Guidewire Software(GWRE 0.39%) reported Q4 2025 earnings on September 4, 2025, with annual recurring revenue (ARR) rising 19% year over year (YoY) to $1.032 billion in fiscal 2025 (period ended July 31, 2025), and fully ramped ARR up 22% YoY, exceeding $1 billion for the first time. Q4 fiscal 2025 featured a landmark ten-year cloud commitment with Liberty Mutual, strengthening long-term revenue visibility and affirming cloud leadership. This summary highlights management’s insights on cloud migration momentum, platform ecosystem advantages, and strategic innovation around analytics and AI.
Cloud ARR and margins surge at Guidewire
The cloud transition continues to accelerate, with double cloud ARR—which includes all cloud products and migrations—growing 36% year over year to comprise 74% of total ARR in fiscal 2025. Subscription and support gross margin (non-GAAP) improved to 70%, up four percentage points year over year in fiscal 2025, as the cloud install base expanded rapidly.
"Double cloud ARR, which includes ARR for all of our cloud products and for customers that have contracted to move to the cloud, grew 36% year over year and comprised 74% of total ARR. Total revenue for the year was $1.2 billion, ahead of our expectations due to strong performance across all components of revenue. Subscription revenue finished the year at $667 million, up 40% year over year. Subscription and support revenue was $731 million, up 33% year over year. Despite the strong cloud migration activity we have seen, license revenue for the year was $252 million, up 1% year over year. Due to healthy direct written premium and CPI adjustments. As migrations continue to accelerate, it will positively impact subscription revenue because license revenue to decline over time. Services revenue finished at $219 million, up 21% year over year. We experienced strong services revenue growth as we worked to balance healthy utilization for Guidewire resources with continued strong partnership and alignment with the SI community on cloud programs. I think we achieved a healthy balance this year, and the team has done a great job managing this part of our business. Turning to profitability for the fiscal year, which we will discuss on a non-GAAP basis, gross profit was $789 million, up 28% year over year. Overall gross margin was 66% compared to 63% a year ago. Subscription and support gross margin was 70%, up four percentage points year over year. Services gross margin was 13% compared with 7% a year ago. We improved billable utilization rates and continued to achieve successful outcomes with cloud programs. Implementation programs are benefiting from predictability and efficiency. Platform maturity combined with more experience with cloud is improving outcomes."
-- Jeff Cooper, CFO
With 74% of ARR now derived from cloud offerings in fiscal 2025, Guidewire reported higher overall, subscription, and support gross margins compared to the prior year.
Landmark ten-year Liberty Mutual deal expands Guidewire’s tier one presence
Guidewire completed 19 core cloud deals in Q4 fiscal 2025, including a landmark agreement with Liberty Mutual, a major U.S. property and casualty (P&C) insurer, migrating from on-premises to the Guidewire Cloud Platform and committing for a decade. Guidewire also signed nine deals with tier one brands, driving broader adoption and platform “referenceability” across global insurance leaders.
"Q4 was a record quarter driven by deal volume, deal size, and a milestone win for our company. Liberty Mutual, a major tier one insurer, chose to migrate their on-premise claim center instance to the cloud and also made a ten-year commitment to Guidewire to adopt PolicyCenter on our Guidewire cloud platform. This is one of the most strategic partnerships in our history. Everything we have been talking about in prior quarters about platform maturity, referenceability, and flexibility really played out to drive this win. And the overall results this quarter."
-- Mike Rosenbaum, CEO
The Liberty Mutual win also serves as a proof point for large-scale cloud migrations.
Data, analytics, and AI investments fuel Guidewire’s next growth phase
Sixteen core deals in Q4 fiscal 2025 included analytics or data modules, while the acquisition of Quanti enhanced pricing operations expertise. Management highlighted expansion into underwriting, pricing, and claims automation through new data-driven and generative AI-enabled products, leveraging Guidewire’s cloud-native infrastructure and ecosystem model to drive differentiated innovation.
"Act three is all about data and analytics and more innovative application use cases that we can uniquely build. I just think I would position this all around this strategic position we are in. You know, we have an access and permission from an incredible customer base to apply these innovative use cases to positive insurance outcomes that I think is very unique in the world. And we are very, very excited to go attack that opportunity. And it is honestly just complete luck. You know, we did not plan it. But generative AI creates this incredible opportunity to differentiate these applications and bring additional value to an industry that I think is traditionally just, you know, less structured, less automatable. But with generative AI, there is so much potential for us to improve the efficiencies that underlie a lot of these workflows in the industry, and we are very, very excited about it."
-- Mike Rosenbaum, CEO
With robust cloud penetration and a large install base, Guidewire holds a unique position to embed advanced analytics and AI throughout the insurance value chain, and it continues to see strong traction with analytics and data offerings attached to core deals, as well as broader product adoption.
Looking Ahead
Management projects fiscal 2026 ARR of $1.21 billion-$1.22 billion (up 17% YoY at the midpoint), total revenue of $1.385 billion-$1.405 billion, and subscription and support revenue of approximately $945 million. Subscription and support gross margins are expected to improve further to 71%-72%, with total gross margin (non-GAAP) guided at 66%, non-GAAP operating income between $259 million and $279 million, and operating cash flow of $350 million-$370 million. No changes were communicated regarding on-premises support timelines, and Guidewire plans to detail strategic innovation initiatives further at the Connections conference in October.
