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What changed in Guidewire Software, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Guidewire Software, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+458 added−479 removedSource: 10-K (2025-09-11) vs 10-K (2024-09-16)

Top changes in Guidewire Software, Inc.'s 2025 10-K

458 paragraphs added · 479 removed · 364 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

69 edited+22 added−29 removed37 unchanged
Biggest changeThe most significant changes include: • an industry rapidly going through change that requires agility and efficiency from its core systems; • an increase in catastrophes and natural disasters impacting the P&C insurance industry that requires agility and efficiency from its core systems; • a rise in customer expectations for digital, mobile, and omnichannel interaction rather than the traditional agent model; • a need for 100% digital engagement capabilities; • a growth in demand for personalized services and products; • an increase in technology and market-driven changes in vehicular risk, including usage and driving habit based insurance; • an increase in consolidation of providers of insurance products and associated rationalization of markets served given recent claims ratio trends and developments; • demand for coverage of emerging risks such as terrorism, cybersecurity, pandemic, and reputational risk; • a wealth of data and desire to harness data to improve and grow business; • advances in the use of data and analytics to better market to and engage with customers, price policies, and manage claims; Table of Conten t s • development of opportunities to compete or partner with non-traditional players that offer disruptive technology-based value propositions; • established industry leaders are facing increased competition from new entrants in the market, including insurtech companies; and • the introduction and leveraging of new technologies, such as drones, generative AI, large language models, the “Internet of Things,” chatbots, and telematics.
Biggest changeThe most significant changes include: • an industry going through rapid change that requires agility and efficiency from its core systems; 3 Table of Contents • an increase in catastrophes and natural disasters impacting the P&C insurance industry requiring agility and innovation from its core systems; • a rise in customer expectations for digital, mobile, and omnichannel interaction to augment the traditional agent model; • a growth in demand for personalized services and products; • an increase in technology and market-driven changes in vehicular risk, including usage and driving behavior based insurance; • an increase in consolidation of providers of insurance products and associated rationalization of markets served given recent claims ratio trends and developments; • demand for coverage of emerging risks such as terrorism, cybersecurity, pandemic, and reputational risk; • growing data volumes which require modern tools to build analytics and gain actionable insights; • advances in the use of data and AI-based analytics to better market to and engage with customers, price policies, and manage claims; • development of opportunities to compete or partner with non-traditional players that offer disruptive technology-based value propositions; • established industry leaders are facing increased competition from new entrants in the market, including insurtech companies; • generational turnover in the underwriting and claims workforce, as the baby boomer generation retires and insurers must hire, train, and retain talent at scale; and • the introduction and leveraging of new technologies, such as generative AI, large language models, autonomous driving, and telematics.
Guidewire Compare Guidewire Compare is a cloud-native application included with ClaimCenter Cloud that monitors key claims measures and gives feedback on how those compare against peer insurers in the Guidewire community, or within a single insurer across regions or over time.
Guidewire Compare Guidewire Compare is a cloud-native application included with ClaimCenter that monitors key claims measures and gives feedback on how those compare against peer insurers in the Guidewire community, or within a single insurer across regions or over time.
Additionally, InsuranceSuite Cloud embeds digital and analytics capabilities natively into our platform. Most new sales and implementations are for InsuranceSuite Cloud. Guidewire PolicyCenter Cloud is our flexible underwriting and policy administration application that serves as a comprehensive system-of-record supporting the entire policy lifecycle, including product definition, underwriting, quoting, binding, issuance, endorsements, audits, cancellations, and renewals.
Additionally, InsuranceSuite embeds digital and analytics capabilities natively into our platform. Most new sales and implementations are for InsuranceSuite. Guidewire PolicyCenter is our flexible underwriting and policy administration application that serves as a comprehensive system-of-record supporting the entire policy lifecycle, including product definition, underwriting, quoting, binding, issuance, endorsements, audits, cancellations, and renewals.
Guidewire Gives Back (“GGB”) is a program focused on investing in local communities where we operate by encouraging employee volunteerism, philanthropy, and social impact investment. The GGB program is centered around employee engagement and community impact through volunteer hours from the Guidewire community and financial donations, both of which are geared toward making a measurable difference.
Guidewire Gives Back (“GGB”) is our program focused on investing in local communities where we operate by encouraging employee volunteerism, philanthropy, and social impact investment. The GGB program is centered around employee engagement and community impact through volunteer hours from the Guidewire community and financial donations, both of which are geared toward making a measurable difference.
These primary applications also include predictive analytics that drive smart decisions, digital engagement, and an ecosystem of partners and insurtechs. Guidewire InsuranceNow Guidewire InsuranceNow is a complete, cloud-based application that offers policy, billing, and claims management functionality, plus pre-integrated document production, analytics, and other capabilities, that increases agility without adding complexity.
These primary applications also include predictive analytics that drive smart decisions, digital engagement, and an ecosystem of partners and insurtechs. Guidewire InsuranceNow Guidewire InsuranceNow is a complete, cloud-based application that offers policy administration, claims management, and billing functionality, plus pre-integrated document production, analytics, and other capabilities, that increases agility without adding complexity.
All of our cloud services and products comply with standards set by ISO, American Institute of Certified Public Accountants, and Payment Card Industry Security Standards Council. Finally, we continue to improve the scalability of our service, which performs millions of complex, business-critical transactions daily.
All of our cloud services and products comply with relevant standards set by ISO, American Institute of Certified Public Accountants, and Payment Card Industry Security Standards Council. Finally, we continue to improve the scalability of our service, which performs millions of complex, business-critical transactions daily.
Our current competitors include, but are not limited to, customers’ internally developed proprietary solutions; P&C insurance software vendors such as Duck Creek, EIS Group, Insurity, Majesco, Origami Risk, and Sapiens; and horizontal software vendors such as SAP SE and Salesforce.
Our current competitors include, but are not limited to, customers’ internally developed proprietary solutions; P&C insurance software vendors such as Duck Creek, EIS Group, Insurity, Majesco, Origami Risk, and Sapiens; and horizontal software vendors such as SAP SE, Salesforce and ServiceNow.
Guidewire BillingCenter Cloud automates the billing lifecycle, enables the design of a wide variety of billing and payment plans, manages agent commissions, and integrates with external payment systems. Guidewire ClaimCenter Cloud is a complete end-to-end claims management solution that offers core claims functionality.
Guidewire ClaimCenter is a complete end-to-end claims management solution that offers core claims functionality. Guidewire BillingCenter automates the billing lifecycle, enables the design of a wide variety of billing and payment plans, manages agent commissions, and integrates with external payment systems.
Our cloud infrastructure leverages AWS, provides services hosted in AWS regions worldwide, and is tailored to provide both the benefit of cloud subscription services delivered in a cloud-native multi-tenant model while still providing insurers with the ability to configure and extend their applications via single-tenant environments which are easily managed via Guidewire Cloud Console.
Our cloud infrastructure leverages AWS regions worldwide and is tailored to provide both the benefit of cloud subscription services delivered in a cloud-native multi-tenant model while still providing insurers with the ability to configure and extend their applications via single-tenant environments which are easily managed via Guidewire Cloud Console.
To accomplish these objectives, we rely on a combination of patent, trademark, copyright, and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections. We own or have pending patents and patent applications, which generally apply to our software. Our owned patents have expiration dates starting in 2026.
To accomplish these objectives, we rely on a combination of patent, trademark, copyright, and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections. We own or have pending patents and patent applications, which generally apply to our software. Our owned patents have expiration dates starting in 2025.
We believe new claims, policy management, and billing systems will continue to be adopted as insurers that rely on legacy systems seek to gain operating efficiencies, expand into new markets and lines of business, and introduce new digital and data offerings.
We believe modern policy administration, claims management, and billing systems will continue to be adopted as insurers that rely on legacy systems seek to gain operating efficiencies, expand into new markets and lines of business, and introduce new digital and data offerings.
Examples of focus areas include creating services and products to target under-insured risks such as cyber, supply chain disruption, and reputational risk and partnering with insurtech providers to streamline operations and improve service to policyholders and agents. • Legacy System Modernization . A significant portion of the market continues to rely on legacy systems.
Examples of focus areas include creating services and products to target under-insured risks such as cyber, supply chain disruption, and reputational risk and partnering with insurtech providers to streamline operations and improve service to policyholders and agents. 4 Table of Contents • Legacy System Modernization . A significant portion of the market continues to rely on legacy systems.
The App Platform layer contains modular, cloud-native services decoupled from the InsuranceSuite core that can be used individually or interconnected to enhance existing applications and empower creation of new business applications.
The app platform layer containing modular, cloud-native services decoupled from the InsuranceSuite core that can be used individually or interconnected to enhance existing applications and empower creation of new business applications.
We work closely with our network of third-party SI partners to facilitate new sales and implementations of our products. Our partnerships with leading SI partners allow us to increase efficiency and scale while reducing customer implementation and migration costs.
