Guidewire Software Posts Upbeat Q4 Results, But Issues Weak Forecast

reported better-than-expected results for its fiscal fourth quarter. However, the company provided issued a weak forecast for the current quarter and full year. The Foster City, California-based company reported a quarterly profit of $11.9 million, or $0.16 per share, versus a year-ago profit of $19.8 million, or $0.28 per share. Excluding items, the company's adjusted earnings slipped to $0.35 per share from $0.37 per share. Its revenue fell 6.5 percent to $125.9 million. However, analysts were expecting earnings of $0.26 per share on revenue of $122.48 million. Total license revenue, including term and perpetual licenses, rose 11 percent year-over-year to $73.4 million for the fourth quarter, while term license revenue gained 16 percent to $68.6 million. Revenue from perpetual licenses dropped 27 percent to $4.8 million. Maintenance revenue gained 10 percent to $13.2 million, while services revenue dropped 3 percent to $39.4 million. Its operating income declined to $23.5 million for the fourth quarter, versus $26.4 million in the year-ago quarter. At July 31, 2015, Guidewire had $677.8 million in cash, cash equivalents and investments, versus $647.8 million at July 31, 2014. "Fiscal year 2015 and fourth quarter revenue and profitability exceeded our expectations," said Marcus Ryu, chief executive officer, Guidewire Software. "We initiated multiple new relationships with large domestic and international insurers, including five Tier 1 customers, which we define as insurers which have direct written premiums in excess of five billion dollars, and we expanded multiple relationships to include our newer portal and data management offerings. These developments, along with further traction in cultivating a robust System Integrator partner community, advanced our ambition of becoming the pre-eminent software provider to the global P/C industry and continuing to shift our revenue mix toward recurring licenses." For the year, Guidewire Software expects earnings of $0.54 to $0.63 per share and revenue of $405 million to $415 million. Analysts projected earnings of $0.64 per share on revenue of $416.32 million. For the current quarter, Guidewire Software projects earnings of $0.01 to $0.05 per share and revenue of $78.5 million to $82.5 million. Analysts expected earnings of $0.05 per share on revenue of $85.33 million. Guidewire Software shares fell 5.01 percent to $51.90 in the after-hours trading session.