Guidewire Software : 3Q26 Earnings Deck and Supplemental

About this update from Guidewire Software, Inc.

Q3 Fiscal 2026 Earnings June 4, 2026 S tatement Regarding Use of Non-GAAP Financial Measures and Other Metrics This presentation contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP subscription and support gross margin, non-GAAP operating margin, 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, non-GAAP gross margin, non-GAAP subscription and support gross margin, non-GAAP operating margin, 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 and losses on sale of strategic investments, retirement of debt, unrealized foreign exchange rate gains and 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. Fully ramped annual recurring revenue ("fully ramped ARR" or "FRARR") is used to quantify the annualized recurring value outlined in active customer contracts including all non-variable price increases outlined in the pricing schedule of an executed customer contract within the first five years. 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 this presentation, including the financial table in the appendix, and not to rely on any single financial measure to evaluate Guidewire's business. Our mission is to power insurance agility with the platform P&C insurers trust to 4 engage, innovate, and grow efficiently The P&C industry is large, global, concentrated, and complex Property & Casualty Insurance Durable industry with $3T in global direct written premium (DWP) and steadily growing in-line with GDP Led by many segments that are legally and practically compulsory ~90 Insurers ~250 Insurers Tier 1 DWP > $5B Tier 2 $1B < DWP < $5B ~$3.0T DWP ~$2.0T DWP ~$0.6T DWP ~$0.4T APAC EMEA AMER Deep and complex regulatory environments >2,000 Insurers Tier 3/4/5 DWP < $1B DWP Global industry with DWP across AMER/EMEA/APAC Concentration has created highly complex IT environments with significant legacy to modernize Tier 1 and 2 Insurers represent 85%+ of DWP supporting our prolonged focus on the specific complexities of this segment Sources: NAIC and SwissRe Sigma No 2/2025. US DWP from NAIC P&C insurance data. Non-US DWP from SwissRe Sigma No 2/2025 report, which estimates non-life premiums and is inclusive of A&H. 5 Guidewire is the P&C industry's leading core platform Guidewire Cloud Platform Marketplace By Line of Business Guidewire Extensions Partner Extensions Packaged Integrations By Geography Applications PricingCenter UnderwritingCenter PolicyCenter BillingCenter ClaimCenter InsuranceNow HazardHub Predict Industry Intel Explore MCP Access RAG Access GenAI Services LLM Access Task Management Prompt Management Security/Observability Training/Evaluation Application Services Product Integration Rules Workflow Data Digital Containerization Configuration Platform Services Provisioning Security Connectivity Deployment Observability Cloud Infrastructure Insurance is a highly regulated, trust-based industry that evolves deliberately and depends on precision, resilience, compliance, and accuracy at scale Guidewire Cloud Platform (GWCP) is the operational and financial backbone of the insurer, embedded across the core operating functions of the insurance lifecycle, including pricing, underwriting, policy, claims, and billing GWCP is run as a continuously improving, secure, reliable, and scalable cloud service $775B DWP under contract 1 349 Core customers 1 43 Countries where Guidewire is run 9/10 9 of the Top 10 Global Insurers use Guidewire 2 * All data as of FY25 6 Under contract for at least one of our core modules (InsuranceSuite or InsuranceNow). Source: S&P Global Market Intelligence. Excludes China market and Lloyd's of London. Our 25 year commitment to P&C