We work closely with our network of SI partners to facilitate new sales and implementations of our products. Our partnerships with leading SI partners allow us to increase efficiency and scale while reducing customer implementation and migration costs.
Information about Segment and Geographic Revenue Information about geographic revenue is set forth in Note 2 “Revenue” and information about segment reporting is set forth in Note 12 “Segment Information” to our consolidated financial statements included in this Annual Report on Form 10-K.
Information about Segment and Geographic Revenue Information about geographic revenue is set forth in Note 2 “Revenue” and information about segment reporting is set forth in Note 13 “Segment Information” to our consolidated financial statements included in this Annual Report on Form 10-K.
We invite potential customers and partners to our customer conference, as we believe customer references are a key component of driving new sales. Our strong relationships with leading system integrators enhance our direct sales through co-marketing efforts and by providing additional market validation of the distinctiveness and quality of our offerings.
We invite potential customers and partners to our customer conference, as we believe customer references are a key component of driving new sales. Our strong relationships with leading SI partners enhance our direct sales through co-marketing efforts and by providing additional market validation of the distinctiveness and quality of our offerings.
The Data Platform layer provides access to core and predictive analytics data to allow creation of curated datasets that can be used to drive delivery of actionable insights across the insurance lifecycle.
The data platform layer providing access to core and predictive analytics data to allow creation of curated datasets that can be used to drive delivery of actionable insights across the insurance lifecycle.
Attracting, Developing, and Retaining Employees Our recruiting, development, and retention objectives focus on providing an optimal employee experience and culture across the employee life cycle from recruitment to retirement, and involve attracting skilled and engaged employees who contribute the talent and diverse perspectives critical to our innovative, forward-looking, and inclusive workforce.
Attracting, Developing, and Retaining Employees Our recruiting, development, and retention objectives focus on providing an optimal employee experience and culture across the employee life cycle from recruitment to retirement, and involve attracting skilled and engaged employees who contribute the talent and range of perspectives critical to our innovative, forward-looking, and inclusive workforce.
Technology We have increased the scope of our platform, products, and business through internal development and acquisitions. This growing scope has required greater investment in the development of application interfaces and shared services necessary to unify the operations and user experience across our applications.
Technology 7 Table of Contents We have increased the scope of our platform, products, and business through internal development and acquisitions. This growing scope has required greater investment in the development of application interfaces and shared services necessary to unify the operations and user experience across our applications.
We continue to invest time and resources to increase the number of qualified consultants employed by our SI partners, develop relationships with new partners in existing and new markets, and ensure that all SI partners are qualified to assist with implementing our products.
We continue to invest time and resources to increase the number of qualified consultants employed by our SI partners, develop relationships with new partners in existing and new markets, and ensure that all SI partners are qualified to implement our products.
These factors create an environment of increasing competition. Our current and future competitors vary in size and in the breadth and scope of the products they offer. As we expand our product portfolio, we may begin to compete with software and service providers we have not traditionally competed against.
These factors create an environment of shifting and increasing competition. Our current and 10 Table of Contents future competitors vary in size and in the breadth and scope of the products they offer. As we expand our product portfolio, we may begin to compete with software and service providers we have not traditionally competed against.
This approach provides our customers with the benefits of cloud-native infrastructure and services and the flexibility to provide differentiated services to their customers. InsuranceSuite Cloud is designed to support multiple releases each year to ensure that cloud customers remain on the latest version and gain fast access to our innovation efforts.
This approach provides our customers with the benefits of cloud-native infrastructure and services and the flexibility to provide differentiated services to their customers. InsuranceSuite is designed to support multiple releases each year to accelerate delivery of new capabilities and ensure that cloud customers remain on the latest version and gain fast access to our innovation efforts.
We rely on a multi-national engineering team, which has grown organically and through acquisitions. Our investments in cloud operations are focused on managing the infrastructure for our cloud-based customers in a secure, efficient, and cost-effective manner. Table of Conten t s Competition The software market that caters to the P&C insurance industry is highly competitive and fragmented.
We rely on a multi-national engineering team, which has grown organically and through acquisitions. Our investments in cloud operations are focused on managing the infrastructure for our cloud-based customers in a secure, efficient, and cost-effective manner. Competition The software market that caters to the P&C insurance industry is highly competitive and fragmented.
Guidewire Canvas Guidewire Canvas is a cloud-native application included with ClaimCenter Cloud. It features an interactive map that enables claims management and catastrophe response teams to geo-visualize claims to help improve customer satisfaction and reduce indemnity by proactively responding to storm events.
Guidewire Canvas 6 Table of Contents Guidewire Canvas is a cloud-native application included with ClaimCenter. It features an interactive map that enables claims management and catastrophe response teams to geo-visualize claims to help improve customer satisfaction and reduce indemnity by proactively responding to storm events.
Our investments in services and partners are designed to ensure customer success by committing appropriate resources to both cloud-based and self-managed implementation projects. Customer Support We provide support for our subscription customers as part of our subscription services and to our license customers for an annual fee based on a percentage of the license fees.
Our investments in services and partners are designed to ensure customer success by committing appropriate resources to implementation projects. Customer Support We provide support for our subscription customers as part of our subscription services and to our license customers for an annual fee based on a percentage of the license fees.
The contents of our websites, including any information contained in reports or other resources found on such websites, are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC. Any references to our websites are intended to be inactive, textual references only.
The contents of our websites, including any information contained in reports or other resources found on such websites, are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
Understanding and proactively anticipating the priorities and needs of our current and future employees is important to realizing our mission to be the platform P&C insurers trust to engage, innovate, and grow efficiently.
Understanding and proactively anticipating the priorities and needs of our current and future employees is important to realizing our mission to be the platform P&C insurers rely on to engage, innovate, and grow efficiently.
Guidewire HazardHub Guidewire HazardHub allows insurers to understand, assess, price, and manage property risk quickly and intelligently. HazardHub provides a single source of geospatial risk data, and provides access to more than 950 risk variables, including Table of Conten t s perils from air, water, earth, and fire.
Guidewire HazardHub Guidewire HazardHub allows insurers to understand, assess, price, and manage property risk quickly and intelligently. HazardHub provides a single source of geospatial risk data, and provides access to more than 950 risk variables, including perils from air, water, earth, and fire.
As of July 31, 2024, the Guidewire Marketplace had over 215 partner-developed integrations that have been awarded Ready for Guidewire validation and hundreds of Guidewire-developed resources available for download. We are continually expanding the breadth of functionality and depth of partnerships in the Guidewire Marketplace.
As of July 31, 2025, the Guidewire Marketplace had over 315 partner-developed integrations that have been awarded Ready for Guidewire validation and hundreds of Guidewire-developed resources available for download. We are continually expanding the breadth of functionality and depth of partnerships in the Guidewire Marketplace.
Data and Analytics We offer a variety of applications that allow insurers to uncover hidden opportunities and write more profitable business by enabling a seamless path from data to value. Guidewire Predict Guidewire Predict is a P&C-specific machine-learning platform that empowers insurers to make intelligent data-driven decisions throughout the insurance lifecycle.
Data and Analytics We offer a variety of applications that allow insurers to evaluate risks and write more profitable business by enabling a seamless path from data to value. Guidewire Predict Guidewire Predict is a P&C-specific machine-learning platform that empowers insurers to make intelligent data-driven decisions throughout the insurance lifecycle.
Core Operational Products We offer the following core products: Guidewire InsuranceSuite Cloud, Guidewire InsuranceNow, and Guidewire InsuranceSuite for Self-Managed. Guidewire InsuranceSuite Cloud Guidewire InsuranceSuite Cloud is a highly configurable and scalable product, delivered as a service, and primarily comprised of three core applications (PolicyCenter Cloud, BillingCenter Cloud, and ClaimCenter Cloud) that can be subscribed to separately or together.
Core Operational Products We offer the following suite of products: Guidewire InsuranceSuite and Guidewire InsuranceNow. Guidewire InsuranceSuite Guidewire InsuranceSuite is a highly configurable and scalable product, delivered as a service, and primarily comprised of three core applications (PolicyCenter, ClaimCenter, and BillingCenter) that can be subscribed to separately or together.
Table of Conten t s Guidewire Product Content Management Guidewire Product Content Management provides software tools and standards-based, line-of-business templates to enable insurers to more rapidly introduce and modify services and products by reducing product configuration and maintenance efforts.
Guidewire Product Content Management Guidewire Product Content Management provides software tools and standards-based, line-of-business templates to enable insurers to more rapidly introduce and modify services and products by reducing product configuration and maintenance efforts.
The prioritization of cloud-delivered solutions has also Table of Conten t s required significant focus in improving our ability to manage, secure, and operate our applications since our cloud-based deployments, unlike our self-managed implementations, shift many operational responsibilities to us. Our cloud infrastructure is designed to maximize the security, stability, scalability and efficiency of our applications.
The prioritization of cloud-delivered solutions has also required significant focus in improving our ability to manage, secure, and operate our applications since our cloud-based deployments, unlike our self-managed implementations, shift many operational responsibilities to us. Our cloud infrastructure is designed to enhance the security, stability, scalability and efficiency of our applications.
