Guidewire Software, Inc.

Greetings and welcome to the Guidewire First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alex Hughes. Thank you, Alex. You may begin.

Thank you, Operator. Good afternoon, and welcome to Guidewire Software's earnings conference call for the first quarter of fiscal year 2021, which ended October 31st. My name is Alex Hughes. I am vice president of investor relations, and with me on this call is Mike Rosenbaum, Guidewire's chief executive officer, and Jeff Cooper, chief financial officer. A complete disclosure of our results can be found in the press release issued today, as well as in our related form, 10Q and 10K, filed with the SEC, both of which are available on the investor relations section of our website. Today's call is being recorded and a replay will be available following the conclusion of the call. This call includes forward-looking statements regarding financial results, products, customer demand, operations, and the impact of COVID-19 on our business and other matters. These statements are subject to risks, uncertainties, and assumptions and are based on management's current expectations as of today and should not be relied upon as representing our views as any subsequent date. Please refer to the press release and the risk factors and documents we file with the SEC, including our most recent annual report on Form 10-K and our quarterly report filed on Form 10-Q with the SEC for information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. We also will refer to certain non-GAAP financial measures to provide additional information to investors. A reconciliation of non-GAAP to GAAP measures is provided in our press release Reconciliations and additional data are also posted in a supplement on our IR website. With that, I will now turn the call over to Mike.

