Hot Tech stock to watch: Guidewire Software Inc (NYSE: GWRE)

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Guidewire Software Inc (NYSE: GWRE) stock rose over 4.4% on September 6th, 2019 (As of 9:38 am GMT-4; Source: Google finance) driven by better than expected results for the fourth quarter of FY 19. For the year, the company had closed nine InsuranceSuite via Guidewire Cloud deals, representing customers of all sizes, including customers from North America and Europe, and with a balanced mix of new and existing customers. The company posted the Operating income of $51.1 million and net income of $46.3 million. GWRE has ended the quarter with $1.3 billion in cash, cash equivalents and investments, slightly higher than the $1.2 billion the company at the end of the third quarter. Operating cash flow for the year was $116.1 million compared to $140.5 million a year ago.

Free cash flow for the year was $90.9 million, excluding $24 million in build-out expenses associated with the new headquarters, compared to $128.4 million a year ago. This was below the expectations due to a customer payment of $12 million scheduled for Q4 but collected after the close of the quarter.

GWRE in the fourth quarter of FY 19 has reported the adjusted earnings per share of 56 cents, while witnessed 13 percent fall in the adjusted revenue to $207.9 million in the fourth quarter of FY 19. License and subscription revenue were $127.7 million versus $143.7 million a year ago. Services revenue for the fourth quarter was $58.3 million.

For the first quarter ending in November, GWRE expects its per-share earnings to range from 1 cent to 5 cents. The company expects revenue to be in the range of $149 million to $153 million for the fiscal first quarter. Analysts surveyed by Zacks had expected revenue of $183.9 million.

GWRE expects full-year earnings to be in the range of $1.10 to $1.22 per share, with revenue is expected to range from $759 million to $771 million. For fiscal 2020, the company expects ARR to grow between 14% and 16%, accelerating from 13% constant currency growth this year. In fiscal year 2020, the company expect fully ramped ARR to continue to grow faster than ARR. GWRE expect annual license and subscription revenue to be in the range of $443 million to $455 million, an increase of 15% to 18% from fiscal 2019, or 18% to 21% adjusted for the 10-year term license deal signed in Q1 last year.

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