These applications are built on and optimized for our Guidewire Cloud Platform (“GWCP”) Table of Conten t s architecture and leverage our in-house cloud operations team. GWCP is a Guidewire-developed infrastructure layer enabled by and hosted on Amazon Web Services (“AWS”). GWCP’s architecture consists of three primary layers.
These applications are built on and optimized for our GWCP architecture and leverage our in-house cloud operations team. GWCP is a Guidewire-developed infrastructure layer enabled by and hosted on Amazon Web Services (“AWS”). GWCP’s architecture consists of three primary layers.
Employees and Human Capital Resources Our business requires attracting, developing, and retaining a motivated team of individuals who thrive in a culture based on integrity, rationality, and collegiality and that embraces diversity, inclusion, and belonging.
Employees and Human Capital Resources Our business requires attracting, developing, and retaining a motivated team of individuals who thrive in a culture based on integrity, rationality, and collegiality.
Fostering career progression by encouraging regular professional education empowers our employees to pursue their professional goals, which is critical to developing and retaining our employees. We invest in broad-based development by providing diverse growth opportunities, Table of Conten t s including cutting-edge skills training, on-demand AI learning platforms, dynamic mentorship, and transformative leadership programs.
Fostering career progression by encouraging regular professional education empowers our employees to pursue their professional goals, which is critical to developing and retaining our employees. We invest in broad-based development by providing diverse growth opportunities, including skills training, on-demand AI learning 8 Table of Contents platforms, mentorship, and leadership programs.
Specialized cloud infrastructure services and tools are centered around maximizing service and resource availability, optimizing performance, scalability, and cost efficiency, maintaining data security, privacy and regulatory compliance, as well as offering a high degree of service observability to provide customers with better insight and control consistent with their operational needs.
The specialized cloud infrastructure service and tool layer centered around optimizing service and resource availability, performance, scalability, and cost efficiency, maintaining data security, privacy and regulatory compliance, and offering a high degree of service observability to provide customers with better insight and control consistent with their operational needs.
Corporate governance information, including our governance guidelines and code of business conduct and ethics, is also available on our investor relations website under the heading “Corporate Governance.” Corporate sustainability information, including our approach and progress in respect of environmentally and socially responsible business practices, is available on our website and is located at www.guidewire.com/corporate-sustainability.
Corporate governance information, including our governance guidelines and code of business conduct and ethics, is also available on our investor relations website under the heading “Corporate Governance.” Corporate sustainability information is available on our website and is located at www.guidewire.com/corporate-sustainability.
Our recruiting process actively sources diverse talent and is designed to reduce bias, supporting our ability to hire candidates with professional qualifications, personal potential, and differing perspectives. Our flexible work policies expand our ability to hire for certain roles and retain talent in geographies where we do not have physical offices.
Our recruiting process is designed to reduce bias and support our ability to hire candidates with professional qualifications, personal potential, and differing perspectives. For certain roles and when required to meet our business needs, flexible work policies expand our ability to hire for certain roles and retain talent in geographies where we do not have physical offices.
WHERE YOU CAN FIND MORE INFORMATION The following filings are available to view and download free of charge on our investor relations website as soon as reasonably practicable after we file them with the SEC: Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Table of Conten t s Current Reports on Form 8-K, and our Proxy Statement for our annual meeting of stockholders.
This seasonal pattern, however, may be absent in any given year. 11 Table of Contents WHERE YOU CAN FIND MORE INFORMATION The following filings are available to view and download free of charge on our investor relations website as soon as reasonably practicable after we file them with the SEC: Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our Proxy Statement for our annual meeting of stockholders.
Based on these models, Cyence produces insights delivered through reports that will predict the likelihood and economic impact of cyber attacks on a target company or individual. This can be used for underwriting, pricing, and developing cyber insurance products.
Cyence then curates and analyzes the data through AI and machine-learning statistical models to extract meaningful signals. Based on these models, Cyence produces insights delivered through reports that will predict the likelihood and economic impact of cyber attacks on a target company or individual. This can be used for underwriting, pricing, and developing cyber insurance products.
We believe strong customer relationships are a key driver of our success given the long-term nature of our customer engagements and importance of customer references for new sales. We focus on developing and maintaining our customer relationships through customer service and account management.
We believe strong customer relationships are a key driver of our success given the long-term nature of our customer engagements and importance of customer references for new sales. We focus on developing and maintaining our customer relationships through customer service and account management. Customers are defined as entities that have placed orders for our services or products.
Guidewire InsuranceSuite: Complementary Capabilities and Applications We offer several complementary capabilities and applications, some of which are included in the core operational services and products, and all of which are designed to work seamlessly with our core operational services and products, including: Guidewire Rating Management Guidewire Rating Management enables P&C insurers to manage the pricing of their insurance services and products.
Guidewire InsuranceSuite: Complementary Capabilities and Applications We offer several complementary capabilities and applications, some of which are included in the core operational services and products, and all of which are designed to work seamlessly with our core operational services and products, including: Guidewire Rating Management Guidewire Rating Management enables P&C insurers to manage the pricing of their insurance services and products. 5 Table of Contents Guidewire Reinsurance Management Guidewire Reinsurance Management enables P&C insurers to use rules-based logic to execute their reinsurance strategy through their underwriting and claims processes.
Because we pay our services professionals the same amount throughout the year, our gross margins on our services revenue are usually lower in these quarters. This seasonal pattern, however, may be absent in any given year.
Because we pay our services professionals the same amount throughout the year, our gross margins on our services revenue are usually lower in these quarters.
The Guidewire Marketplace also empowers customers pursuing innovation initiatives by providing access to a curated collection of insurtech applications. Additionally, we promote innovation through our Insurtech Vanguards which is a community of select startups and technology providers, bringing transformative solutions to the P&C industry and making innovation more accessible. Nine Insurtech Vanguards have been promoted to our PartnerConnect program.
Additionally, we promote innovation through our Insurtech Vanguards which is a community of select startups and technology providers, bringing transformative solutions to the P&C industry and making innovation more accessible. Sixteen Insurtech Vanguards have been promoted to our PartnerConnect program.
Our success and ability to compete depend in part upon our ability to protect our proprietary technology, to establish and adequately protect our intellectual property rights, and to protect against third-party claims and litigation related to intellectual property.
We typically compete favorably on the basis of these factors in most geographies. Intellectual Property Our success and ability to compete depend in part upon our ability to protect our proprietary technology, to establish and adequately protect our intellectual property rights, and to protect against third-party claims and litigation related to intellectual property.
Customers are Table of Conten t s defined as entities that have placed orders for our services or products. In some instances, a parent corporation can have multiple entities, or insurance brands, that place orders for our services or products and, in other instances, customers are in industries adjacent to the insurance industry and do not have an insurance brand.
In some instances, a parent corporation can have multiple entities, or insurance brands, that place orders for our services or products and, in other instances, customers are in industries adjacent to the insurance industry and do not have an insurance brand. As of July 31, 2025, we had approximately 500 customers representing approximately 570 insurance brands in 43 countries.
As of July 31, 2024, we had 3,469 employees, including 1,782 in global product development and operations (comprised of research and development, cloud operations, and technical support), 750 in professional services, 477 in sales and marketing, and 460 in general and administrative roles. As of July 31, 2024, we had 1,692 employees in the United States and 1,777 employees internationally.
As of July 31, 2025, we had 3,772 employees, including 1,879 in global product development and operations (comprised of research and development, cloud operations, and technical support), 873 in professional services, 533 in sales and marketing, and 487 in general and administrative roles. As of July 31, 2025, we had 1,714 employees in the United States and 2,058 employees internationally.
Diversity, Inclusion, and Belonging We believe that understanding and respecting another’s perspective, experience, background, and beliefs provides an opportunity to expand horizons, increase innovation, challenge complacency, and foster empathy. Diversity of perspective, experience, background, and beliefs fuel our innovative, collaborative, and engaged workplace.
People and Community Engagement We believe that understanding and respecting another’s perspective, experience, background, and beliefs provides opportunities to expand horizons, increase innovation, challenge complacency, and foster empathy. A broad range of perspectives and experiences drives our innovative, collaborative, and engaged workplace.
The GGB strategy, programs, and collaborative partnerships reflect employees’ passions and embody Guidewire’s corporate mission, as well as our customers’ purpose. Corporate Culture Our employees are critical to our success, and we believe creating an inclusive culture is essential to attracting and retaining engaged employees.
The GGB strategy, programs, and collaborative partnerships reflect employees’ passions and embody Guidewire’s corporate mission, as well as our customers’ purpose. Corporate Culture Our employees are critical to our success, and our global strategy includes cultivating an inclusive and engaged workforce that fosters collaboration and supports our shared values.
Our digital engagement products enable digital sales, omnichannel service, and enhanced claims experiences for policyholders, agents, vendor partners, and field personnel. Our analytics offerings enable insurers to manage data more effectively, gain insights into their business, drive operational efficiencies, and underwrite new and evolving risks.
