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. It has also yielded tremendous financial results this year with both ARR and fully ramped ARR growth rates accelerating. ARR in fiscal 2025 grew 19%, and fully ramped ARR grew 22% on a constant currency basis. First, demand for the Guidewire Cloud Platform is strong and continues to grow.
Q4 was a record quarter driven by deal volume, deal size, and a milestone win for our company. This durable demand environment is being driven by the success and referenceability of our cloud customers, which continues to generate great engagement and conversations with insurers of all sizes across all worldwide regions. Our acquisition of Quanti is a great example of this, where we believe we can modernize pricing operations and product management across the industry and, as a result, help insurers grow. By combining mission-critical core systems of record with cloud-native services and modern APIs, we're in a position to focus directly and incrementally on these new applications that I think will genuinely improve the industry.
As Mike said, it was another record quarter and fiscal year for Guidewire Software. We continued to see growing demand, signing 19 core cloud deals in Q4, totaling 57 for the year, representing healthy annual growth in deal count. Our European team closed two meaningful deals in the quarter, bringing their total for the year to 11, which shows a great return on the investments we've made in Europe. In Latin America, we saw a sharp increase in market momentum, closing three deals in the fourth quarter.
| Metric | Period | Current guidance |
|---|---|---|
| ARR | FY2026 | $1.21B-$1.22B (~17% CC growth at midpoint) (+~17% growth guided) |
| Total revenue | FY2026 | $1.385B-$1.405B (Growth guided) |
| Subscription revenue | FY2026 | ~$888M (~34% growth) (+~34%) |
| Subscription & support revenue | FY2026 | ~$945M (Growth; support to decline ~$7M) |
| License revenue | FY2026 | Decline of over $30M (-$30M+) |
| Services revenue | FY2026 | ~$232M (More modest growth) |
| Subscription & support gross margin | FY2026 | 71%-72% (+1-2 pts) |
| Non-GAAP operating income | FY2026 | $259M-$279M (Growth guided) |
| Cash flow from operations | FY2026 | $350M-$370M (Growth guided) |
| Metric | YoY | Note |
|---|---|---|
| ARR | +19% (constant currency) | Strong sales activity and record-low ARR attrition; surpassed $1B milestone |
| Fully ramped ARR | +22% (constant currency) | Increased willingness of insurers to make large, ramped commitments |
| Total cloud ARR | +36% | Cloud products plus customers contracted to move to cloud; now 74% of total ARR |
| Subscription revenue | +40% | Continued cloud migration and bookings |
| License revenue | +1% | Healthy direct written premium and CPI adjustments, offset by migrations to cloud |
| Services revenue | +21% | Strong utilization balanced with SI community partnership |
| Operating income | +109% (to $208M) | Higher revenue and improving cloud/services margins, partly offset by higher bonus accruals |
| Subscription & support gross margin | +4 pts (to 70%) | Cloud platform scaling well |
| Services gross margin | +6 pts (to 13%) | Improved billable utilization and successful cloud program outcomes |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Tier 1 cloud adoption | — | Nine Tier 1 deals in Q4 plus landmark Liberty Mutual 10-year ClaimCenter+PolicyCenter commitment; full-suite conversations increasing | Accelerating |
| Durable ARR growth profile | Historical mid-teens growth | 19% in FY2025, guiding 17% FY2026; elevated growth seen as potentially durable | Moving up |
| AI and analytics (act three) | — | Data/analytics growing faster than core; Quanti pricing acquisition, Industry Intelligence claims models; agentic AI seen as lift to core demand | Emerging investment focus |
| ARR attrition | — | Lowest on record; no large M&A churn events, strong customer-success focus | Improving |
| Cloud margin trajectory | — | Subscription/support gross margin at 70%, ahead of schedule; FY2026 guided 71-72% with confidence in long-term targets | Improving |
| Partner ecosystem / marketplace | Marketplace launched 2021 | Over 300 third-party apps, 200+ technology partners, SI community up 11% to 27,000+ professionals | Growing |