Guidewire Software Inc(NYSE: GWRE) stock is trading firm today, rising over 6.6% on March 7th, 2018 (As of 11:45AM EST; Source: Google finance) leading to the total increase of over 24.9% in the last three months.
The group reported a better than expected revenue and non-GAAP profitability performance for the second quarter wherein revenue rose 42% yoy to $163.8 million. License and other revenue surged 31% yoy to $84.2 million against pcp. Cloud solutions adoption was ongoing among new as well as current customers. Meanwhile, the subscriptions comprised 43% of the overall new sales. Maintenance revenue was better than the forecasts which reached $19.1 million, rising 15% against pcp. The group’s rolling fourth quarter recurring revenue, consisting of term license, subscription and maintenance revenue reached $345.9 million in the second quarter, rising 21% from a year ago.
Services revenue delivered an outstanding performance during the second quarter of 2018, rising 73% yoy to $60.5 million, against surpassing the guidance range. InsuranceNow implementation contribution and hosting services revenue coupled with the acquisition of ISCS drove the overall performance. The overall deferred revenue rose to $130.9 million as at the end of the second quarter, as compared to $111.2 million as at the end of the first quarter.
For 2018, the group expects the overall revenues to be in the range of $644 million to $650 million, which is a $11 million rise as compared to the midpoint of their earlier outlook, and a rise of 25% to 26% from fiscal 2017. The group forecasts annual license and other revenue to be in the range of $304 million to $312 million, which is a rise of 12% to 15% from fiscal 2017 on a reported basis.
The group sees demand from Tier 1 carriers which are also considering cloud-based approaches for growth initiatives and new lines of business creating. Accordingly, they see a future option to transitioning their current books of business to the cloud.
The group saw a positive sales activity during the quarter, while enjoyed a mix of activities from both new as well as current customers. In North America, InsuranceSuite was by UPS Capital, which offers financial and insurance services to UPS clients and Commonwell Mutual, an Ontario-based mutual that provides residential, auto, farm and commercial insurance. The group’s InsuranceSuite also won Franklin Mutual, a New Jersey-based personal and commercial lines insurer, which sold exclusively through independent agents. They licensed their software to new customers, like Federated Insurance, a $1.6 billion commercial insurer, as well as expanded their relationship with Royal & Sun Alliance and Promutuel in Canada.