To support our core products, we provide digital engagement offerings that enable seamless sales, omnichannel service, and enhanced claims experiences for policyholders, agents, vendors, and field personnel and analytics products that allow insurers to manage and use data more effectively, gain business insights, improve operational efficiency, and underwrite emerging risks.
Guidewire Advanced Product Designer Guidewire Advanced Product Designer is a cloud-native application for insurance product design and management across the complete insurance lifecycle. It enables insurers to launch and update products quickly by providing visual product development tools, prebuilt product model templates, product management capability, and auto generated product code.
It enables insurers to launch and update products quickly by providing visual product development tools, prebuilt product model templates, product management capability, and auto generated product code.
Guidewire InfoCenter is a business intelligence warehouse for P&C insurers that provides information in easy-to-use formats for business intelligence, analysis, and enhanced decision making. With Guidewire InfoCenter, insurers gain flexible operational insights as well as the ability to optimize their business.
Guidewire DataHub and InfoCenter Guidewire DataHub is an operational data store that unifies, standardizes, and stores data from the patchwork of insurer’s systems as well as from external sources. Guidewire InfoCenter is a business intelligence warehouse for P&C insurers that provides information in easy-to-use formats for business intelligence, analysis, and enhanced decision making.
Our values of integrity, rationality, and collegiality are the foundation of how we work with one another. We incorporate a wide variety of communication and training activities to encourage collaboration amongst our colleagues around the world.
Our values of integrity, rationality, and collegiality are the foundation of how we work with one another. We incorporate a wide variety of communication and training activities to encourage collaboration across our global workforce. We measure the effectiveness of our employee programs through quarterly surveys and use the results to identify opportunities for improvement.
We aim for the highest standards of fairness and equal opportunity in recruitment, hiring, promotions, job assignments, and compensation. Initiatives to create greater diversity and belonging among our employees include inclusive recruiting and outreach programs for diverse candidates, employee resource groups (“ERGs”), and management-led listening circles.
We aim for the highest standards of fairness and equal opportunity in recruitment, hiring, promotions, job assignments, and compensation. Initiatives to foster a collaborative and welcoming workplace include recruiting and outreach programs and various employee resource groups open to all employees.
We want all of our employees to thrive, and we regularly re-evaluate how to best support our employees’ wellness, health, and safety through management systems, policies, and programs that encompass our global operations. Our current benefit and wellness programs drive engagement that positively impacts our culture, job satisfaction, recruiting, and retention programs.
Health and Wellness We believe a healthy, engaged, and high-performing workforce is part of our competitive advantage. We want all of our employees to thrive, and we regularly re-evaluate how to best support our employees’ wellness, health, and safety through management systems, policies, and programs that encompass our global operations.
As of July 31, 2024, we had approximately 470 customers representing approximately 570 insurance brands in 42 countries. We have updated our customer definition to exclude customers that pay us less than $10,000 per year, which primarily represents customers of our HazardHub product. Strategic Relationships We have extensive relationships with SI, consulting, technology, and industry partners.
Our customer definition excludes customers that pay us less than $10,000 per year, which primarily represents customers of our HazardHub product. Strategic Relationships 9 Table of Contents We have extensive relationships with SI, consulting, technology, and industry partners. Our network of partners has expanded as interest in and adoption of our platform has grown.
We believe the P&C insurance industry is experiencing accelerating change in how insurers engage with, sell to, and manage relationships with consumers and businesses. Today, P&C insurers are striving to respond to significant changes in their competitive marketplace and the character of the risks they underwrite.
Today, P&C insurers are striving to respond to significant changes in their competitive marketplace and the characteristics of the risks they underwrite.
Guidewire Marketplace The Guidewire Marketplace is where insurers find trusted applications and content that complement the Guidewire platform from our PartnerConnect partners, as well as from Guidewire product and services teams. These applications and content help insurers to rapidly innovate and differentiate their businesses by allowing them to leverage capabilities provided by the Guidewire ecosystem to meet their business goals.
With Guidewire InfoCenter, insurers gain flexible operational insights as well as the ability to optimize their business. Guidewire Marketplace The Guidewire Marketplace is where insurers find vetted applications and content that complement the Guidewire platform from our PartnerConnect partners, as well as Guidewire product and services teams.
While each insurer may have different goals and priorities when pursuing new technology investments, there are several major themes that we believe guide these investments: • Digital Engagement Models . We believe that insurers will need to provide a more intuitive, digital user experience to reduce the risk of customer dissatisfaction and loss.
In response to these trends, changes, challenges, and opportunities, we believe that P&C insurers need a modern core platform that can increase agility and enhance digital engagement and analytics offerings. While each insurer may have different goals and priorities when pursuing new technology investments, there are several major themes that we believe guide these investments: • Agility .
It is also highly competitive, with insurers competing primarily on product differentiation, pricing options, customer service, marketing and advertising, affiliate programs, and channel strategies. P&C insurers modernize their transactional core systems to manage key functional areas of P&C insurance, including product definition, underwriting and policy administration, claims management, and billing.
It is also highly competitive, with insurers competing primarily on product differentiation, pricing options, customer service, marketing and advertising, affiliate programs, and channel strategies. In some instances, P&C insurers rely on legacy systems that may impact their ability to respond to business and market requirements.
Digital Engagement Guidewire Digital Engagement Applications Our Digital Engagement Applications enable insurers to provide digital experiences to customers, agents, vendors, and field personnel through their device of choice.
Any such product introduction or modification must connect to and incorporate regulatory or industry-standard data and content, such as Insurance Services Office (“ISO”) or National Council on Compensation Insurance content. Digital Engagement Guidewire Digital Engagement Applications Our Digital Engagement Applications enable insurers to provide digital experiences to customers, agents, vendors, and field personnel through their device of choice.
Compare allows claims organizations to increase their processing efficiency by monitoring key claims measures such as indemnity, expenses, cycle times, reserves, salvage, subrogation, percentage closed, catastrophe, and litigated. Guidewire Explore Guidewire Explore is a cloud-native application that gathers and curates InsuranceSuite data in near real-time to augment decision making inside and outside InsuranceSuite.
Compare allows claims organizations to increase their processing efficiency by monitoring key claims measures such as indemnity, expenses, cycle times, reserves, salvage, subrogation, percentage closed, catastrophe, and litigated. Guidewire Industry Intel Guidewire Industry Intel comprises a set of pre-built AI-based models leveraging our comprehensive datasets.
Product definition specifies the insurance coverage, pricing, and financial and legal terms of insurance policies. Underwriting and policy administration includes collecting information from potential policyholders, determining appropriate coverages and terms, pricing policies, issuing policies, and updating and maintaining policies over their lifetimes.
Underwriting and policy administration includes collecting information from potential policyholders, determining appropriate coverages and terms, pricing policies, issuing policies, and updating and maintaining policies over their lifetimes. Claims management includes loss intake, investigation and evaluation of incidents, settlement negotiation, vendor management, litigation management, and payment processing. Billing includes policyholder invoicing, payment collection, and agent commission calculation.
Guidewire Reinsurance Management Guidewire Reinsurance Management enables P&C insurers to use rules-based logic to execute their reinsurance strategy through their underwriting and claims processes. Guidewire Client Data Management Guidewire Client Data Management helps P&C insurers capitalize on customer information more coherently, overcoming traditional siloed practices that impair efficiency and customer service.
Guidewire Client Data Management Guidewire Client Data Management helps P&C insurers capitalize on customer information more coherently, overcoming traditional siloed practices that impair efficiency and customer service. Guidewire Advanced Product Designer Guidewire Advanced Product Designer is a cloud-native application for insurance product design and management across the complete insurance lifecycle.
It does this by capturing data about cyber threats from more than 400 sources, including public, open-source, proprietary, and third-party data. Cyence then curates and analyzes the data through AI and machine-learning statistical models to extract meaningful signals.
Guidewire Cyence Guidewire Cyence is a cyber-risk economic modeling product that helps P&C insurers accurately measure the financial impact of cyber risk on their customers. It does this by capturing data about cyber threats from more than 400 sources, including public, open-source, proprietary, and third-party data.
We also offer professional services, both directly and through SI partners, to help our customers deploy, migrate, and utilize our platform and suite of products. A majority of our services revenue is billed monthly on a time and materials basis. Industry Background The P&C insurance industry is large, fragmented, highly regulated, and complex.
Support is typically priced as a percentage of license fees and recognized ratably, while most professional services are billed monthly on a time-and-materials basis. Industry Background The P&C insurance industry is large, fragmented, highly regulated, and complex.
We sell our suite of products through subscription services for our platform and cloud-delivered products and term licenses for our self-managed products. We generally price our products based on the amount of Direct Written Premium (“DWP”) that will be managed by our products. Our subscription, term license, and support fees are typically invoiced annually in advance.
We generally price our subscription services for core products based on the amount of Direct Written Premium (“DWP”) managed on our platform, with certain cloud-delivered products priced based on usage or other metrics. Initial subscription agreements are generally five years in duration, with annual renewals thereafter.
