Guidewire Software, Inc.

Greetings and welcome to the Guidewire third quarter of fiscal 2026 financial results conference call. As a reminder, this call is being recorded and will be posted on our investor relations page later today. I would now like to turn the call over to Alex Hughes, Vice President of Investor Relations. Thank you, Alex. You may begin.

Thank you, Grace. Hello, everyone. With me today is Mike Rosenbaum, Chief Executive Officer, Jeff Cooper, Chief Financial Officer, as well as John Mullen, President, who will be available for the Q&A portion of today's call. 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 on the investor license section of our website. We have also posted this quarter's earnings deck on the IR section of the site. Today's call is being recorded, and a replay will be available following this conclusion. Statements today include forward-looking ones regarding our financial results, products, customer demand, operations, the impact of local, national, 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 and the risk factors and documents we filed with the SEC, including our most recent annual report on Form 10-K, and our prior and forthcoming quarterly reports on Form 10Q 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 certain 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. Please note that starting this quarter, we have updated our non-GAAP methodology to exclude the impact of unrealized foreign currency exchange rate gains and losses. To ensure an accurate comparison, we have recast all our non-GAAP schedules back to the first quarter of fiscal 2025. A reconciliation of non-GAAP to GAAP measures is provided in our press release. Reconciliations and additional data are also posted at the end of our quarterly earnings deck on our IR website. And with that, I'll now turn the call over to Mike.

