Episode Details

Guidewire (GWRE) Q4 FY2026 — Shares finished at $202.86 the session the print landed after, and have traded near $171.14 since — down about 15.6%. Guidewire beat on both lines and closed its best fiscal year ever — revenue up 22.7%, GAAP operating income up from $41M to $150M, subscription gross margin from 68% to 74% — and then guided fiscal 2027 to about 102 basis points of adjusted margin expansion against the 572 it just delivered, on 16% growth instead of 23%. THE CALL: BEARISH (2/5, LOW-MODERATE) — base-case value ~$138.38 vs ~$171.14 today. KEY METRICS: - Q4 revenue $411.1M, +15.3% YoY; FY2026 revenue $1,475.4M, +22.7% - Q4 subscription & support $266.7M, +32.1%, gross margin 74.0% vs 68.0% - Q4 license revenue $77.1M, -17.7% YoY, at a 99.3% gross margin - Q4 services gross profit -$4.2M, a loss, vs +$1.8M a year ago - Q4 GAAP operating income $62.3M (15.2%) vs $29.6M (8.3%); non-GAAP $111.3M (27.1%) - Q4 GAAP diluted EPS $0.38 vs $0.60; non-GAAP $0.99 vs a $0.93 consensus bar - FY2026 non-GAAP operating margin 23.04% vs 17.32% — +572 basis points - FY2027 guide: revenue $1,707-1,727M (+16.4% mid), non-GAAP operating income $403-423M (~+102 bps) - Q1 FY2027 revenue guide $372-378M = +11.8% to +13.6% on Q1 FY2026's $332.6M - ARR $1,242M +19% cc; fully ramped ARR $1,578M — a $336M signed-but-not-yet-billing gap - FY2026 buyback $606.3M (4,085,350 shares at $148.41) against $181.8M of stock comp; diluted count -0.6% - Our fair value $146.16 vs ~$171.14 since the print (bear $85.22 / base $138.38 / bull $222.68) - Wall Street median target $210 across 11 dated marks, every one set before this print What to watch: Q1 FY2027 services gross profit returns to positive while subscription revenue still grows near 28%, and ARR lands at or above the top of the $1,253-1,259M guide Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.