has created a durable business ARR (in $millions) $1,147 1,000 750 500 250 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 7 Note: Rolling 4 quarter recurring revenue used as proxy for ARR through Q3'17. Quarterly ARR uses FX rate at the start of each fiscal year. We have multiple growth drivers that are accelerated by AI Core Expansion at Existing Customers Continued migrations Insurer core system consolidations Net-New Customers Cloud referenceability Modernization urgency All-time high win rates Geographic and Line of Business Expansion Acceleration in strategic markets New Application Portfolio PricingCenter UnderwritingCenter Industry Intel ProNavigator Faster implementations and accelerated innovation AI adoption drives market innovation and increases need for modernization Rapid product localization and LOB specification Increases product development velocity AI Acceleration 8 Q3'FY26 financial results reflect continued momentum Revenue ARR Total Revenue $1.147B $ 373M +19% YoY +27% YoY Subscription and Support Revenue $245M +35% YoY 66% of total revenue Gross Margin Subscription and Support Gross Margin 72% (GAAP) +4 pts YoY 74% (non-GAAP) +3 pts YoY Total Gross Margin 64% 66% (GAAP) (non-GAAP) +1 pt YoY +1 pt YoY Operating Margin Operating Margin (GAAP) $31M +586% YoY and 8% of revenue +7 pts YoY Operating Margin (Non-GAAP) $78M +69% YoY and 21% of revenue +5 pts YoY 9 Note: Quarterly year-over-year ARR growth based on in-period as reported ARR. ARR growth on a constant currency basis was 18%. Auto Club of Southern California signed a seven-year expansion of InsuranceSuite on Guidewire Cloud Platform, alongside a significant new sale of ProNavigator, to support long-term growth and incorporate greater AI-driven capabilities into its operations. UK insurer part of a global insurance group selected ClaimCenter on Guidewire Cloud Platform as part of a broader modernization initiative designed to simplify and accelerate its technology roadmap. Notable Q3'FY26 Wins Commercial insurance entity at a large US carrier chose PolicyCenter on Guidewire Cloud Platform. The flexibility of Advanced Product Designer and Jutro (our digital experience platform), combined with the agility of our cloud platform, were important differentiators in the decision process. Large strategic net-new win in Brazil with Bradesco Seguro who selected Guidewire Cloud Platform to consolidate and modernize a significant legacy footprint. The insurer is focused on improving product velocity and accelerating speed to market. Five ProNavigator wins as carriers increasingly look to embed AI-driven knowledge and workflow automation directly into core insurance operations. Three PricingCenter wins , including one with a Swedish insurer, an insurer in Poland, as well as our first U.S. PricingCenter win, Oklahoma Farm Bureau, which selected the platform to become more nimble in pricing and rating, reduce IT costs, and accelerate speed to market. 10 Strong and durable revenue growth ARR (in $millions) 19% 19% 14% Subscription & Support Revenue (in $millions) 33% 28% 35% 11 Note: Annual ARR Growth based on in-year constant currency FX rates. Quarterly year-over-year ARR growth based on in-period as reported ARR. Profitability increasing with scale, efficiency, and discipline (in $millions) 12 Note: Please see Appendix for a reconciliation of Non-GAAP financial measures to the most comparable GAAP measures for periods shown above. Maintaining strategic flexibility while accelerating share buybacks Updated capital allocation framework Cash Generation $373M FY26 Cash Flow from Operations* 26% FY26 Cash Flow from Operations Margin* Strong Balance Sheet $1.15B Q3 Cash & Investments $400M Minimum Cash Reserve