Guidewire Software, Inc.

Guidewire Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A 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. Please note that this conference is being recorded. I will now turn the conference over to your host, Alex Hughes, Vice President of Investor Relations at Guidewire Software, Inc. You may begin.

Thank you, operator. Good afternoon and welcome to Guidewire Software's earnings conference call for the third quarter of fiscal year 2022, which ended on April 30th. My name is Alex Hughes. I'm Vice President of Investor Relations. With me on the call today is Mike Rosenbaum, Chief Executive Officer, and Jeff Cooper, Chief Financial Officer. A complete disclosure of our results can be found in our press release issued today, as well as in our related form, AK, furnished to 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 this call. Statements made on this call include four looking ones regarding our financial results, products, customer demand, operations, the impact of COVID-19, and geopolitical events 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 of any subsequent date. Please refer to the press release in risk factors and documents we file with the SEC, including our most recent annual report on Form 10-K and our quarterly report on Form 10-Q to be filed 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 the supplement on our IR website. And so with that behind us, I will now turn the call over to Mike.

Thanks, Alex. Good afternoon, and thanks for joining us today. I'm excited to begin by saying that Q3 was another great quarter for us. We exceeded expectations on ARR and revenue as we continue to see strong interest and momentum in Guidewire Cloud. We continue to make progress on our cloud product offerings and see demand from existing and new insurers all over the world. We serve customers and an industry that is remarkably resilient. And that fact, combined with our product momentum, should serve us well through this period of economic uncertainty. As most of you already know, we serve the property and casualty insurance sector, a $2.5 trillion global industry that sells a wide variety of essential products indemnifying individuals and businesses against all sorts of risks. Many insurance products are non-discretionary, which contributes to industry resilience during periods of economic uncertainty. We serve this industry with mission critical, indispensable systems of record sold in a recurring revenue model. Most of our customers have been in business for decades and some for over a century. They have demonstrated an ability to weather down markets, periods of inflation, and periods of macroeconomic uncertainty. This is an important and durable industry, and I'm proud of the role Guidewire plays in supporting it and thankful for the stability it provides our business model. In the third quarter, we continue to see strong sales momentum for Guidewire Cloud, with Cloud again comprising approximately 90% of our bookings. We closed eight cloud deals in the quarter, bringing our year-to-date total to 24. I was particularly pleased to see sustained cloud momentum with Tier 1 and Tier 2 insurers, as larger insurers gained greater confidence in Guidewire Cloud. We added three deals at Tier 1 insurers in the third quarter. This included Cincinnati Financial Corporation, a top 25 insurer in the United States as measured by DWP, and a new Guidewire customer. We also added National Indemnity as a new cloud customer. National Indemnity is an existing on-premise claim center customer, and we are thrilled that they decided to modernize their policy and billing systems with Guidewire Cloud. The momentum we're experiencing with tier one customers is reflected in the fact that we've had a total of eight tier one cloud wins so far this fiscal year. We're also pleased to see this cloud adoption remain healthy and balanced across existing and new customers. Momentum with existing customers in the third quarter was driven by two more cloud migrations at both Santam and San Cristobal and four more cloud expansions. Santam is our first cloud customer in South Africa and San Cristobal our first in South America. So it's exciting to see our cloud model and strategy continue to play out internationally. We also added two new cloud customers, including previously mentioned Tier 1 Cincinnati Financial and a new InsuranceNow customer. Finally, I was pleased to see 20 deals in data and analytics during the quarter, including two meaningful deals for science and another 18 for HazardHub, as insurers increasingly seek better real-time data throughout their policy and claims workflows. The HazardHub integration is going extremely well. and we are seeing strong cross-sell success with HazardHub, reflected both in the number of deals and also deal size. Also in the quarter, one of the largest reinsurers in the world adopted HazardHub. Turning to our cloud deployment activity, we continue to see healthy progress in the number of go-lives. These are large, complex projects, and with each successful deployment, we deepen our learning and expertise. In the third quarter, we added five customer go-lives. including four with InsuranceSuite and one with Claim Center. This brings the total number of cloud go-lives to date to 59 across InsuranceSuite and InsuranceNow. In addition to our cloud deployments, one of the largest insurers in the world went live with a significant line of business on PolicyCenter as part of their self-managed implementation. As I said earlier, Guidewire deployments are large and complex projects, so it's important that we foster a deep and talented partner community. that can be leveraged across the growing number of cloud implementations. And we continue to make great progress on this front. The number of Guidewire cloud certified consultants increased 169% year over year to nearly 4,400 as the partner community continues to align around our cloud first strategy. There are now 18,000 total consultants from SI partners of 42% year over year that our customers can draw from. We also continue to grow our valuable solution partner community, where we added eight new solution partners this quarter, bringing our total to over 150. Each new application on our marketplace enables our customers to more easily leverage innovation from across our ecosystem. In Q3, we also launched Elysian, our fifth Guidewire Cloud Platform product release. It provides the flexibility and agility insurers need to deliver innovation faster to their customers. Elysian delivers new innovations supporting accelerated speed to market, better risk insights, an embedded insurance solution, and an elevated developer experience. We are all feeling great about our product momentum and our ability to establish this new release pattern with our cloud customers. In summary, we're excited about our momentum heading into Q4, which is reflected in our guidance for the year, which Jeff will share on today's call. But I'll just add that we are pleased with the operational progress we're making and believe that we are positioning ourselves to drive profitable and durable long-term growth. We have a strong foundation and a stable customer base that is resilient to market fluctuations and a product that creates world-class customer retention. As insurers increasingly embrace cloud, the success we have demonstrated to date sets us up to drive further cloud adoption from customer migrations, expansions, and new modernizations. And with that, I'll turn it over to Jeff.