Guidewire Software, Inc. (NYSE:GWRE) reported fiscal fourth-quarter revenue of $411.1 million, up 15%. Subscription and support revenue increased 32% to $266.7 million, more than offsetting an 18% decline in license revenue to $77.1 million. GAAP operating income reached $62.3 million, compared with $29.6 million one year earlier.
Fiscal 2026 revenue increased 23% to $1.48 billion, while annual recurring revenue, or ARR, grew 19% on a constant-currency basis to $1.24 billion. Guidewire Software, Inc. (NYSE:GWRE) defines ARR as the annualized recurring value in active contracts, including term licenses, subscriptions, support, and hosting. ARR is a company-reported operating metric and may differ from recognized revenue in timing and amount.
ARR was $1.242 billion at July 31, 2025 exchange rates and $1.237 billion at July 31, 2026 rates.
Bull Case
The revenue mix is becoming more recurring. Fiscal 2026 subscription and support revenue increased 33% to $970.9 million and represented approximately 65.8% of total revenue, up from 60.8% one year earlier. License revenue declined 7% to $234.6 million, but subscription growth more than absorbed the reduction.
Profitability improved alongside greater cloud scale. Guidewire Software, Inc. (NYSE:GWRE)’s fourth-quarter GAAP subscription and support gross margin rose to approximately 74.0% from 68.0%. Full-year GAAP operating income increased to $149.9 million from $41.1 million, consistent with increasing operating leverage.
Operating cash flow increased to $389.7 million from $300.9 million and equaled approximately 26% of fiscal 2026 revenue. Fiscal 2027 guidance of $445 million to $465 million would keep the operating-cash-flow margin near 26.5% at guidance midpoints if achieved.
Fully ramped ARR grew 22% to $1.578 billion at July 31, 2025 exchange rates, or $1.573 billion at July 31, 2026 rates. Guidewire Software, Inc. (NYSE:GWRE) defines fully ramped ARR as recurring value from active contracts including non-variable price increases scheduled during their first five years. The $336 million gap over reported ARR provides contractual growth visibility, although it is not current revenue.
Bear Case
Fiscal 2027 guidance signals moderation. Ending ARR guidance of $1.45 billion to $1.46 billion implies approximately 17.6% growth at the midpoint from the $1.237 billion revalued year-end ARR baseline. Revenue guidance of $1.71 billion to $1.73 billion implies approximately 16.4% midpoint growth, below the 23% recorded in fiscal 2026.
