Guidewire Software Inc (NYSE:GWRE) stock fell 6.67% (As on March 7, 11:23:21 AM UTC-4, Source: Google Finance) after the company missed the earnings expectations for the second quarter of FY25. Subscription and support revenue was $177.8 million, an increase of 35%; license revenue was $63.7 million, a decrease of 10%; and services revenue was $47.9 million, an increase of 26%, each as compared to the same quarter in fiscal year 2024. As of January 31, 2025, annual recurring revenue, or ARR, was $918.1 million, compared to $864.0 million as of July 31, 2024. ARR results for interim quarterly periods in fiscal year 2025 are based on actual currency rates at the end of fiscal year 2024, held constant throughout the year. Non-GAAP income from operations was $53.9 million for the second quarter of fiscal year 2025, compared with $25.7 million for the same quarter in fiscal year 2024. Non-GAAP net income was $43.9 million for the second quarter of fiscal year 2025, compared with non-GAAP net income of $39.1 million for the same quarter in fiscal year 2024. Guidewire had $1,412.4 million in cash, cash equivalents, and investments at January 31, 2025, compared to $1,129.5 million at July 31, 2024. The increase was primarily due to net proceeds of $412.7 million related to the new issuance of convertible notes in October 2024 after the purchase of capped calls and the retirement of a portion of the convertible notes due in March 2025.

GWRE in the second quarter of FY25 has reported the adjusted earnings per share of 51 cents, missing the analysts’ estimates for the adjusted earnings per share of 52 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 20 percent to $289.5 million in the second quarter of FY25, beating the analysts’ estimates for revenue of $285.7 million.

For the current quarter ending in April, Guidewire Software said it expects revenue to be in the range of $283 million to $289 million. For the third quarter of fiscal year 2025, the company expects ending ARR between $942 million and $947 million and Non-GAAP operating income to be between $36 million and $42 million.

The company expects full-year revenue in the range of $1.16 billion to $1.17 billion, ending ARR to be between $1,000 million and $1,010 million, Non-GAAP operating income between $175 million and $185 million and Operating cash flow to be between $230 million and $260 million.