Item 1. Business Overview and Purpose Guidewire is the platform that P&C insurers trust to engage, innovate, and grow efficiently. Our core systems leverage data and analytics, digital, and AI. As a partner to our customers, we continually evolve to enable their success and assist them in navigating a rapidly changing insurance market. We were founded in 2001.
Item 1. Business Overview and Purpose Guidewire is the platform that property and casualty (“P&C”) insurers rely on to engage with customers, innovate, and operate more efficiently. Founded in 2001, we serve insurers of all sizes, ranging from global carriers to regional and local providers, helping them navigate a rapidly changing insurance market.
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Our core products are InsuranceSuite Cloud, InsuranceNow, and InsuranceSuite for self-managed installations. These products are transactional systems of record that support the entire insurance lifecycle, including insurance product definition, distribution, underwriting, policyholder services, and claims management. We also sell digital engagement and analytics products.
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Our platform combines core systems of record with digital, analytics, and artificial intelligence (“AI”) capabilities. Our foundational core products, InsuranceSuite and InsuranceNow, are delivered primarily as a cloud-based subscription service leveraging our proprietary cloud platform which we refer to as Guidewire Cloud Platform (“GWCP”). Historically, InsuranceSuite has also been available for self-managed installations.
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To support P&C insurers globally, we have localized, and will continue to localize, our suite of products for use in a variety of international regulatory, language, and currency environments. Our customers range from some of the largest global insurance companies or their subsidiaries to predominantly national or local insurers that serve specific states and/or regions.
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These products serve as transactional systems of record, fully supporting insurance operations, including product definition, policy administration, claims management and billing.
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Our customer engagement is led by our direct sales team and supported by our SI partners. We maintain and continue to grow our sales and marketing efforts globally, and maintain regional sales centers throughout the world.
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To support insurers worldwide, we localize our products to address diverse regulatory, language, and currency requirements. Additionally, we provide Guidewire Marketplace to empower customers pursuing innovation initiatives by offering a vetted collection of insurtech applications and to help them differentiate their businesses by allowing them to leverage capabilities from the Guidewire ecosystem.
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Because our platform is critical to our new and existing customers’ businesses, their decision-making and product evaluation process is thorough, which often results in an extended sales cycle. These evaluation periods can extend further if a customer purchases multiple products or is considering a move to a cloud-based subscription for the first time.
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We reach customers directly through our global sales team and in partnership with third-party global system integrators (“SIs”). Because our platform is central to insurers’ operations, customer evaluation cycles are often extensive, particularly when multiple products are involved or when insurers are moving to GWCP for the first time. Sales processes typically include detailed due diligence and customer reference checks.
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Sales to new customers also involve extensive customer due diligence and reference checks.
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In addition to migration and expansion activity on GWCP, our growth depends on continuously enhancing existing products, introducing new capabilities, ensuring efficient cloud operations, and expanding local content. We sell our products primarily through subscription services for our platform and cloud-delivered products.
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The success of our sales efforts relies on continued improvements and enhancements to our current products, the introduction of new products, efficient operation of our Table of Conten t s cloud infrastructure, continued development of relevant local content and automated tools for updating content, content in the Guidewire Marketplace to improve efficiencies, accelerate integration, and provide access to innovation, and successful implementations and migrations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe complexity of our products that incorporate machine learning and AI technologies could result in unforeseen delays or expenses, or undetected defects, bugs, or security vulnerabilities, which may harm the market acceptance of new products, damage our reputation with current or prospective customers, cause significant remediation expenses, and may harm our business, results of operations, and financial condition.
Biggest changeThe complexity of our products that incorporate machine learning and AI technologies could result in unforeseen delays or expenses, or undetected defects, bugs, or new or unknown cybersecurity risks, vulnerabilities, and challenges, which may harm the market acceptance of new products, damage our reputation with current or prospective customers, cause significant remediation expenses, and may harm our business, results of operations, and financial condition. 17 Table of Contents The uncertainty around new and emerging AI technologies may require additional investment in the development and maintenance of proprietary datasets and machine learning models, development of new approaches and processes to provide attribution or remuneration to creators of training data, and development of appropriate protections and safeguards for handling the use of customer data with such technologies, which may be costly and could impact our expenses.
If any of such risks and uncertainties actually occurs, our business, results of operations, or financial condition could differ materially from the plans, projections and other forward-looking statements included in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K and in our other public filings.
If any of such risks and uncertainties actually occurs, our business, financial condition or results of operations could differ materially from the plans, projections and other forward-looking statements included in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K and in our other public filings.
In addition, if any of the following risks and uncertainties, or if any other risks and uncertainties, actually occurs, our business, results of operations, or financial condition could be harmed substantially, which could cause the market price of our stock to decline, perhaps significantly.
In addition, if any of the following risks and uncertainties, or if any other risks and uncertainties, actually occurs, our business, financial condition or results of operations could be harmed substantially, which could cause the market price of our stock to decline, perhaps significantly.
As a result, if we fail to successfully sell our products to one or more of these anticipated customers in any particular period or fail to identify additional potential customers or such customers purchase fewer of our products or professional services, defer or cancel orders, fail to renew their license or subscription agreements or otherwise terminate or reduce their relationship with us, our business, results of operations, and financial condition would be harmed.
As a result, if we fail to successfully sell our products to one or more of these anticipated customers in any particular period or fail to identify additional potential customers, or if such customers purchase fewer of our products or professional services, defer or cancel orders, fail to renew their license or subscription agreements, or otherwise terminate or reduce their relationship with us, our business, results of operations, and financial condition would be harmed.
Bribery Act of 2010 and other anti-corruption regulations, particularly in emerging market countries; • compliance by international staff with accounting practices generally accepted in the United States, including adherence to our accounting policies and internal controls; • import and export license requirements, tariffs, taxes and other trade barriers; • increased financial accounting, tax and reporting burdens and complexities; • weaker protection of intellectual property rights in some countries; • multiple and possibly overlapping tax regimes, including certain Organization for Economic Cooperation and Development (“OECD”) proposals, including the implementation of the global minimum tax under the Pillar Two model rules; • government sanctions that may interfere with our ability to sell into particular countries, such as Russia; • disruption to our operations caused by public health crises, such as epidemics and pandemics; and • political, social, and economic instability abroad, terrorist attacks, and security concerns in general.
Bribery Act of 2010 and other anti-corruption regulations, particularly in emerging market countries; • compliance by international staff with accounting practices generally accepted in the United States, including adherence to our accounting policies and internal controls; • import and export license requirements, tariffs, taxes and other trade barriers; • increased financial accounting, tax and reporting burdens and complexities; • weaker protection of intellectual property rights in some countries; • multiple and possibly overlapping tax regimes, including certain Organization for Economic Cooperation and Development (“OECD”) proposals, such as the implementation of the global minimum tax under the Pillar Two model rules; • government sanctions that may interfere with our ability to sell into particular countries, such as Russia; • disruption to our operations caused by public health crises, such as epidemics and pandemics; and • political, social, and economic instability abroad, terrorist attacks, and security concerns in general.
Fluctuation in our services revenue can result from several factors, some of which may be beyond our control, including change in customer demand for our services team’s involvement in the implementation of and migration to new products, the rates we charge or discounts we offer for our services, our ability to bill our customers for all time incurred to complete a project, the extent and quality of implementations and migrations provided by our SI partners, the extent to which we subcontract services to those SI partners, and the impact on the global economy as a result of economic volatility, inflation, or other global events and disasters.
Fluctuation in our services revenue can result from several factors, some of which may be beyond our control, including change in customer demand for our services team’s involvement in the implementation of and migration to new products, the rates we charge or discounts we offer for our services, our ability to bill our customers for all time incurred to complete a project, the extent and quality of implementations and migrations provided by our SI partners, the extent to which we subcontract services to those SI partners, and the impact on the global economy as a result of economic volatility, inflation, tariffs, or other global events and disasters.
These other factors include the percentage of new customers that enter into subscription services agreements as compared to term license agreements, the revenue impact of allocating total contract consideration between license revenue and subscription and support revenue when existing customers transition from term license to subscription services agreements, investments in certain cloud implementations to assist our customers with their migration to our cloud services, continued growth and efficiency of our cloud operations and technical support teams, and the impact on the global economy as a result of economic volatility, inflation, or other global events and disasters.
These other factors include the percentage of new customers that enter into subscription services agreements as compared to term license agreements, the revenue impact of allocating total contract consideration between license revenue and subscription and support revenue when existing customers transition from term license to subscription services agreements, investments in certain cloud implementations to assist our customers with their migration to our cloud services, continued growth and efficiency of our cloud operations and technical support teams, and the impact on the global economy as a result of economic volatility, inflation, tariffs, or other global events and disasters.
If our competitors’ products, services, or technologies become more accepted than our solutions, if they are successful in bringing their products or services to market earlier than we are, if their products or services are more technologically capable than ours (including, without limitation, as a result of new or better use of evolving AI technologies, such as generative AI), or if customers replace our solutions with custom-built software, then our revenue could be adversely affected.