To run the business and ensure customer confidence Excess Cash Priorities Share Repurchases Plan to execute repurchase authorization by fiscal year end Potential M&A Targeted acquisitions focused on product expansion $398M YTD purchases Share Repurchase Activity $250M Q3 purchases $241M Remaining Authorization 13 * Based on mid-point of updated Cash Flow from Operations guidance issued on June 4, 2026. Raising Full Year Outlook Previous FY'26 Outlook Updated FY'26 Outlook Annual Recurring Revenue (ARR) $1,229M - $1,237M $1,229M - $1,237M Subscription and Support Revenue $962M - $966M $963M - $969M Total Revenue $1,438M - $1,448M $1,460M - $1,470M GAAP Operating Income $100M - $110M $124M - $134M Non-GAAP Operating Income $293M - $303M $314M - $324M Operating Cash Flow $360M - $375M $365M - $380M 14 Appendix Classification: Public | Internal | Confidential Condensed Consolidated Statement of Operations - GAAP (unaudited, in thousands except share and per share data) Description Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Revenue: FY 2023 FY 2024 FY 2025 Subscription and support $ 169,742 $ 177,838 $ 181,823 $ 201,893 $ 222,203 $ 237,209 $ 244,738 $ 429,667 $ 549,087 $ 731,296 License 37,370 63,694 57,233 93,638 41,967 59,528 55,996 265,593 250,176 251,935 Services 55,789 47,948 54,452 61,039 68,469 62,358 71,807 210,081 181,234 219,228 Total revenue 262,901 289,480 293,508 356,570 332,639 359,095 372,541 905,341 980,497 1,202,459 Cost of revenue: Subscription and support 54,024 59,096 57,411 64,575 63,927 63,928 67,882 210,507 204,794 235,106 License 881 942 892 909 644 442 374 6,488 4,536 3,624 Services 49,604 50,290 52,507 59,275 58,546 63,205 67,639 230,135 187,806 211,676 Total cost of revenue 104,509 110,328 110,810 124,759 123,117 127,574 135,896 447,130 397,136 450,406 Gross profit: Subscription and support 115,718 118,742 124,412 137,318 158,276 173,281 176,856 219,160 344,293 496,190 License 36,489 62,752 56,341 92,729 41,323 59,086 55,622 259,105 245,640 248,311 Services 6,185 (2,342) 1,945 1,764 9,923 (847) 4,167 (20,054) (6,572) 7,552 Total gross profit 158,392 179,152 182,698 231,811 209,522 231,521 236,645 458,211 583,361 752,053 Operating expenses: Research and development 68,880 70,268 72,915 84,097 78,317 83,324 87,868 249,746 269,381 296,160 Sales and marketing 51,478 55,452 57,768 65,648 64,258 61,475 68,201 188,224 199,033 230,346 General and administrative 42,754 41,709 47,547 52,469 48,469 48,281 49,939 169,731 167,520 184,479 Total operating expenses 163,112 167,429 178,230 202,214 191,044 193,080 206,008 607,701 635,934 710,985 Income (loss) from operations (4,720) 11,723 4,468 29,597 18,478 38,441 30,637 (149,490) (52,573) 41,068 Interest income 13,606 15,722 13,794 13,503 14,650 12,487 11,295 24,389 43,478 56,625 Interest expense (2,062) (4,183) (3,668) (3,298) (3,312) (3,334) (3,318) (6,716) (6,738) (13,211) Other income (expense), net Income (loss) before provision for (benefit from) (4,055) (66,289) 34,074 1,183 (5,314) 26,958 (18,854) (2,277) (11,005) (35,087) income taxes 2,769 (43,027) 48,668 40,985 24,502 74,552 19,760 (134,094) (26,838) 49,395 Provision for (benefit from) income taxes (6,370) (5,750) 2,677 (10,966) (6,806) 14,442 3,289 (22,239) (20,735) (20,409) Net income (loss) $ 9,139 $ (37,277) $ 45,991 $ 51,951 $ 31,308 $ 60,110 $ 16,471 $ (111,855) $ (6,103) $ 69,804 Earnings per share: Basic $ 0.11 $ (0.45) $ 0.55 $ 0.62 $ 0.37 $ 0.71 $ 0.20 $ (1.36) $ (0.07) $ 0.83 Diluted $ 0.11 $ (0.45) $ 0.54 $ 0.60 $ 0.36 $ 0.70 $ 0.19 $ (1.36) $ (0.07) $ 0.81 Shares used in computing net earnings per share: Basic 83,276,236 83,705,700 84,044,661 84,366,889 84,780,201 84,858,179 84,241,069 82,176,629 82,291,483 83,846,793 Diluted 85,960,868 83,705,700 85,880,643 86,267,658 86,451,737 86,116,567 85,065,999 82,176,629 82,291,483 85,911,653 These schedules have been derived from, and should be read in conjunction with, our financial statements in our reports on Forms 10-Q and 10-K which are filed with the SEC. Our Forms 10-Q and 10-K may be found on our website at http://ir.guidewire.com/phoenix.zhtml?c=248177&p=irol-sec . 