[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / September 12, 2016 / Active Wall St. announces its post-earnings coverage on Guidewire Software, Inc. (NYSE: GWRE) ("Guidewire"). The company posted its fourth quarter fiscal 2016 (Q4 FY16) and full fiscal 2016 (FY16) financial results on September 07, 2016. The Foster City, California-based company posted higher-than-expected fourth quarter earnings numbers with a 12% y-o-y growth in its total revenue during full-year FY16. Register with us now for your free membership at: http://www.activewallst.com/register/.
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Earnings Highlights
Guidewire reported total revenue of $141.18 million in Q4 FY16 compared to $125.92 million in the prior year comparable quarter. Total revenue topped market forecast of $136.6 million. The company reported GAAP net income of $16.10 million, or $0.22 per diluted share, in Q4 FY16, compared to a GAAP net income of $11.89 million, or $0.16 per diluted share, in the previous year corresponding quarter.
The company's non-GAAP net income came in at $28.70 million, or $0.39 per diluted share, in Q4 FY16 versus non-GAAP net income of $25.67 million, or $0.35 per diluted share, in Q4 FY15. The software publisher's non-GAAP net income also outperformed market expectation of $0.32 per diluted share.
In the year-ended July 31, 2016, the company's total revenue grew to $424.45 million from $380.54 million in FY15. Guidewire's GAAP net income for FY16 came in at $14.98 million, or $0.20 per diluted share, up from $9.89 million, or $0.14 per diluted share, recorded in FY15.
"Revenue and profitability exceeded our guidance for the fourth quarter and fiscal year 2016," said Marcus Ryu, CEO of Guidewire Software, "Our momentum continues to build as new customers join the Guidewire community and as we broaden relationships with insurers of all sizes."
Operating Metrics
The company's non-GAAP gross margin for Q4 FY16 rose to 73.7% from 72.3% in the year-ago period. During the reported quarter, total non-GAAP operating expenses increased 14% y-o-y to $61.4 million. Furthermore, the company's non-GAAP operating income came in at $42.7 million, or 30.3% of total revenue, primarily on higher-than-expected revenue, which carried no associated costs.
For full-year FY16, Guidewire's non-GAAP gross margin improved to 69.4% from 66.0% in FY15, primarily due to the increase in license and maintenance as a percentage of total revenue, modestly offset by lower services and maintenance margins. The company's FY16 non-GAAP operating income also improved to $84.9, or 20% of total revenue, outperforming the company's expectation range of 15% to 17% of total revenue.
Segment-wise
During the quarter, the insurance software suite developer's license revenue grew 20% y-o-y to $88.24 million. The company's license revenue increase 23% on y-o-y basis to $219.75 million in FY16, which was above previously provided guidance range of $211 million to $215 million.
Guidewire's Maintenance revenue grew 29% y-o-y in Q4 FY16 to $16.99 million. In FY16, the company's maintenance revenue was $59.93 million, up 20% on y-o-y basis.
The company's Service segment's revenue, however, fell 9% y-o-y to $35.95 million in Q4 FY16 and was down 4% on y-o-y basis to $144.76 million in FY16.
Cash Matters
Cash flow from operations grew to $99.90 million in FY16 from $63.68 million in FY15. In FY16, the company generated $92.8 million of free cash flow, an increase of 62% on y-o-y basis, primarily attributable to high collections during the year. Guidewire had cash and cash equivalents and investments worth $223.58 million at the close of its books on July 31, 2016, compared to $212.36 million as on July 31, 2015.
Outlook
In its guidance for first quarter fiscal 2017 (Q1 FY17), the company anticipates total revenue to be in the range of $84.5 million to $88.5 million. Guidewire's management forecasts GAAP net loss for Q1 FY17 to be in the range of $0.24 loss per share to $0.21 loss per share. While, non- GAAP net loss is expected to lie between $0.07 loss per share and $0.04 loss per share for Q1 FY17.
For the year ending July 31, 2017, Guidewire forecasts total revenue in the range of $471.5 million to $483.5 million with non-GAAP operating income in the range of $76.0 million and $88.0 million. GAAP net income for FY17 is expected to be the range of $0.01 per share and $0.11 per share. Furthermore, the company's non- GAAP earnings is anticipated to be the range of $0.69 per share and $0.79 per share for FY17.
Stock Performance
At the close of trading session on September 09, 2016, Guidewire Software's stock price declined 1.87% to end the day at $61.42. A total volume of 651.43 thousand shares were exchanged during the session, which was above the 3-month average volume of 476.25 thousand shares. The company's share price has gained 16.17% in the past six months month and 16.39% in the last twelve months.
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