Guidewire Software (GWRE) Q2 2026 earnings summary

Executive summary

• Achieved total revenue of $359.1 million in Q2 FY26, up 24% year-over-year, driven by strong subscription and support growth and robust multi-year deal demand.

• Annual recurring revenue (ARR) reached $1,121 million as of January 31, 2026, reflecting 22% year-over-year growth.

• Net income was $60.1 million for the quarter, reversing a net loss in the prior year; non-GAAP net income was $100.7 million, more than doubling year-over-year.

• Raised full-year outlook for revenue, ARR, and operating income based on strong Q2 results and pipeline strength.

• Demand for core modernization and cloud migration is accelerating, driven by generative AI and the need for operational efficiency.

Financial highlights

• Subscription and support revenue grew 33% year-over-year to $237.2 million; services revenue rose 30% to $62.4 million; license revenue declined 7% to $59.5 million.

• GAAP income from operations was $38.4 million, up from $11.7 million; non-GAAP income from operations was $87.4 million, up from $53.9 million year-over-year.

• Gross profit was $243 million (28% growth), with overall gross margin at 68%.

• Free cash flow for the quarter was $105.7 million, up from $82.3 million in the prior year.

• Ended Q2 with $1.35 billion in cash equivalents and investments.

Outlook and guidance

• Raised full-year ARR outlook to $1.229–$1.237 billion (18–19% growth).

• Total revenue guidance increased to $1.438–$1.448 billion (20% growth at midpoint).

• Subscription and support revenue expected at $962–$966 million; services revenue at ~$255 million.

• Non-GAAP operating income guidance raised to $293–$303 million.

• Operating cash flow expected at $360–$375 million; CapEx at $30–$35 million.