16 Condensed Consolidated Statement of Operations - Key Metrics (unaudited, in thousands) Description Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 FY 2023 FY 2024 FY 2025 Subscription revenue $ 152,858 $ 161,659 $ 166,464 $ 186,455 $207,459 $ 222,724 $ 232,129 $ 352,145 $ 477,461 $667,436 Support revenue 16,884 16,179 15,359 15,438 14,744 14,485 12,609 77,522 71,626 63,860 Subscription and support revenue $ 169,742 $ 177,838 $ 181,823 $ 201,893 $ 222,203 $237,209 $ 244,738 $429,667 $549,087 $ 731,296 Annual recurring revenue (in millions) $ 874 $ 918 $ 960 $ 1,032 $ 1,063 $ 1,121 $ 1,147 $ 763 $ 864 $ 1,041 Fully ramped annual recurring revenue (in millions) (1) $ 1,418 $ 898 $ 1,055 $ 1,296 Remaining performance obligations (in billions) $ 2.0 $ 2.1 $ 2.5 $ 3.1 $ 3.2 $ 3.5 $ 3.6 $ 1.5 $ 2.0 $ 3.1 Free cash flow: Net cash provided by (used in) operating activities $ (62,305) $85,991 $32,350 $244,831 $ (67,398) $112,046 $ 61,183 $ 38,395 $ 195,748 $300,867 Purchases of property and equipment (843) (790) (703) (3,405) (4,878) (3,284) (1,772) (5,821) (6,362) (5,741) Capitalized software development costs (4,233) (2,923) (3,816) (3,742) (5,088) (3,104) (5,747) (11,606) (12,165) (14,714) Free cash flow $ (67,381) $ 82,278 $ 27,831 $ 237,684 $ (77,364) $ 105,658 $ 53,664 $ 20,968 $ 177,221 $ 280,412 Annual recurring revenue ("ARR") for the quarterly periods in fiscal year 2025 are based on actual currency rates at the end of fiscal year 2024, held constant throughout the year. ARR and and fully ramped annual recurring revenue ("FRARR") for the quarterly periods in fiscal year 2026 are based on actual currency rates at the end of fiscal year 2025, held constant throughout the year. ARR and FRARR reflected in the FY 2023, FY 2024, and FY 2025 columns are based on the currency rates at the end of fiscal years 2023, 2024, and 2025, respectively. (1) FRARR is a non-GAAP supplemental metric typically furnished alongside our annual results. From time to time, we may provide updates at an interim period at management's discretion, such as the updates provided in the second quarter of fiscal year 2026. We do not intend to, nor are we obligated to, furnish or update this metric on a recurring basis in future interim periods. This information is being furnished, not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into our Form 10-Q, Form 10-K, or any other formal SEC filing. Other than noted above, these schedules have been derived from, and should be read in conjunction with, our financial statements in our reports on Forms 10-Q and 10-K which are filed with the SEC. Our Forms 10-Q and 10-K may be found on our website at http://ir.guidewire.com/phoenix.zhtml?c=248177&p=irol-sec . 17 Condensed Consolidated Statement of Operations - Non-GAAP Adjustments (unaudited, in thousands) Description Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 FY 2023 FY 2024 FY 2025 Amortization of intangibles $ 485 $ 485 $ 485 $ 800 $ 808 $ 1,057 $ 1,180 $ 3,360 $ 1,940 $ 2,255 Stock-based compensation 3,140 3,773 3,598 3,442 3,450 3,596 3,391 14,073 13,425 13,953 Total adjustment to cost of revenue - subscription and support $ 3,625 $ 4,258 $ 4,083 $ 4,242 $ 4,258 $ 4,653 $ 4,571 $ 17,433 $ 15,365 $ 16,208 Total adjustment to cost of revenue - license - Stock-based compensation $ 36 $ 36 $ 32 $ 32 $ - $ - $ - $ 463 $ 186 $ 136 Total adjustment to cost of revenue - services - Stock-based compensation $ 4,802 $ 5,361 $ 5,055 $ 5,541 $ 5,700 $ 6,395 $ 6,108 $ 19,257 $ 19,013 $ 20,759 Stock-based compensation $ 9,824 $ 10,469 $ 10,267 $ 11,200 $ 11,259 $ 12,957 $ 12,061 $ 39,865 $ 40,213 $ 41,760 Acquisition consideration holdback - - - 116 116 118 110 2,939 143 116 Total adjustment to research and development $ 9,824 $ 10,469 $ 10,267 $ 11,316 $ 11,375 $ 13,075 $ 12,171 $ 42,804 $ 40,356 $ 41,876 Stock-based compensation $ 9,688 $ 10,880 $ 10,832 $ 11,870 $ 11,822 $ 11,594 $ 11,598 $ 29,925 $ 34,590 $ 43,270 Amortization of intangibles 882 793 749 765 647 692 584 3,528 3,528 3,189 Acquisition consideration holdback - - - 61 61 328 331 - - 61 Total adjustment to sales and marketing $ 10,570 $ 11,673 $ 11,581 $ 12,696 $ 12,530 $ 12,614 $ 12,513 $ 33,453 $ 38,118 $ 46,520 Stock-based compensation $ 10,570 $ 10,429 $ 10,573 $ 10,106 $ 11,085 $ 12,216 $ 11,784 $ 39,259 $ 39,033 $ 41,678 Net impact of assignment of lease agreement - - - - - - - 8,502 - - Total adjustment to general and administrative $ 10,570 $ 10,429 $ 10,573 $ 10,106 $ 11,085 $ 12,216 $ 11,784 $ 47,761 $ 39,033 $ 41,678 Total adjustment to interest expense - Amortization of debt issuance costs $ 545 $ 1,179 $ 1,058 $ 976 $ 980 $ 984 $ 984 $ 1,703 $ 1,732 $ 3,758 Changes in fair value of strategic investments $ (53) $ 291 $ 103 $ 1,789 $ 60 $ (15) $ (599) $ 802 $ 1,957 $ 2,130 (Gains) losses on sale of strategic investments - (3,671) - - - - (632) - (1,803) $ (3,671) Retirement of debt 300 53,265 - - - - - - - $ 53,565 Unrealized foreign exchange rate (gains) losses† $ 3,780 $ 16,429 $ (34,176) $ (2,776) $ 5,260 $ (26,914) $ 20,141 † † $ (16,743) Total adjustment to other income (expense), net $ 4,027 $ 66,314 $ (34,073) $ (987) $ 5,320 $ (26,930) $ 18,910 $ 802 $ 154 $ 35,281 Total adjustment to provision for (benefit from) income taxes - Non-GAAP tax impact $ (12,979) $ (15,194) $ (7,157) $ (25,571) $ (21,381) $ (4,051) $ (13,864) $ (22,611) $ (33,333) $ (60,902) These schedules have been derived from, and should be read in conjunction with, our financial statements in our reports on Forms 10-Q and 10-K which are filed with the SEC. Our Forms 10-Q and 10-K may be found on our website at http://ir.guidewire.com/phoenix.zhtml?c=248177&p=irol-sec . †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 for the quarterly and annual periods beginning in the first quarter of fiscal year 2025. 18 Condensed Consolidated Statement of Operations - Non-GAAP Reconciliations (unaudited, in thousands except percentage) Description Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 FY 2023 FY 2024 FY 2025 Gross profit reconciliation: GAAP gross profit $ 158,392 $ 179,152 $ 182,698 $ 231,811 $ 209,522 $ 231,521 $236,645 $ 458,211 $ 583,361 $ 752,053 Non-GAAP adjustments: Stock-based compensation 7,978 9,170 8,685 9,015 9,150 9,991 9,498 33,793 32,624 34,848 Amortization of intangibles 485 485 485 800 808 1,057 1,180 3,360 1,940 2,255 Gross profit reconciliation - subscription and support: Non-GAAP adjustments: Amortization of intangibles 485 485 485 800 808 1,057 1,180 3,360 1,940 2,255 $ 236,593 $ 359,658 $ 512,398 Non-GAAP gross profit - subscription and support $ 119,343 $123,000 $ 128,495 $ 141,560 $ 162,534 $ 177,934 $ 181,427 14,073 13,425 13,953 Stock-based compensation 3,140 3,773 3,598 3,442 3,450 3,596 3,391 $ 219,160 $ 344,293 $ 496,190 GAAP gross profit - subscription and support $ 115,718 $ 118,742 $ 124,412 $ 137,318 $ 158,276 $ 173,281 $176,856 $ 495,364 $ 617,925 $ 789,156 Non-GAAP gross profit $ 166,855 $ 188,807 $ 191,868 $ 241,626 $ 219,480 $ 242,569 $247,324 Gross profit reconciliation - license: GAAP