Guidewire shares slide despite earnings beat as growth outlook falls short

Guidewire Software shares fell about 20% on 4 September after the insurance software company reported stronger-than-expected fourth-quarter results but issued guidance below market expectations.

Fourth-quarter revenue rose 15% to US$411 million, while adjusted earnings reached US$0.99 a share. Guidewire forecast fiscal 2027 ending annual recurring revenue of US$1.45 billion to US$1.46 billion, implying growth of about 18%, compared with 19% in fiscal 2026.

First-quarter revenue guidance of US$372 million to US$378 million was below an estimated US$395 million, according to the supplied account. The reaction came after the stock had risen about 20% in the preceding month and was trading at a reported price-to-earnings ratio near 99.

Guidewire provides cloud software for property and casualty insurers, including policy administration, documents and claims. Its InsuranceSuite platform generates recurring subscription revenue, and the company said more than half of the new annual recurring revenue in its outlook was already under contract, with rollout dates confirmed.

The company continues to hire, with its workforce reaching roughly 4,066 employees, according to Revelio Labs. Guidewire also reported that Nationwide agreed to move all its software to the cloud, while MAPFRE US and AF Group expanded their use of the platform.

The results highlight the gap between Guidewire’s ongoing investment and the market’s demand for faster growth. Whether hiring and contracted deployments translate into stronger recurring-revenue growth remains uncertain.