Guidewire Announces Third Quarter Fiscal Year 2026 Financial Results

About this update from Guidewire Software, Inc.

Guidewire (NYSE: GWRE) today announced its financial results for the fiscal quarter ended April 30, 2026. “Third-quarter results reinforce our confidence in the strength and continuing momentum of our business, and set us up well for what should be a record fourth quarter,” said Mike Rosenbaum, chief executive officer, Guidewire. “It’s clear that our strategy and market position are resonating with insurers as they focus on modernizing core systems, migrating critical business functions to our cloud platform solutions, and adopting AI across our applications.” “We are raising our fiscal year outlook for revenue, operating income, and cash flow based on better than expected Q3 results and greater visibility as opportunities progress through our pipeline,” said Jeff Cooper, chief financial officer, Guidewire. “ARR grew 19% in Q3 and total revenue grew 27%. These strong growth dynamics reflect the pace of wins across products, regions, and customers of all sizes and reinforce the durability of our business model.” Third Quarter Fiscal Year 2026 Financial Highlights Revenue Total revenue for the third quarter of fiscal year 2026 was $372.5 million, an increase of 27% from the same quarter in fiscal year 2025. Subscription and support revenue was $244.7 million, an increase of 35%; license revenue was $56.0 million, a decrease of 2%; and services revenue was $71.8 million, an increase of 32%, each compared to the same quarter in fiscal year 2025. As of April 30, 2026, annual recurring revenue, or ARR, was $1,147 million, compared to $1,041 million as of July 31, 2025. ARR results for interim quarterly periods in fiscal year 2026 are based on actual currency rates at the end of fiscal year 2025, held constant throughout the year. Profitability GAAP income from operations was $30.6 million for the third quarter of fiscal year 2026, compared with $4.5 million for the same quarter in fiscal year 2025. Non-GAAP income from operations was $77.8 million for the third quarter of fiscal year 2026, compared with $46.1 million for the same quarter in fiscal year 2025. GAAP net income was $16.5 million for the third quarter of fiscal year 2026, compared with $46.0 million for the same quarter in fiscal year 2025. GAAP net income was negatively impacted by a foreign currency loss of $20.1 million during the third quarter of fiscal year 2026, compared to a foreign currency gain of $34.2 million for the same quarter in fiscal year 2025 due to fluctuations in foreign exchange rates. GAAP diluted net income per share was $0.19 for the third quarter of fiscal year 2026, based on diluted weighted average shares outstanding of 85.1 million, compared with $0.54 for the same quarter in fiscal year 2025, based on diluted weighted average shares outstanding of 85.9 million. Non-GAAP net income was $69.6 million for the third quarter of fiscal year 2026, compared with $47.4 million for the same quarter in fiscal year 2025. Non-GAAP diluted net income per share was $0.82 for the third quarter of fiscal year 2026, based on diluted weighted average shares outstanding of 85.1 million, compared with non-GAAP diluted net income per share of $0.55 for the same quarter in fiscal year 2025, based on diluted weighted average shares outstanding of 85.9 million. Liquidity and Capital Resources Guidewire had $1,146.8 million in cash, cash equivalents, and investments at April 30, 2026, compared to $1,483.2 million at July 31, 2025. In January 2026, Guidewire’s board of directors authorized a new $500 million share repurchase program. As part of this program, Guidewire repurchased 1,696,180 shares of common stock at an average price of $147.07 in the quarter ended April 30, 2026. As of April 30, 2026, $240.5 million remains available for purchases under the share repurchase program. Business Outlook Guidewire is issuing the following outlook for the fourth quarter of fiscal year 2026 based on current expectations: Ending ARR between $1,229 million and $1,237 million Subscription and support revenue between $259 million and $265 million Total revenue between $396 million and $406 million GAAP operating income between $36 million and $46 million Non-GAAP operating income between $86 million and $96 million Guidewire is issuing the following updated outlook for fiscal year 2026 based on current expectations: Ending ARR between $1,229 million and $1,237 million Subscription and support revenue between $963 million and $969 million Total revenue between $1,460 million and $1,470 million GAAP operating income between $124 million and $134 million Non-GAAP operating income between $314 million and $324 million Operating cash flow between $365 million and $380 million Conference Call Information What: Guidewire Third Quarter Fiscal Year 2026 Financial Results Conference Call When: Thursday, June 4, 2026 Time: 2:00 p.m. PT (5:00 p.m. ET) Dial-In: (669) 444-9171 Meeting ID: 946 7934 9546 Password: 889559 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. A quarterly earnings supplemental presentation providing additional information and analysis can be found on our investor relations website ( www.guidewire.com ). 