros
Slide 90: GAAP to NonGAAP Reconciliation
GAAP to NonGAAP Reconciliation © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 90
Slide 91: GAAP to NonGAAP Reconciliation
GAAP to NonGAAP Reconciliation © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 91
Slide 92: GAAP to NonGAAP Reconciliation
GAAP to NonGAAP Reconciliation © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 92
Slide 93: GAAP to NonGAAP Reconciliation
GAAP to NonGAAP Reconciliation © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 93
Slide 94: GAAP to NonGAAP Reconciliation
GAAP to NonGAAP Reconciliation © Guidewire Software, Inc. All rights reserved. Do not distribute without permission. Page 94