Guidewire Software Inc (NYSE: GWRE) stock lost over 3% on June 5th, 2019 (Source: Google finance). Total operating expenses were 81.6 million in the third quarter, up from 75.2 million year-over-year. The growth in spend was on the back of the investments in sales and marketing and increases in corporate infrastructure costs. GWRE has ended the third quarter with 1.2 billion in cash, cash equivalents and investments, flat compared to the end of the second quarter.
Gross profit was 94.1 million, representing a gross margin for the quarter of 58% compared to 55% a year ago. The increase in gross margin was due to higher license and subscription mix. Operating cash flow for the third quarter was 26.2 million compared to 20.2 million a year ago. Free cash flow was 15.3 when adjusting for buildout expenses associated with the new headquarters compared to 19 million a year ago.
GWRE in the third quarter of FY 19 has reported the adjusted earnings per share of 18 cents.
The company had reported the adjusted revenue growth of 15 percent to $162.9 million in the third quarter of FY 19, beating the analysts’ estimates for revenue of $154.5 million. License and subscription revenue was 76.2 million. A portion of the better-than-expected performance was due to the ClaimCenter term license deal with a large Japanese customer. Year-over-year license and subscription revenue growth was 45%. Subscription revenue was 14.7 million, compared to 8.6 million a year ago, representing a year-over-year growth rate of 71%. Perpetual license revenue in the quarter was 1.3 million. GWRE had a strong bookings quarter and subscriptions represented 60% of new sales at the upper end of the anticipated range for the year. Maintenance revenue was 21.3 million, which is an increase of 14% from a year ago, and was also above the high end of our guidance range. Services revenue for the second quarter was 65.3 million, a fall of 8% from a year ago due to hosting revenue reclassification and continued investment in the initial cloud implementations.
GWRE expect license and subscription revenue for the year 2019 to be between 379 and 387 million. The company now anticipates total revenue to be in the range of 711 million to 719 million. The company expects non-GAAP net income to be between 112.2 million and 117.2 million.