gross profit - license $ 36,489 $ 62,752 $ 56,341 $ 92,729 $ 41,323 $ 59,086 $ 55,622 $ 259,105 $ 245,640 $ 248,311 Non-GAAP adjustments: Stock-based compensation 36 36 32 32 - - - 463 186 136 Non-GAAP gross profit - license $ 36,525 $ 62,788 $ 56,373 $ 92,761 $ 41,323 $ 59,086 $ 55,622 $ 259,568 $ 245,826 $ 248,447 Gross profit reconciliation - services: GAAP gross profit - services $ 6,185 $ (2,342) $ 1,945 $ 1,764 $ 9,923 $ (847) $ 4,167 $ (20,054) $ (6,572) $ 7,552 Non-GAAP adjustments: Stock-based compensation 4,802 5,361 5,055 5,541 5,700 6,395 6,108 19,257 19,013 20,759 Non-GAAP gross profit - services $ 10,987 $ 3,019 $ 7,000 $ 7,305 $ 15,623 $ 5,548 $ 10,275 $ (797) $ 12,441 $ 28,311 These schedules have been derived from, and should be read in conjunction with, our financial statements in our reports on Forms 10-Q and 10-K which are filed with the SEC. Our Forms 10-Q and 10-K may be found on our website at http://ir.guidewire.com/phoenix.zhtml?c=248177&p=irol-sec . 19 Condensed Consolidated Statement of Operations - Non-GAAP Reconciliations (unaudited) Subscription and support: Stock-based compensation 1.8 % 2.1 % 1.9 % 1.8 % 1.6 % 1.5 % 1.3 % 3.3 % 2.4 % 1.9 % Non-GAAP gross margin 70.3 % 69.2 % 70.6 % 70.2 % 73.2 % 75.0 % 74.1 % 55.1 % 65.5 % 70.1 % GAAP gross margin 97.6 % 98.5 % 98.4 % 99.0 % 98.5 % 99.3 % 99.3 % 97.6 % 98.2 % 98.6 % Non-GAAP gross margin 97.7 % 98.6 % 98.5 % 99.1 % 98.5 % 99.3 % 99.3 % 97.8 % 98.3 % 98.7 % GAAP gross margin 11.1 % (4.9)% 3.6 % 2.9 % 14.5 % (1.4)% 5.8 % (9.6)% (3.6)% 3.4 % Non-GAAP gross margin 19.7 % 6.3 % 12.9 % 12.0 % 22.8 % 8.9 % 14.3 % (0.4)% 6.9 % 12.9 % GAAP gross margin 60.2 % 61.9 % 62.3 % 65.0 % 63.0 % 64.5 % 63.6 % 50.6 % 59.5 % 62.5 % Stock-based compensation 3.1 % 3.1 % 3.0 % 2.5 % 2.8 % 2.8 % 2.5 % 3.7 % 3.3 % 2.9 % FY 2024 FY 2025 FY 2023 Gross margin: Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Description 54.7 % 63.0 % 65.6 % Non-GAAP gross margin 63.5 % 65.2 % 65.5 % 67.7 % 66.0 % 67.6 % 66.4 % 0.4 % 0.2 % 0.2 % Amortization of intangibles 0.2 % 0.2 % 0.2 % 0.2 % 0.2 % 0.3 % 0.3 % Overall: 9.2 % 10.5 % 9.5 % Stock-based compensation 8.6 % 11.2 % 9.3 % 9.1 % 8.3 % 10.3 % 8.5 % Services: 0.2 % 0.1 % 0.1 % Stock-based compensation 0.1 % 0.1 % 0.1 % 0.1 % - % - % - % License: 0.8 % 0.4 % 0.3 % Amortization of intangibles 0.3 % 0.3 % 0.3 % 0.4 % 0.4 % 0.5 % 0.5 % 51.0 % 62.7 % 67.9 % GAAP gross margin 68.2 % 66.8 % 68.4 % 68.0 % 71.2 % 73.1 % 72.3 % These schedules have been derived from, and should be read in conjunction with, our financial statements in our reports on Forms 10-Q and 10-K which are filed with the SEC. Our Forms 10-Q and 10-K may be found on our website at http://ir.guidewire.com/phoenix.zhtml?c=248177&p=irol-sec . 20 Condensed Consolidated Statement of Operations - Non-GAAP Reconciliations (unaudited, in thousands) Description Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 FY 2023 FY 2024 FY 2025 Income (loss) from operations reconciliation: GAAP income (loss) from operations $ (4,720) $ 11,723 $ 4,468 $ 29,597 $ 18,478 $ 38,441 $ 30,637 $ (149,490) $ (52,573) $ 41,068 Non-GAAP adjustments: Stock-based compensation 38,060 40,948 40,357 42,191 43,316 46,758 44,941 142,842 146,460 161,556 Amortization of intangibles 1,367 1,278 1,234 1,565 1,455 1,748 1,765 6,888 5,468 5,444 Acquisition consideration holdback - - - 177 177 447 440 2,939 143 177 Net impact of assignment of lease agreement - - - - - - - 8,502 - - Non-GAAP income (loss) from operations $ 34,707 $ 53,949 $ 46,059 $ 73,530 $ 63,426 $ 87,394 $ 77,784 $ 11,681 $ 99,498 $ 208,245 Net income (loss) reconciliation: GAAP net income (loss) $ 9,139 $ (37,277) $ 45,991 $ 51,951 $ 31,308 $ 60,110 $ 16,471 $ (111,855) $ (6,103) $ 