If our competitors’ products, services, or technologies become more accepted than our solutions, if they are successful in bringing their products or services to market earlier than we are, if their products or services are more technologically capable than ours (including, without limitation, as a result of new or better use of evolving AI technologies, such as generative AI), or if our customers or potential customers replace our solutions with custom-built software, then our revenue could be adversely affected.
Our ability to make scheduled payments of the principal and interest on our indebtedness when due or to make payments upon conversion or repurchase demands with respect to our Convertible Senior Notes, or to refinance our indebtedness as we may need or desire, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
Our ability to make scheduled payments of the principal and interest on our indebtedness when due or to make payments upon conversion or repurchase demands with respect to our 2029 Convertible Senior Notes, or to refinance our indebtedness as we may need or desire, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
From time to time, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Convertible Senior Notes.
From time to time, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2029 Convertible Senior Notes.
For example, certain security systems in homes or other remote workplaces may be less secure than those used in our offices, which may subject us to increased security risks, including cybersecurity-related events, and expose us to risks of data or financial loss and associated disruptions to our business operations.
For example, certain security systems in homes or other remote workplaces may be less secure than those used in our offices, which may subject us to increased security risks, including cybersecurity-related events or incidents, and expose us to risks of data or financial loss and associated disruptions to our business operations.
Negative or worsening conditions in the general economy both in the United States and abroad, including conditions resulting from financial and credit market fluctuations and inflation, could cause a decrease in corporate spending on enterprise software in general, and in the insurance industry specifically, and negatively affect the rate of growth of our business.
Negative or worsening conditions in the general economy both in the United States and abroad, including conditions resulting from financial and credit market fluctuations, tariffs, and inflation, could cause a decrease in corporate spending on enterprise software in general, and in the insurance industry specifically, and negatively affect the rate of growth of our business.
Anticipated further evolution of EU and U.K. regulations on data privacy and security and any related changes to the regulatory framework in these or other countries may increase substantially our risk exposure to the penalties to which we could be subject in the event of any non-compliance.
Further evolution of EU and U.K. regulations on data privacy and security and any related changes to the regulatory framework in these or other countries may substantially increase our risk exposure to the penalties to which we could be subject in the event of any non-compliance.
These broad market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes, inflation or deflation, armed conflict, international currency fluctuations, or other global events have and may continue to affect the market price of our common stock.
These broad market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes, inflation or deflation, armed conflict, international currency fluctuations, tariffs, or other global events have and may continue to affect the market price of our common stock.
We may experience hesitancy, reluctance, or refusal by European or multi-national customers to continue to use our products due to the potential risk exposure to such customers as a result of such developments and the data protection obligations imposed on them by various data protection authorities.
Further, we may experience hesitancy, reluctance, or refusal by European or multi-national customers to continue to use our products due to the potential risk exposure to such customers as a result of such developments and the data protection obligations imposed on them by various data protection authorities.
We may find it necessary to establish alternative systems to maintain EEA personal data within the EEA, which may involve substantial expense and may cause us to need to divert resources from other aspects of our business, all of which may adversely affect our results from operations.
We may find it necessary to establish alternative systems to maintain EEA personal data within the EEA, which may involve substantial expense and may cause us to divert resources from other aspects of our business, all of which may adversely affect our results from operations.
Our failure to repurchase Convertible Senior Notes at a time when the repurchase is required by the Indenture or to pay any cash payable on future conversions of the Convertible Senior Notes as required by such Indenture would constitute a default under such Indenture.
Our failure to repurchase the 2029 Convertible Senior Notes at a time when the repurchase is required by the 2029 Indenture or to pay any cash payable on future conversions of the 2029 Convertible Senior Notes as required by such Indenture would constitute a default under such Indenture.
In addition, data security breaches could expose us to liability under various laws and regulations across jurisdictions, increase the risk of litigation and governmental or regulatory investigation, and increase our costs for compliance.
In addition, data security incidents or breaches could expose us to liability under various laws and regulations across jurisdictions, increase the risk of litigation and governmental or regulatory investigation, and increase our costs for compliance.
This mismatch is primarily due to the following reasons: • our subscription arrangements are recognized ratably and only a portion, if any, of the revenue from an order is recognized in the same fiscal period of the order; • subscription arrangements generally have ramped invoicing schedules over the initial term, which affects ARR and cash flows, but revenue is recognized ratably over the initial term; • our term license agreements and multi-year term license renewals generally have annual billing arrangements even though revenue is recognized upfront for the entire committed term; • as customers enter into a subscription agreement to migrate from an existing term license agreement or as we invest in certain cloud implementations to assist our customers with their migration to our cloud services, the Table of Conten t s timing of revenue recognition may be impacted by the allocation of revenue between different performance obligations; • we may enter into agreements with future product delivery requirements, specified terms for product upgrades or functionality, acceptance terms, early termination rights, or unconditional return rights, which may require us to delay revenue recognition for a period of time; and • revenue recognition may not occur in the period when the order is placed due to certain revenue recognition criteria not being met, such as delivery of the software or providing access to the subscription services.
This mismatch is primarily due to the following reasons: • our subscription arrangements are recognized ratably and only a portion, if any, of the revenue from an order is recognized in the same fiscal period of the order; • subscription arrangements generally have ramped invoicing schedules over the initial term, which affects ARR and cash flows, but revenue is recognized ratably over the initial term; • our term license agreements and multi-year term license renewals have annual billing arrangements even though revenue is recognized upfront for the entire committed term; • as customers enter into a subscription agreement to migrate from an existing term license agreement or as we invest in certain cloud implementations to assist our customers with their migration to our cloud services, the timing of revenue recognition may be impacted by the allocation of revenue between different performance obligations; • we may enter into agreements with future product delivery requirements, specified terms for product upgrades or functionality, acceptance terms, early termination rights, or unconditional return rights, which may require us to delay revenue recognition for a period of time; and • revenue recognition may not occur in the period when the order is placed due to certain revenue recognition criteria not being met, such as delivery of the software or providing access to the subscription services.
Any failure by a third party to prevent or mitigate data security breaches or improper access to, or use, acquisition, disclosure, alteration or destruction of customer data could have adverse consequences for us.
Any failure by a third party to prevent or mitigate data security incidents, breaches or improper access to, or use, acquisition, disclosure, alteration or destruction of customer data could have adverse consequences for us.
Following an acquisition or the establishment of an alliance offering new products, the timing of revenue from the sale of products that we acquired or that result from the alliance, or from the sale of a bundle of products that includes such new products, may be different than the timing of revenue from existing products.
Following an acquisition or the establishment of an alliance offering new products, the timing of revenue from the sale of products that we acquired or that result from the alliance, or from the sale of a bundle of products that includes such new products, may be different from the timing of revenue from existing products.
Although we believe our operating activities act as a natural hedge for a majority of our foreign currency exposure at the cash flow or operating income level because we typically collect revenue and incur costs in the currency of the location in which we provide our software and services, our relationships with our customers are long-term in nature so it is difficult to predict if our operating activities will provide a natural hedge in the future.
Although we believe our operating activities act as a natural hedge for a majority of our foreign currency exposure at the cash flow or operating income level because we typically collect revenue and incur costs in the currency of the location in which we provide our products and services, our relationships with our customers are long-term in nature so it is difficult to predict if our operating activities will provide a natural hedge in the future.
Security breaches could result in public disclosure of confidential information, loss or modification of data affecting our customers’ operations, fraud or theft, ransom demands, or other misuse of confidential information, which in turn could result in our cloud services being perceived as not being secure, a reduction in customers using our products, as well as litigation, breach of contract claims, indemnity obligations, additional reporting requirements and/or oversight, restrictions on processing customer data, and other liabilities for our Company, all of which could lead to loss of revenue, a diminished ability to retain or attract new customers due to reputational harm, fines, costs, or other penalties or sanctions.
Security incidents or breaches could result in public disclosure of confidential information or personal information, loss or modification of data affecting our customers’ operations, fraud or theft, ransom demands, or other misuse of confidential information or personal information, which in turn could result in our cloud services being perceived as not being secure, a reduction in customers using our products, as well as litigation, breach of contract claims, indemnity obligations, additional reporting requirements and/or oversight, restrictions on processing data, and other liabilities for our Company, all of which could lead to loss of revenue, a diminished ability to retain or attract new customers due to reputational harm, fines, costs, or other penalties or sanctions.
Further, as we continue to rely on SIs to provide deployment, migration, and on-going services, our ability to ensure a high level of quality in addressing customer issues and providing a maintainable and efficient cloud environment could be diminished as we may be unable to control the quality or timeliness of the implementation of our products by our SI partners.
Further, as we continue to rely on SI partners to provide deployment, migration, and on-going services, our ability to ensure a high level of quality in addressing customer issues and providing a maintainable and efficient cloud environment could be diminished as we may be unable to control the quality or timeliness of the implementation and support of our products by our SI partners.