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 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, amortization of intangibles, and acquisition consideration holdback. Non-GAAP net income (loss), non-GAAP net income (loss) per share, and non-GAAP tax provision (benefit) also exclude the amortization of debt issuance costs from our convertible senior notes, changes in fair value of strategic investments, (gains) losses on sale of strategic investments, retirement of debt, unrealized foreign exchange rate (gains) losses, and 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 amortization and stock-based compensation. Annual recurring revenue (“ARR”) is used to quantify the annualized recurring value outlined in active customer contracts at the end of a reporting period. ARR includes the annualized recurring value of term licenses, subscription agreements, support contracts, and hosting agreements based on customer contractual terms and invoicing activities for the current reporting period, which may not be the same as the timing and amount of revenue recognized. ARR reflects all fee changes due to contract renewals, non-renewals, expansion, cancellations, attrition, or renegotiations at a higher or lower fee arrangement that are effective as of the ARR reporting date. All components of the licensing and other arrangements that are not expected to recur (primarily perpetual licenses and professional services) are excluded from our ARR calculations. In some arrangements with multiple performance obligations, a portion of recurring license and support or subscription contract value is allocated to services revenue for revenue recognition purposes, but does not get allocated for purposes of calculating ARR. This revenue allocation generally only impacts the initial term of the contract. This means that if we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value would be recognized as services revenue, but our reported ARR amount would not be impacted. During the nine months ended April 30, 2026, the recurring license and support or subscription contract value recognized as services revenue was $5.9 million. 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. Guidewire’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. Guidewire 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 Guidewire’s financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors. Guidewire’s management 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 Guidewire’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 Guidewire’s business. About Guidewire Guidewire is the platform P&C insurers trust to engage, innovate, and grow efficiently. More than 570 insurers in 43 countries, from new ventures to the largest and most complex in the world, rely on Guidewire products. With core systems leveraging data and analytics, digital, and artificial intelligence, Guidewire defines cloud platform excellence for P&C insurers. We are proud of our unparalleled implementation record, with 1,700+ successful projects supported by the industry’s largest R&D team and SI partner ecosystem. Our marketplace represents the largest partner community in P&C, where customers can access hundreds of applications to accelerate integration, localization, and innovation. Guidewire uses its Investor Relations website (ir.guidewire.com), X feed (@Guidewire_PandC), and LinkedIn page ( www.linkedin.com/company/guidewire-software ) as a means of disclosing information about the company and for complying with its disclosure obligations under Regulation FD. The information that is posted through these channels may be deemed material. Accordingly, investors should monitor these channels in addition to Guidewire’s press releases, filings with the Securities and Exchange Commission, public conference calls, and webcasts. NOTE: For information about Guidewire’s trademarks, visit www.guidewire.com/legal-notices . 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 targets, business and product strategies, sales and pipeline momentum, and market opportunities. 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 (the “SEC”) as well as other documents that may be filed by Guidewire from time to time with the SEC. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: fluctuations in our quarterly and annual operating results; our reliance on sales to, and renewals from, a relatively small number of large customers and the related substantial negotiating leverage of these customers; the length and complexity of our sales, product development, and implementation cycles; our competitive environment and changes thereto; our ability to effectively manage international expansion; issues in the development and use of artificial intelligence and machine learning technologies and the related evolving regulatory environment; our making long-term pricing commitments in our customer contracts based on available information and estimates about our future costs that may change; our ability to expand adoption of our cloud-based products and services, and the risk that any of our established products may fail to satisfy customer demands or maintain market acceptance; seasonal and other variations related to our customer agreements and related revenue recognition may cause significant fluctuations in our results of operations, ARR, and cash flows; our ability to develop, introduce, and market new and enhanced versions of our products and services; our ability to retain existing and hire new personnel, including managing