69,804 Non-GAAP adjustments: Stock-based compensation 38,060 40,948 40,357 42,191 43,316 46,758 44,941 142,842 146,460 161,556 Amortization of intangibles 1,367 1,278 1,234 1,565 1,455 1,748 1,765 6,888 5,468 5,444 Acquisition consideration holdback - - - 177 177 447 440 2,939 143 177 Net impact of assignment of lease agreement - - - - - - - 8,502 - - Amortization of debt issuance costs 545 1,179 1,058 976 980 984 984 1,703 1,732 3,758 Changes in fair value of strategic investments (53) 291 103 1,789 60 (15) (599) 802 1,957 2,130 (Gains) losses on sale of strategic investments - (3,671) - - - - (632) - (1,803) (3,671) Retirement of debt 300 53,265 - - - - - - - 53,565 Unrealized foreign exchange rate (gains) losses† 3,780 16,429 (34,176) (2,776) 5,260 (26,914) 20,141 † † (16,743) Non-GAAP tax impact (12,979) (15,194) (7,157) (25,572) (21,381) (4,051) (13,864) (22,611) (33,333) (60,902) Non-GAAP net income (loss) $ 40,159 $ 57,249 $ 47,409 $ 70,301 $ 61,174 $ 79,066 $ 69,648 $ 29,210 $ 114,521 $ 215,118 These schedules have been derived from, and should be read in conjunction with, our financial statements in our reports on Forms 10-Q and 10-K which are filed with the SEC. Our Forms 10-Q and 10-K may be found on our website at http://ir.guidewire.com/phoenix.zhtml?c=248177&p=irol-sec . †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 for the quarterly and annual periods beginning in the first quarter of fiscal year 2025. 21 Condensed Consolidated Statement of Operations - Non-GAAP Reconciliations (unaudited) Description Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 FY 2023 FY 2024 FY 2025 $ (1.36) $ (0.07) $ 0.81 GAAP diluted earnings per share $ 0.11 $ (0.45) $ 0.54 $ 0.60 $ 0.36 $ 0.70 $ 0.19 Reconciliation of GAAP to Non-GAAP earnings per share: 0.08 0.07 0.06 Amortization of intangibles 0.02 0.02 0.01 0.02 0.02 0.02 0.02 Stock-based compensation 0.44 0.49 0.47 0.49 0.51 0.54 0.53 1.74 1.78 1.89 0.10 - - Net impact of assignment of lease agreement - - - - - - - Acquisition consideration holdback - - - - - - - 0.04 (0.01) - 0.01 0.02 0.02 Changes in fair value of strategic investments - - - 0.02 - - (0.01) Amortization of debt issuance costs 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.02 0.02 0.04 - - 0.63 Retirement of debt - 0.64 - - - - - (Gains) losses on sale of strategic investments - (0.04) - - - - (0.01) - (0.02) (0.04) (0.28) (0.41) (0.71) Non-GAAP tax impact (0.15) (0.18) (0.08) (0.29) (0.25) (0.05) (0.16) Unrealized foreign exchange rate (gains) losses† 0.04 0.20 (0.40) (0.03) 0.06 (0.31) 0.24 † † (0.19) Interest expense on convertible debt - - - - - - - - 0.05 - Non-GAAP dilutive shares excluded from GAAP EPS calculation - (0.03) - - - - - Non-GAAP diluted earnings per share $ 0.47 $ 0.66 $ 0.55 $ 0.82 $ 0.71 $ 0.92 $ 0.82 $ 0.35 $ 1.35 $ 2.51 - (0.08) - Diluted weighted average shares outstanding 85,960,868 83,705,700 85,880,643 86,267,658 86,451,737 86,116,567 85,065,999 82,176,629 82,291,483 85,911,653 Non-GAAP dilutive shares excluded from GAAP EPS calculation - 2,510,517 - - - - - 466,516 5,072,080 - Pro forma weighted average shares - diluted 85,960,868 86,216,217 85,880,643 86,267,658 86,451,737 86,116,567 85,065,999 82,643,145 87,363,563 85,911,653 These schedules have been derived from, and should be read in conjunction with, our financial statements in our reports on Forms 10-Q and 10-K which are filed with the SEC. Our Forms 10-Q and 10-K may be found on our website at http://ir.guidewire.com/phoenix.zhtml?c=248177&p=irol-sec . †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 for the quarterly and annual periods beginning in the first quarter of fiscal year 2025. 22

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