Further, to the extent global events adversely affects our business, results of operations, or financial condition, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section. Our customers may defer or forego purchases of our products in the event of weakened global economic conditions, political transitions, and industry consolidation.
Further, to the extent global events adversely affect our business, results of operations, or financial condition, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section. Our customers may defer or forego purchases of our products in the event of weakened global economic conditions, political transitions, and industry consolidation.
Our software and cloud services involve the storage and transmission of customer data, including in some cases, personal data, and security breaches could result in the loss of this information, which in turn could result in litigation, breach of contract claims, indemnity obligations, harm to our reputation, and other liabilities for us.
Our software and cloud services involve the storage and transmission of customer data, including in some cases, personal data, and security incidents or breaches could result in the loss of this information, which in turn could result in litigation, breach of contract claims, indemnity obligations, harm to our reputation, and other liabilities for us.
Use of AI technology by our workforce, even when used consistently with our guidelines, may result in allegations or claims against us related to violation of third-party intellectual property rights, unauthorized access to or use of proprietary information, or failure to comply with open source software requirements.
Use of AI technologies by our workforce, even when used consistently with our guidelines, may result in allegations or claims against us related to violation of third-party intellectual property rights, unauthorized access to or use of proprietary information, or failure to comply with open source software requirements.
A prolonged third-party service disruption affecting our platform for any of the foregoing reasons could be detrimental to our business. We may also incur significant costs for taking other actions in preparation for, or in reaction to, events that disrupt the third-party services we use.
A prolonged third-party service disruption affecting our supply chain or our platform for any of the foregoing reasons could be detrimental to our business. We may also incur significant costs for taking other actions in preparation for, or in reaction to, events that disrupt the third-party services we use.
While we expect this reliance to decrease over time as our revenue, customer base, and subscription services as a percentage of revenue grows, we expect that we will continue to depend upon a relatively small number of customers for a significant portion of our revenue and ARR for the foreseeable future.
While we expect this reliance to decrease over time as our revenue, customer base, and subscription services as a percentage of revenue grow, we expect that we will continue to depend upon a relatively small number of customers for a significant portion of our revenue and ARR for the foreseeable future.
Factors that may affect our results of operations include: • the impact of economic downturns and related market volatility caused by economic volatility, inflation, bank failures and associated financial instability and crises, or other national and worldwide events on our business and the businesses of our customers, partners, and vendors; • our ability to attract new domestic and international customers and renew existing customers; • seasonal buying patterns of our potential customers and our ability to sell additional software and services to existing customers; • the proportion and timing of subscription sales as opposed to term software licenses, and the variations in revenue recognition between these contract types; • changes in contract durations of term software licenses and renewals or modifications of customer contracts; • increases in costs related to cloud operations, cybersecurity, product development, and services; • our ability to develop and achieve market adoption of cloud-based services, including the impact of our customers transitioning from term software licenses to subscription services; • erosion in services margins or significant fluctuations in services revenue caused by changing customer demand, negotiated professional services billing rates, investments in customer implementation and migration projects, or fixed fee contracts; • our ability to enter into contracts on favorable terms, including terms related to price, payment timing, service levels, acceptance, and product delivery, especially with customers and prospects that possess substantial negotiating leverage and procurement expertise; • the incurrence of penalties or having to renegotiate contract terms for failing to meet certain contractual obligations, including service levels, product development cycles and functionality, and implementation times and objectives; • security and privacy concerns related to employee data, customer data, and systems that are accessed or otherwise used by our hybrid workforce and customers; • employee retention, the ability to hire and onboard appropriate personnel, and the timing of hiring personnel and employee related expenses; • our ability to realize expected benefits from our acquisitions and other strategic business transactions; • reductions in our customers’ budgets for information technology purchases and delays in their purchasing decisions; Table of Conten t s • the impact of a recession or any other adverse global economic condition on our business, including public health crises, such as epidemics and pandemics, geographic and political conflicts, trade tariffs, trade agreements, and other uncertainties that may cause a delay in entering into, a failure to enter into, or cancel significant customer agreements or the fulfillment of professional service arrangements; • adverse litigation judgments, dispute-related settlement payments, or litigation-related costs; • future accounting pronouncements, changes in accounting rules, new tax laws or regulations, or tax interpretations and our related accounting policies, interpretations, and controls; • fluctuations in foreign currency exchange rates; and • the effects of inflation or deflation in the economies in which we operate, and their impact on interest rates, collection timeframes, and our revenue given the multi-year term of most customer agreements.
Factors that may affect our results of operations include: • the impact of economic downturns and related market volatility caused by economic volatility, inflation, bank failures and associated financial instability and crises, political uncertainties, or other national and worldwide events on our business and the businesses of our customers, partners, and vendors; • our ability to attract new domestic and international customers and renew existing customers; • seasonal buying patterns of our potential customers and our ability to sell additional software and services to existing customers; • the proportion and timing of subscription sales as opposed to term software licenses, and the variations in revenue recognition between these contract types; • changes in contract durations of term software licenses and renewals or modifications of customer contracts; • increases in costs related to cloud operations, cybersecurity, product development, and services; • our ability to expand market adoption of cloud-based services, including the impact of our customers transitioning from term software licenses to subscription services; • erosion in services margins or significant fluctuations in services revenue caused by changing customer demand, negotiated professional services billing rates, investments in customer implementation and migration projects, utilization rates, or fixed fee contracts; • our ability to enter into contracts on favorable terms, including terms related to price, payment timing, service levels, acceptance, and product delivery, especially with customers and prospects that possess substantial negotiating leverage and procurement expertise; • the incurrence of penalties or having to renegotiate contract terms for failing to meet certain contractual obligations, including service levels, product development cycles and functionality, and implementation times and objectives; • security and privacy concerns related to employee data, customer data, and systems that are accessed or otherwise used by our hybrid workforce and customers; • employee retention, the ability to hire and onboard appropriate personnel, and the timing of hiring personnel and employee related expenses; • our ability to realize expected benefits from our acquisitions and other strategic business transactions; • reductions in our customers’ budgets for information technology purchases and delays in their purchasing decisions; • the impact of a recession or any other adverse global economic condition on our business, including public health crises, such as epidemics and pandemics, changes in political climate, geographic and political conflicts, and uncertainties with respect to trade tariffs, trade agreements, and other trade issues that may cause a delay in entering into, a failure to enter into, or cancellation of significant customer agreements or the fulfillment of professional service arrangements; • adverse litigation judgments, dispute-related settlement payments, or litigation-related costs; • future accounting pronouncements, changes in accounting rules, new tax laws or regulations, or tax interpretations and our related accounting policies, interpretations, and controls; • fluctuations in foreign currency exchange rates; and • the effects of inflation or deflation in the economies in which we operate, and their impact on interest rates, collection timeframes, and our revenue given the multi-year term of most customer agreements.
Transactions relating to our Convertible Senior Notes may affect the value of our common stock. The conversion of some or all of the Convertible Senior Notes would dilute the ownership interests of existing stockholders to the extent we satisfy our conversion obligation by delivering shares of our common stock upon any conversion of such Convertible Senior Notes.
Transactions relating to our 2029 Convertible Senior Notes may affect the value of our common stock. The conversion of some or all of the 2029 Convertible Senior Notes may dilute the ownership interests of existing stockholders to the extent we satisfy our conversion obligation by delivering shares of our common stock upon any conversion of such Convertible Senior Notes.
In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations thereunder.
In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; 34 Table of Contents provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations thereunder.
In all events, the development, marketing and use of AI technologies, including, in particular, generative AI, presents emerging ethical and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, additional costs, and/or legal liability.
In all events, the development, marketing and use of AI technologies presents emerging ethical and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, additional costs, and/or legal liability.
In addition, because our contracts are characterized by large annual payments, significant fluctuations in foreign currency exchange rates that coincide with annual payments may affect our cash flows, revenue or financial results in such quarter.
In addition, because our contracts are characterized by large annual payments, significant fluctuations in foreign currency exchange rates that coincide with annual payments may affect our cash flows, revenue or financial results in such quarters.
We have experienced consistent growth and expect to continue to expand our operations, including the number of employees and the locations and scope of our international operations. In particular, we have been expanding and plan to continue to expand our operations in India.
We have experienced consistent growth and expect to continue expanding our operations, including increasing the number of employees and broadening the locations and scope of our international operations. In particular, we have been expanding and plan to continue to expand our operations in India.
In addition, time-consuming or difficult migrations and implementations may also increase the amount of services personnel we must allocate to the project, potentially without commensurate compensation, thereby increasing our costs, lowering our services margin, and adversely affecting our business, results of operations, and financial condition.
In addition, time-consuming or difficult migrations and implementations may also increase the amount of 21 Table of Contents services personnel we must allocate to the project, potentially without commensurate compensation, thereby increasing our costs, lowering our services margin, and adversely affecting our business, results of operations, and financial condition.
Our workforce is exposed to and uses AI technologies for certain tasks related to our business. We have guidelines and policies specifically directed at the use of AI tools in the workplace.