a hybrid and geographically distributed workforce; errors or failures in our products or services, as well as service interruptions or failure of the third-party service providers we rely on; our ability to sell our services and products is highly dependent on the quality of our professional services and third-party global system integrators partners; use of AI by our workforce may present risks to our business; our services revenue produces lower gross margins than our license, subscription and support revenue; the impact of global events (including, without limitation, ongoing global conflicts, inflation, high interest rates, economic volatility, political uncertainties, tariffs, bank failures and associated financial instability, and supply chain issues); data security breaches of our cloud-based services and products or unauthorized access to our employees’ or our customers’ data; the impact of new regulations and laws (including, without limitation, security, privacy, AI and machine learning, tax regulations and laws, and accounting standards); assertions by third parties that we violate their intellectual property rights; stock price volatility regardless of our operating performance; and other risks and uncertainties. Past performance is not 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. Guidewire 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, 2026   July 31, 2025 ASSETS       CURRENT ASSETS:       Cash and cash equivalents $ 294,634     $ 697,902   Short-term investments   454,900       451,541   Accounts receivable, net   138,853       140,639   Unbilled accounts receivable, net   224,769       130,959   Prepaid expenses and other current assets   102,255       86,374   Total current assets   1,215,410       1,507,415   Long-term investments   397,267       333,754   Unbilled accounts receivable, net   83       670   Property and equipment, net   66,647       60,436   Operating lease assets   36,443       39,309   Intangible assets, net   17,727       12,042   Goodwill   421,111       393,978   Deferred tax assets, net   293,911       297,234   Other assets   86,533       76,261   TOTAL ASSETS $ 2,535,132     $ 2,721,099   LIABILITIES AND STOCKHOLDERS’ EQUITY       CURRENT LIABILITIES:       Accounts payable $ 34,972     $ 28,797   Accrued employee compensation   117,531       140,613   Deferred revenue, net   300,641       340,253   Other current liabilities   44,032       35,139   Total current liabilities   497,175       544,802   Lease liabilities   27,031       30,687   Convertible senior notes, net   677,206       674,568   Deferred revenue, net   3,718       4,533   Other liabilities   12,858       9,279   Total liabilities   1,217,987       1,263,869   STOCKHOLDERS’ EQUITY:       Common stock   8       8   Additional paid-in capital   2,169,769       2,020,393   Accumulated other comprehensive income (loss)   (7,105 )     (8,922 ) Retained earnings (accumulated deficit)   (845,527 )     (554,249 ) Total stockholders’ equity   1,317,145       1,457,230   TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 2,535,132     $ 2,721,099 GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands except share and per share data)   Three Months Ended April 30,   Nine Months Ended April 30,     2026       2025       2026       2025   Revenue:               Subscription and support $ 244,738     $ 181,823     $ 704,150     $ 529,403   License   55,996       57,233       157,491       158,297   Services   71,807       54,452       202,634       158,189   Total revenue   372,541       293,508       1,064,276       845,889   Cost of revenue (1) :               Subscription and support   67,882       57,411       195,737       170,531   License   374       892       1,460       2,715   Services   67,639       52,507       189,390       152,401   Total cost of revenue   135,896       110,810       386,587       325,647   Gross profit:               Subscription and support   176,856       124,412       508,413       358,872   License   55,622       56,341       156,031       155,582   Services   4,167       1,945       13,244       5,788   Total gross profit   236,645       182,698       677,689       520,242   Operating expenses (1) :               Research and development   87,868       72,915       249,510       212,063   Sales and marketing   68,201       57,768       193,934       164,698   General and administrative   49,939       47,547       146,689       132,010   Total operating expenses   206,008       178,230       590,133       508,771   Income (loss) from operations   30,637       4,468       87,556       11,471   Interest income   11,295       13,794       38,432       43,122   Interest expense   (3,318 )     (3,668 )     (9,965 )     (9,913 ) Other income (expense), net   (18,854 )     34,074       2,791       (36,270 ) Income (loss) before provision for (benefit from) income taxes   19,760       48,668       118,814       8,410   Provision for (benefit from) income taxes   3,289       2,677       10,926       (9,443 ) Net income (loss) $ 16,471     $ 45,991     $ 107,888     $ 17,853   Net income (loss) per share:               Basic $ 0.20     $ 0.55     $ 1.27     $ 0.21   Diluted $ 0.19     $ 0.54     $ 1.26     $ 0.21   Shares used in computing net income (loss) per share:               Basic   84,241,069       84,044,661       84,630,718       83,671,443   Diluted   85,065,999       