Thanks, Alex, and thanks, everyone, for joining us today. We are all very excited with our start to the fiscal year and feel great about the momentum we have established in our business. Q1 is typically a quiet quarter for us, and coming off a strong fourth quarter, we were happy to see both ARR and revenue coming above the high end of our guidance ranges. More importantly, we made significant progress in all key areas of our business, specifically further strengthening our cloud momentum and executing our Connections Customer Conference, which as you know, was done as a virtual event this year. We believe we're well positioned for the year and well positioned to continue to execute on our mission to be the platform PNC ensures trust to engage, innovate, and grow efficiently. Before getting into the details of our first quarter, I'd like to take a step back to review the unique position Guidewire has established in the pursuit of this mission, the opportunity we see ahead with Guidewire Cloud, and what we're focused on to continue driving successful customer outcomes in the P&C industry. Since our inception, we have focused on serving the more than $2 trillion global property and casualty insurance industry. Over the last 19 years, we've established ourselves as the most capable and complete PNC platform in the world. Many of the largest insurers in the world rely on Guidewire software to support the most complex and robust environments and to do so at scale. Today, we touch approximately 20% of the industry's direct written premium with at least one of our core products. And we've completed over 1,000 implementations at over 400 PNC insurers. While this penetration is impressive, these metrics also inform us that there is still considerable white space available and considerable opportunity for both Guidewire and especially our customers. We believe the imperative for modern core technology in the PNC industry is stronger than ever. To stay competitive, PNC insurers are responding to rapidly evolving policyholder and agent expectations. by rethinking customer interactions with user-friendly digital experiences. Insurers are also looking to technology to help them grow by bringing new insurance products to market and expanding geographically. Insurers need to do these things as quickly and efficiently as possible with effective IT and enterprise systems all optimized through modern data systems and analytics which make machine learning and artificial intelligence powered solutions possible. We believe this imperative presents a tremendous opportunity for Guidewire, and specifically Guidewire Cloud, which brings a new level of speed, agility, and ease of upgrade to insurers. As we help leading P&T insurers modernize and innovate, We are executing on multiple vectors, including delivering a six-month release cycle that enables customers to adopt new capabilities faster, accelerating our cloud momentum with each new cloud win and successful go-live, and growing our industry-leading ecosystem of partners and marketplace applications. We continue to make great, steady, and determined progress in each of these areas. A measure of that progress can be seen in our recently held customer conference Connections Reimagined, where we welcomed over 7,700 registered members of the PNC community. At the event, we announced the release of Banff and showcased customer stories in more than 65 online sessions, which have already been viewed over 50,000 times, making it by far the biggest event in our history. Banff demonstrates the reality of our new six-month release cycle and builds on the cloud-native services introduced in Aspen and the Guidewire Cloud Platform. In Banff, we've introduced a number of new capabilities that cloud customers can benefit from now. Advanced Product Designer, which empowers insurers to build, deploy, and manage insurance products quickly, has added new APIs to support integration with third-party systems, additional cloud-native services, and science risk insights. We unveiled a new developer program available at developer.guidewire.com, which represents our first step towards better supporting the unique needs of the tens of thousands of developers in the Guidewire community. We announced Cloud Direct, a new breakthrough program that allows the vast majority of our current on-premise customers to upgrade directly to Guidewire Cloud. The transition expense required to upgrade to Guidewire Cloud has been discussed here previously, and Cloud Direct is a tangible example of the investment and development we are focused on to accelerate our cloud transformation by making the process faster, easier, and less expensive for our customers. Banff was also a major release for InsuranceNow, where we introduced a new consumer sales portal and extended our marketplace program so it can support InsuranceNow. This announcement aligned with the introduction of a number of partner apps for InsuranceNow customers and is a very important signal of things to come as we gain more and more engineering and business leverage from the combination of InsuranceNow and InsuranceSuite. Finally, we outlined our ability to help insurance carriers unlock more value and insight through closed loop analytics. Our customers can now access their own core data through Guidewire's cloud data platform. generate contextual insight, then enrich that insight through behavioral data captured in science's data listening engine, and finally, apply predictive analytics to the combination, allowing everyone in an insurance company to make better decisions at every step in the insurance lifecycle. The system is designed to absorb these insights and adjust them over time, making the system smarter with usage and time in a closed loop cycle. Connections also gave us an opportunity to outline our vision for Cortina and future releases. One highlight was claims autopilot, a new approach to claims management and automation that will leverage AI, analytics, and digital to enable an automation-first approach to claims handling and claim center. In the last year, we have spent a high percentage of our focus on the policy side of our product suite, And I'm very excited about our potential to also radically improve customer efficiency and experience in the claim side of our customers' businesses. Connections was also a great opportunity to hear from our customers. We heard from Pekin Insurance, who's using our analytics platform to improve speed to market and create predictive model-driven pricing. Pekin realized that to grow efficiently, they needed analytics capabilities that are integrated with their core platform. and with Guidewire achieved double digit improvements in their loss ratio. We also heard from Aviva Italy who described their ambition to significantly grow their PNC market share by leveraging the latest digital technology to rethink insurance from a customer's perspective. Massif in France is another insurer focused on transforming their business to one that is customer centric by upgrading from decades old in-house systems to Guidewire Cloud for a seamless customer experience across all their lines of business. And finally, we heard from USAA, where we are playing a key role in a modernization journey that leverages Guidewire Cloud to better serve their members in an agile and flexible way by using the best that the industry has to offer and position themselves for the next 100 years. Q1 was also a very important quarter for us with customer deployments. We saw 18 customers go live on implementations for 45 Guidewire products, including 11 insurance suite cloud product go-lives at seven customers. A handful of notable events include TD Insurance, part of TD Bank Group, successfully went live on Claim Center in the cloud, which was a large joint effort and an important reference customer in Canada. This is just the first leg of our journey with TD, as we now turn our attention to the Policy Center and Billing Center projects. Mobilitas Insurance, a wholly owned subsidiary of CSAA Insurance Group, went live with Policy Center and Billing Center less than four months after signing the cloud agreement in Q4, and is now our third production customer on the Guidewire Cloud Platform. Toggle, a member of the Farmers Insurance family, went live on Claims Center via the Yasmin release of Guidewire Cloud Platform. They were our first customer to go live in production on the Aspen release. Additionally, a tier one insurer went live on Guidewire cloud platform via Aspen with a greenfield deployment that is part of a much larger Guidewire cloud modernization. And finally, just this month, cooperative insurance companies went live on insurance now with commercial farm, farm umbrella, and personal umbrella lines. Turning to new sales activity in the quarter, Church Mutual Insurance, an existing on-premise customer, selected Claim Center on Guidewire Cloud as the first step in their migration to cloud. In addition, Buckle Insurance, a startup insurer offering policies specifically built for rideshare drivers, adopted Guidewire Claim Center. Notable expansions in the quarter include a Tier 1 specialty insurer broadening its use of Claim Center to include the London market, Colonnade purchasing our digital products, and Safety Insurance adding digital capabilities to supplement their use of Claim Center. I'm also pleased to see our partner ecosystem continuing to grow. In the area of systems integrators, which continues to be an important contributor to our increasing market leadership, we ended the quarter with approximately 730 consultants from 28 partner companies who have now earned the advanced certifications required for Guidewire Insurance Suite Cloud implementations. This is up from approximately 620 just three months ago, and we believe that this growth continues to be an exciting proof point for the opportunity our SI partners see in the future of Guidewire Cloud. We are also seeing great momentum with our marketplace partners. Innovation beyond Guidewire is a true measure of a platform, and our open API-first approach enables InsurTechs to innovate on top of our platform and for customers to more easily build these innovations into their core workflows. Today, there are over 600 applications offered from Guidewire and 95-plus partners that enable customers to engage, innovate, and grow efficiently. This quarter, we also invested in two exciting InsurTechs. San Francisco-based Hover, who has developed a smartphone app, which accurately produces 3D exterior property models and is used to dramatically improve the homeowner's claim experience. and Denver-based FlyReel, who has developed an AI-assisted inspection solution for underwriting, loss control, and claims management of residential and commercial property. We expect to continue to make similar investments to accelerate innovation and develop an even more robust ecosystem on and around our cloud platform. In addition to attracting the attention of insurers, partners, and marketplace participants, we continue to gain visibility and accolades in the industry analyst community. Forrester Research recently recognized Claims Center in their Forrester Wave for claims management systems. Claims Center received the highest score in the current offering and strategy categories, as well as the highest market presence score, reflecting the size of our customer base and our growth. In addition, for the sixth time in a row, Gartner has named InsuranceSuite as a leader in its magic quadrant for PNC core platforms for North America. It's very gratifying and validating to see independent analysts recognize our platform and the customer success it consistently delivers. In summary, this is an exciting time for Guidewire with a lot of activity as customers seek to leverage technology to engage, innovate, and grow efficiently. The transformation of our customer base and ecosystem to the cloud is key to this. By combining the deep end-to-end capability of Guidewire with the benefits of cloud, We are offering tremendous value for our customers and further advancing our global leadership position. We are making excellent progress in important areas as we execute on this mission, and we look forward to sharing more proof points and successes as the year plays out. Now I'd like to turn the call over to Jeff for more details on our financial results and our outlook for Q2 and the rest of the year. Jeff?