Guidewire Software, Inc.

Greetings and welcome to the Guidewire fourth quarter and full year fiscal 2024 financial results conference call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. A brief question and answer session will follow the formal presentation. As a reminder, this call is being recorded. I would now like to turn the call over to Alex Hughes, Vice President of Investor Relations. Thank you, Alex. You may begin.

Thanks, Paul. I'm Alex Hughes, Vice President of Investor Relations, and with me today is Mike Rosenbaum, Chief Executive Officer, Jeff Cooper, Chief Financial Officer, and John Mullen, President and Chief Revenue Officer, who is joining us to provide a year-end recap of adoption activity. A complete disclosure of our results can be found in our press release issued today, as well as in our related Form 8K, Furnished to the SEC, both of which are available in 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. Statements made on this call include forward-looking ones regarding our financial results, outlook, and targets, our future business momentum relating to our products, cloud deals, customer demand, operations, the impact of local, national, and geopolitical events on our business, our associate business plan and strategy, among 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 our press release and risk factors and documents we file with the SEC, including our most recent quarterly reports on Form 10-Q and our prior and forthcoming annual report on Form 10-K filed and 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 non-GAAP financial measures to provide additional information to investors. All commentary on margins, profitability, and expenses are on a non-GAAP basis unless stated otherwise. 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. And with that, I'll now turn the call over to Mike.

Thank you, Alex. Good afternoon, and thanks, everyone, for joining today. I'm thrilled to have the opportunity to report stellar fourth quarter results capping off what was an incredible year for Guidewire and our community of customers and partners. This quarter marked five years at Guidewire for me, and the results in the quarter and fiscal year feel like a clear validation of the hard work and determination everyone here has contributed to our cloud transformation. We have now established a consistent track record of customer program success with our cloud applications, and we are seeing the maturity and reliability of our cloud platform continue to drive demand from new and existing customers. The referenceability of customers choosing Guidewire Cloud Platform continues to grow, and that reputation continues to drive demand, new sales and adoption, and ultimately customer program success and the associated insurance outcomes the PNC industry demands. The market momentum we've established is clearly reflected in strong ARR and fully ramped ARR growth. ARR was up 14% on the year, while fully ramped ARR accelerated to 19% as we continue to sign larger deals with more significant fully ramped value. We closed 16 cloud deals in the quarter and 42 for the year. John Mullen, our president, will go into more detail on cloud adoption, but I'll just say that the strength across these metrics is a result of the combined efforts of every single member of our global organization. The results this quarter and this year position us well to achieve our $1 billion ARR target this fiscal year. As we continue to drive cloud adoption, we are also seeing greater leverage in our cloud model. Guidewire Cloud Platform is demonstrating greater scale and efficiency with subscription and support gross margins increasing 10 points to over 65% for the year. We feel very confident in our objective to achieve our long-term margin targets as we continue to scale the platform. We are also continually driving better overall company operational discipline and efficiency, generating non-GAAP operating profit of nearly $100 million and operating cash flow of nearly $200 million. We also expect to be GAAP profitable in fiscal 2025. These outcomes clearly demonstrate the power of the software as a service business model we have created here. Looking forward, we are excited to enter the new fiscal year with momentum. We continue to see acceleration in the number of conversations around cloud transitions and modernizations. Customers realize that they need greater agility in their core operations. And based on our track record of references to test stories, we are distancing ourselves from alternatives. As a result, our pipeline continues to build and is very healthy going into the year. In November, we will be back in Nashville to hold our annual Customer Conference Connections, which is attended by 3,000 members of the broader Guidewire community. This will give us another valuable opportunity to showcase the latest innovation on our platform and highlight examples of customer success. I'll finish by saying that this past year and these last five years sometimes seem like a remarkable achievement. We have taken a market-defining on-premise vertical software leader and replatformed it to become a vertical software as a service leader. I have spoken to many people in the past few months. this achievement and our success was somewhat surprising. But looking back now, it all looks pretty logical to me. We made a straightforward plan that made sense, required nothing miraculous, and focused on execution, all the while ensuring that every single customer who chose to trust us never doubted their decision. We are not and will never be perfect, but we will continue to prioritize our customers and the programs they run on our platform. We will continue to optimize our technical decisions for the long term, and we will strive every day to earn the trust our customers place in us. We are right now very well aligned with our customers and in a unique position to help shape the future of the industry we serve. We continue to execute in the fashion we have demonstrated over the past few years, and I'm confident we will continue to hit the forward-looking objectives we set for ourselves. With that, I'll hand it over to John to provide a year-end perspective on the insurance industry and discuss in more detail around customer adoption and success on the Guidewire cloud platform.