85,880,643       85,945,646       85,654,903   (1) Amounts include stock-based compensation expense as follows:   Three Months Ended April 30,   Nine Months Ended April 30,   2026   2025   2026   2025 Stock-based compensation expense:               Cost of subscription and support revenue $ 3,391   $ 3,598   $ 10,437   $ 10,511 Cost of license revenue   —     32     —     104 Cost of services revenue   6,108     5,055     18,203     15,218 Research and development   12,061     10,267     36,277     30,560 Sales and marketing   11,598     10,832     35,014     31,400 General and administrative   11,784     10,573     35,085     31,572 Total stock-based compensation expense $ 44,941   $ 40,357   $ 135,015   $ 119,365 GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands)   Three Months Ended April 30,   Nine Months Ended April 30,     2026       2025       2026       2025   CASH FLOWS FROM OPERATING ACTIVITIES:               Net income (loss) $ 16,471     $ 45,991     $ 107,888     $ 17,853   Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:               Depreciation and amortization   7,230       5,965       20,632       17,538   Amortization of debt issuance costs   983       1,058       2,947       2,782   Amortization of contract costs   8,508       7,285       25,812       22,518   Stock-based compensation   44,941       40,357       135,015       119,365   Changes to allowance for credit losses and revenue reserves   205       17       2,542       1,107   Deferred income tax   (544 )     (1,692 )     922       (15,851 ) Amortization of premium (accretion of discount) on available-for-sale securities, net   (1,369 )     (2,064 )     (5,377 )     (8,613 ) (Gains) losses on sale of strategic investments   (632 )     —       (632 )     (3,671 ) Changes in fair value of strategic investments   (599 )     103       (554 )     341   Loss on retirement of debt   —       —       —       53,565   Other non-cash items affecting net income (loss)   11       53       18       56   Changes in operating assets and liabilities:               Accounts receivable   23,941       (23,426 )     276       (10,609 ) Unbilled accounts receivable   (50,119 )     (50,377 )     (93,214 )     (74,471 ) Prepaid expenses and other assets   (19,534 )     (12,098 )     (33,815 )     (29,305 ) Operating lease assets   987       1,375       2,866       1,983   Accounts payable   6,097       3,439       7,910       13,589   Accrued employee compensation   34,079       26,278       (23,578 )     (20,600 ) Deferred revenue   (8,266 )     (7,354 )     (40,781 )     (24,876 ) Lease liabilities   (2,242 )     (970 )     (3,572 )     (1,121 ) Other liabilities   1,035       (1,590 )     525       (5,544 ) Net cash provided by (used in) operating activities   61,183       32,350       105,830       56,036   CASH FLOWS FROM INVESTING ACTIVITIES:               Purchases of available-for-sale securities   (109,366 )     (242,588 )     (644,915 )     (672,330 ) Maturities and sales of available-for-sale securities   199,695       226,776       582,638       529,887   Purchases of property and equipment   (1,772 )     (703 )     (9,934 )     (2,336 ) Capitalized software development costs   (5,747 )     (3,816 )     (13,939 )     (10,972 ) Acquisition of strategic investments   (12,242 )     (1,000 )     (14,590 )     (1,772 ) Sale of strategic investment   781       —       781       5,671   Acquisition of business, net of acquired cash   (200 )     (26,724 )     (33,453 )     (26,724 ) Net cash provided by (used in) investing activities   71,148       (48,055 )     (133,412 )     (178,576 ) CASH FLOWS FROM FINANCING ACTIVITIES:               Proceeds from issuance of convertible senior notes, net of issuance costs   —       —       —       671,840   Payment for the retirement of convertible senior notes   —       —       —       (353,535 ) Payment for the maturity of convertible senior notes   —       (179,061 )     —       (179,061 ) Purchase of capped calls   —       —       —       (58,788 ) Payment of revolving credit facility costs   —       —       —       (2,065 ) Proceeds from issuance of common stock under employee stock purchase plan   —       —       13,364       —   Proceeds from issuance of common stock upon exercise of stock options   8       710       539       3,174   Repurchase and retirement of common stock   (244,255 )     —       (392,447 )     —   Net cash provided by (used in) financing activities   (244,247 )     (178,351 )     (378,544 )     81,565   Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash   (1,395 )     6,888       1,666       3,303   NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH   (113,312 )     (187,168 )     (404,460 )     (37,672 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period   407,946       698,680       699,094       549,184   CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period $ 294,634     $ 511,512     $ 294,634     $ 511,512 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,     2026       2025       2026       2025   Gross profit reconciliation:               GAAP gross profit $ 236,645     $ 182,698     $ 677,689     $ 520,242   Non-GAAP adjustments:               Stock-based compensation   9,498       8,685       28,639       25,833   Amortization of intangibles   1,180       485       3,045       1,455   Non-GAAP gross profit $ 247,324     $ 191,868     $ 