Good afternoon. and thank you for joining us today. We delivered another great quarter in Q3 and continue to build momentum across the business. The quarter was highlighted by 11 cloud wins, strong progression in key pipeline deals, and growing customer interest in Pricing Center and our AI platform tooling and ProNavigator offerings. Together, these dynamics continue to strengthen our position as we head into our fourth quarter and and provide a solid foundation for the remainder of this fiscal year and next. From a financial perspective, revenue, profitability, and cash flow all finished ahead of expectations, continuing to demonstrate the strength and durability of our model. ARR in Q3 came in within our guidance range, growing 19% year over year, and fully ramped ARR continues to grow faster than ARR. The bookings results in the quarter were solid, and 19% ARR growth is a great achievement. We anticipated a couple more deals to close in the quarter, but one of the things about Guidewire is that there are a relatively small number of discrete deals each quarter, and sometimes timing doesn't align perfectly with quarterly boundaries. That said, the progress we made in Q3 with respect to pipeline momentum gives me a lot of confidence as we head into Q4, which is one of our largest and most important quarter of the year. As I think about the quarter and the progress we have made so far in our fiscal year, I'm very happy with the momentum and trust we have built in the industry. What stands out is the degree to which insurers are aligning around Guidewire as their long-term core platform partner. Customers increasingly want a complete platform they can trust, something that combines IT agility, an open approach to integration, and amplifies their ability to innovate rapidly. This position has become even more valuable as insurers modernize core systems and look to operationalize the latent benefits AI creates for the insurance industry. During the quarter, we closed 11 cloud deals, including two net new core system wins and five pro-navigator deals. One notable transaction was a seven-year extension and DWP expansion with Auto Club of Southern California for InsuranceSuite on Guidewire Cloud Platform, alongside a significant new sale of ProNavigator. This carrier is investing in Guidewire to support long-term growth while incorporating greater AI-driven capabilities into its operations. We also saw continued momentum from insurers modernizing legacy core systems globally. In Europe, a U.K. insurer, part of a global insurance group, selected Claims Center on Guidewire Cloud Platform as part of a broader modernization initiative designed to simplify and accelerate its technology roadmap. In Brazil, we closed a large strategic net new win with Bradesco Seguros, which selected Guidewire Cloud Platform as part of an effort to consolidate and modernize a significant legacy footprint. This insurer is focused on improving product velocity and accelerating speed to market. And in North America, a large U.S. insurer selected Policy Center on Guidewire Cloud Platform within a commercial insurance entity. We continue to believe these types of transformational core system modernizations represent a durable long-term opportunity for Guidewire, and we were encouraged by the progress we made during the quarter. Beyond core system modernization, we are also seeing increasing traction across newer offerings on the platform. We had three great Pricing Center wins in the quarter, including one with a Swedish insurer, an insurer in Poland, as well as our first U.S. win for Pricing Center at Oklahoma Farm Bureau, which selected the platform to become more nimble in pricing and rating, reduce IT and operational friction costs, and accelerate speed to market. As I previously stated, we also saw continued and building momentum for ProNavigator, which was adopted in the quarter by five insurers spanning multiple sizes and lines of business, as each increasingly looks to embed AI-driven knowledge and workflow automation directly into core insurance operations. In addition to Auto Club of Southern California, ProNavigator was chosen by two regional mutual insurers, as well as a farm and ranch-focused P&C carrier and a workers' compensation insurer. Additionally, our data and analytics offerings continue to gain traction as customers seek to embed more real-time insight throughout the insurance lifecycle. Overall, we're seeing increasing platform gravity around Guidewire, and that's translating into healthy adoption of new offerings across our portfolio. These trends and the broader momentum in the business were reinforced at recent insurance forums we hosted in Europe, Australia, Japan, and Canada. In each of these events, insurers consistently emphasized the same priorities. modernizing core systems, increasing operational agility, and positioning themselves to take advantage of AI in practical and scalable ways. As we said before, GuideWare sits at the center of the insurance enterprise. Our platform manages the core systems of record for policy, billing, and claims, and we continue to expand that foundation into critical business functions like pricing and underwriting through a continuously improving cloud platform. Our platform provides the context insurance companies need to apply AI to real workflows. AI in insurance or any other regulated industry use case depends on trusted data, well-defined workflows, and systems capable of executing decisions reliably at scale, which is exactly what GuideWare provides. With ProNavigator, we have embedded AI decision support directly into the applications and workflows insurers use every day. We help underwriters, claims adjusters, and customer service teams make better decisions through contextual insights, recommendations, and increasingly agentic capabilities integrated into the flow of work. Underpinning all of this is our cloud platform and developer ecosystem, which was the focus of our recent developer summit in Bangalore, India. This event was a real highlight for me for two reasons. First, because of its scale. We had 3,000 people attend, which was double our prior year. And we had people come to Bangalore from all over the world. When we began this event, we just had no idea it would be so popular, and I never imagined that we would have customer development teams from the United States traveling halfway around the world to engage with us in this way. Second was the breadth of AI capabilities involved. We are unlocking on the platform. Connecting these frontier models and tools like Cloud Code to our platform and our MCP servers is unlocking a staggering amount of productivity in our ecosystem. Walking around the event and speaking to the real on-the-ground engineers who are every day translating the requirements of the industry to real solutions was just motivating for me. We are unleashing a productivity tsunami, and the same excitement that people are experiencing with cloud-code-driven software development is now very real on the Guidewire platform, making it possible to build workflows faster, integrations faster, new insurance products faster, new digital experiences faster. And it was just incredible, and everyone in our ecosystem is excited about it. We're also seeing significant and measurable productivity gains internally and across our partner ecosystem through the use of these agentic development tools, which is helping accelerate delivery and implementation timelines. This improvement will accelerate migration and modernization efforts across the industry. We are almost a decade into our efforts to bring the industry a modern cloud platform, and still much of the insurance industry still operates on legacy technology. The insurance companies not operating on modernized core systems will struggle to take full advantage of AI to support the agility and intelligence insurers increasingly require to remain competitive. This reality creates a growing opportunity for Guidewire. By reducing the time, cost, and complexity associated with this modernization, adding AI capabilities, agents, and automation into an open platform, we believe we will expand our addressable market and continue to accelerate our business. And finally, before I turn the call over to Jeff, I wanted to quickly mention an important leadership transition in our sales org. After an incredible career as an enterprise sales leader in the software industry, David Laker has decided to step away from his role as chief commercial officer and transition into a new position focused on strategic partners and initiatives. David will continue his current role through the end of the fiscal year. And to ensure a smooth transition, I'm excited to announce that Shane Cassidy is joining Guidewire starting today and will formally assume Chief Commercial Officer responsibilities after the end of our fourth quarter. Shane is a proven insurance industry leader and has been instrumental in partnering with Guidewire in helping grow our business over his 20-year career at Capgemini. where most recently he was the Executive Vice President of the Global Insurance Practice. The Chief Commercial Officer role will continue to report to John Mullin, and we anticipate that Shane will build on the strong sales discipline and execution that David's established. We're pleased to have Shane on board, and I'm excited to work with David in his new capacity next year. And with that, I'll turn it over to Jeff.