Jun 4, 2026 at 8:39 PM UTC

Guidewire Software: 3Q26 Earnings Deck and Supplemental

Q3 Fiscal 2026 Earnings

June 4, 2026

Statement 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

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 contract1

349

Core customers1

Countries where Guidewire is run

9/10

9 of the Top 10 Global Insurers use Guidewire2

* All data as of FY25

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

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

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

(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

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.

Strong and durable revenue growth

ARR

(in $millions)

19%

14%

Subscription & Support Revenue

(in $millions)

33%

28%

35%

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)

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

* 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

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.

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.

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 $

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)

†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.

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

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

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 %

97.6 %

98.2 %

98.6 %

Non-GAAP gross margin

97.7 %

98.6 %

98.5 %

99.1 %

98.5 %

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 %

3.0 %

2.5 %

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 %

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

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