709,373     $ 547,530                   Income (loss) from operations reconciliation:               GAAP income (loss) from operations $ 30,637     $ 4,468     $ 87,556     $ 11,471   Non-GAAP adjustments:               Stock-based compensation   44,941       40,357       135,015       119,365   Amortization of intangibles   1,765       1,234       4,968       3,879   Acquisition consideration holdback   440       —       1,064       —   Non-GAAP income (loss) from operations $ 77,784     $ 46,059     $ 228,604     $ 134,715                   Net income (loss) reconciliation:               GAAP net income (loss) $ 16,471     $ 45,991     $ 107,888     $ 17,853   Non-GAAP adjustments:               Stock-based compensation   44,941       40,357       135,015       119,365   Amortization of intangibles   1,765       1,234       4,968       3,879   Acquisition consideration holdback   440       —       1,064       —   Amortization of debt issuance costs   984       1,058       2,947       2,782   Changes in fair value of strategic investments   (599 )     103       (554 )     341   (Gains) losses on sale of strategic investments   (632 )     —       (632 )     (3,671 ) Retirement of debt   —       —       —       53,565   Unrealized foreign exchange rate (gains) losses (1)   20,141       (34,176 )     (1,513 )     (13,967 ) Tax impact of non-GAAP adjustments   (13,864 )     (7,157 )     (39,295 )     (35,330 ) Non-GAAP net income (loss) $ 69,648     $ 47,409     $ 209,888     $ 144,817                   Tax provision (benefit) reconciliation:               GAAP tax provision (benefit) $ 3,289     $ 2,677     $ 10,926     $ (9,443 ) Non-GAAP adjustments:               Stock-based compensation   8,881       6,933       26,154       18,110   Amortization of intangibles   349       212       963       586   Acquisition consideration holdback   87       —       206       —   Amortization of debt issuance costs   194       182       571       426   Changes in fair value of strategic investments   (118 )     18       (110 )     51   (Gains) losses on sale of strategic investments   —       —       —       (520 ) Retirement of debt   —       —       —       7,585   Unrealized foreign exchange rate (gains) losses (1)   3,980       (5,871 )     (152 )     (3,011 ) Tax impact of non-GAAP adjustments   490       5,684       11,664       12,103   Non-GAAP tax provision (benefit) $ 17,153     $ 9,834     $ 50,222     $ 25,887   GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited, in thousands except share and per share data) 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,     2026       2025       2026       2025   Net income (loss) per share reconciliation:               GAAP net income (loss) per share – diluted $ 0.19     $ 0.54     $ 1.26     $ 0.21   Non-GAAP adjustments:               Stock-based compensation   0.53       0.47       1.57       1.39   Amortization of intangibles   0.02       0.01       0.06       0.05   Acquisition consideration holdback   —       —       —       —   Amortization of debt issuance costs   0.01       0.01       0.03       0.03   Changes in fair value of strategic investments   (0.01 )     —       (0.01 )     —   (Gains) losses on sale of strategic investments   (0.01 )     —       (0.01 )     (0.04 ) Retirement of debt   —       —       —       0.63   Unrealized foreign exchange rate (gains) losses (1)   0.24       (0.40 )     (0.02 )     (0.16 ) Tax impact of non-GAAP adjustments   (0.16 )     (0.08 )     (0.46 )     (0.41 ) Non-GAAP net income (loss) per share – diluted $ 0.82     $ 0.55     $ 2.44     $ 1.70                   Shares used in computing non-GAAP net income (loss) per share amounts:               GAAP and pro forma weighted average shares — diluted   85,065,999       85,880,643       85,945,646       85,654,903   (1) During the third quarter of fiscal year 2026, we began excluding unrealized foreign currency exchange rate (gains) losses as a non-GAAP adjustment to other income (expense), net. Accordingly, we have recast previously reported amounts in our non-GAAP schedules. The following table summarizes our free cash flow for the periods indicated below:   Three Months Ended April 30,   Nine Months Ended April 30,     2026       2025       2026       2025   Free cash flow:               Net cash provided by (used in) operating activities $ 61,183     $ 32,350     $ 105,830     $ 56,036   Purchases of property and equipment   (1,772 )     (703 )     (9,934 )     (2,336 ) Capitalized software development costs   (5,747 )     (3,816 )     (13,939 )     (10,972 ) Free cash flow $ 53,664     $ 27,831     $ 81,957     $ 42,728 GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Outlook The following table reconciles 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 2026   Fiscal Year 2026 Income (loss) from operations outlook reconciliation:               GAAP income (loss) from operations $36 — $46   $124 — $134 Non-GAAP adjustments:               Stock-based compensation 47 — 47   182 — 182 Amortization of intangibles & other 2 — 2   9 — 9 Non-GAAP income (loss) from operations $86 — $96   $314 — $324 Certain figures included in this document have been subjected to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. View source version on businesswire.com: https://www.businesswire.com/news/home/20260604880417/en/

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