Our workforce is exposed to and is encouraged to use AI technologies for certain tasks related to our business. We have guidelines and policies specifically directed at the use of AI tools in the workplace.
In addition, our employees may use AI tools for various design and engineering tasks, such as writing code and building content, and these AI technology tools may produce facially correct but factually inaccurate or flawed responses that could lead to errors in our decision-making, solution development, or other business activities, which could have a negative impact on our business, operating results and financial condition.
In addition, our employees may use AI tools for various tasks, such as writing code and building content, and these AI technology tools may produce responses that appear facially correct but that are factually inaccurate or flawed, which could lead to errors in our decision-making, solution development, or other business activities and have a negative impact on our business, operating results and financial condition.
Additionally, we rely on hundreds of software programmers to design our proprietary technologies, and although we take steps to prevent our programmers from including objectionable open source Table of Conten t s software in the technologies and software code that they design, write and modify, we do not exercise complete control over the development efforts of our programmers and we cannot be certain that our programmers have not incorporated such open source software into our proprietary products and technologies or that they will not do so in the future.
Additionally, we rely on hundreds of software programmers to design our proprietary technologies, and although we take steps to prevent our programmers from including objectionable open source software in the technologies and software code that they design, write and modify, we do not exercise complete control over the development efforts of our programmers and we cannot be certain that our programmers have not incorporated such open source software into our proprietary products and technologies or that they will not do so in the future.
We rely upon a combination of trademark, trade secret, copyright, patent, and unfair competition laws, as well as license agreements and other contractual provisions, to do so. We have filed, and may in the future file, patent applications related to certain of our innovations.
We rely upon a combination of trademark, trade secret, copyright, patent, and unfair competition laws, as well as license agreements and other contractual provisions, to do so. 30 Table of Contents We have filed, and may in the future file, patent applications related to certain of our innovations.
If our AI development, deployment, content labeling or governance is ineffective or inadequate, it may result in incidents that impair the public acceptance of AI solutions or cause harm to individuals, customers or society, or result in our offerings not working as intended or producing unexpected outcomes.
If our AI technologies development, deployment or governance is ineffective or inadequate, it may result in incidents that impair the public acceptance of AI solutions or cause harm to individuals, customers or society, or result in our offerings not working as intended or producing unexpected outcomes.
Further, our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Table of Conten t s United States District Court for the Northern District of California will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”), as we are based in the State of California.
Further, our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the United States District Court for the Northern District of California will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”), as we are based in the State of California.
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Convertible Senior Notes or make cash payments upon conversions thereof.
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and settle the 2029 Convertible Senior Notes or make cash payments upon conversions thereof.
Such losses and losses due to future events may adversely impact our current or potential customers, which may prevent us from maintaining or expanding our customer base and increasing our revenue, as such events may cause customers to postpone purchases and professional service engagements or to discontinue existing projects.
Such events may adversely impact our current or potential customers, which may prevent us from maintaining or expanding our customer base and increasing our revenue, as such events may cause customers to postpone purchases and professional service engagements or to discontinue existing projects.
Competition for qualified personnel is particularly intense in the San Francisco Bay Area, where our headquarters are located, though we also face significant competition in all of our domestic and foreign development centers. Further, significant amounts of time and Table of Conten t s resources are required to train technical, sales, services, operations, and other personnel.
Competition for qualified personnel is particularly intense in the San Francisco Bay Area, where our headquarters are located, though we also face significant competition in all of our domestic and foreign development centers. Further, significant amounts of time and resources are required to train technical, sales, services, operations, and other personnel.
We may not be able to compete effectively and competitive pressures may prevent us from acquiring and maintaining the customer base necessary for us to increase our revenue and profitability. In addition, the insurance industry is evolving rapidly, and we anticipate the market for cloud-based solutions will become increasingly competitive.
We may not be able to compete effectively and competitive pressures may prevent us from acquiring and maintaining the customer base necessary for us to increase our revenue and profitability. 16 Table of Contents In addition, the insurance industry is evolving rapidly, and we anticipate the market for cloud-based solutions will become increasingly competitive.
In connection with the issuance of the Convertible Senior Notes, we entered into capped call transactions with certain financial institutions (the “option counterparties”).
In connection with the issuance of the 2029 Convertible Senior Notes, we entered into capped call transactions with certain financial institutions (collectively, the “option counterparties”).
Complying with such numerous and complex regulations in the event of a data security breach would be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional liability. We may also be contractually required to notify customers or other counterparties of a security incident, including a data security breach.
Complying with such numerous and complex regulations in the event of a cybersecurity incident or breach would be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional liability. We may also be contractually required to notify customers or other counterparties of a cybersecurity incident or breach.
Our products are often installed and used in large-scale computing environments with different operating systems, system management software, and equipment and networking configurations, which may cause errors or failures in our products or may expose undetected errors, failures, or bugs in our products.
Our products are often used in large-scale computing environments with different operating systems, system management software, and equipment and networking configurations, which may result in errors or failures or expose undetected errors, failures, or bugs in our products.
Our future effective tax rates and the value of our deferred tax assets could be adversely affected by changes in, interpretations of, and guidance regarding tax laws, including impacts of the Tax Cuts and Jobs Act of 2017, the Coronavirus Aid, Relief, Economic Security Act of 2020, the Inflation Reduction Act of 2022, and certain OECD proposals, including the implementation of the global minimum tax under the Pillar Two model rules.
Our future effective tax rates and the value of our deferred tax assets could be adversely affected by changes in, interpretations of, and guidance regarding tax laws, including impacts of the Tax Cuts and Jobs Act of 2017, the Coronavirus Aid, Relief, Economic Security Act of 2020, the Inflation Reduction Act of 2022, the One Big Beautiful Bill Act of 2025, and certain OECD proposals, including the implementation of the global minimum tax under the Pillar Two model rules.
AI technologies, including without limitation generative AI, may create content that appears facially correct but is factually inaccurate or flawed. Our customers, employees, or others may rely on or use such factually incorrect or flawed content to their detriment, which may expose us to brand or reputational harm, competitive harm, and/or legal liability.
AI technologies may create content that appears facially correct but is factually inaccurate or flawed. Our customers, employees, or others may rely on or use such factually incorrect or flawed content to their detriment, which may expose us to brand or reputational harm, competitive harm, and/or legal liability.
The nature of these development cycles may cause us to experience delays between the time we incur expenses associated with research and development and the time we generate revenue, if any, from such expenses.
The nature of these development cycles may cause us to 20 Table of Contents experience delays between the time we incur expenses associated with research and development and the time we generate revenue, if any, from such expenses.
If our development efforts do not develop services, products or features that our customers find valuable, then we might incur impairment charges related to our capitalized software development costs. Table of Conten t s We operate a hybrid in-person and remote workforce, which will subject us to certain operational challenges and risks and potential harm to our business.
If our development efforts do not develop services, products or features that our customers find valuable, then we might incur impairment charges related to our capitalized software development costs. We operate a hybrid in-person and remote workforce, which will subject us to certain operational challenges and risks and potential harm to our business.
A default under the Indenture or the fundamental change itself could also lead to a default under agreements governing our future indebtedness.
A default under the 2029 Indenture or the fundamental change itself could also lead to a default under agreements governing our existing or future indebtedness.
Table of Conten t s Our ability to sell our products is highly dependent on the quality of our professional services and technical support services and the support of our SI partners, and the failure of us or our SI partners to offer high-quality professional services or technical support services could damage our reputation and adversely affect our ability to sell our products to new customers and renew agreements with our existing customers.
Our ability to sell our products is highly dependent on the quality of our professional services and technical support services and the support of our SI partners, and the failure of us or our SI partners to offer high-quality professional services or technical support services could damage our reputation and adversely affect our ability to sell our products to new customers and renew agreements with our existing customers.
We operate a hybrid work environment in which a significant portion of our workforce works either in-person on a part-time basis or remotely on a permanent basis. As a result, we are subject to the challenges and risks of having a remote and hybrid workforce.
We, and many of our third-party providers, operate a hybrid work environment in which a significant portion of our workforce works either in-person on a part-time basis or remotely on a permanent basis. As a result, we are subject to the challenges and risks of having a remote and hybrid workforce.
This means that if we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value would be recognized as services revenue, but our reported ARR amount would Table of Conten t s not be impacted.
This means that if we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value would be recognized as services revenue, but our reported ARR amount would not be impacted.
Table of Conten t s Risks Related to Data Security and Privacy, Intellectual Property, and Information Technology If our products experience cybersecurity breaches, there is unauthorized access to our customers’ data, or unauthorized use of our products or any of these events are perceived to happen, we may lose current or future customers and our reputation and business may be harmed.
Risks Related to Data Security and Privacy, Intellectual Property, and Information Technology If our products experience cybersecurity incidents or breaches, there is unauthorized access to our customers’ data, or unauthorized use of our products or any of these events are perceived to happen, we may lose current or future customers and our reputation and business may be harmed.
We rely on third-party technology and systems for a variety of services, including, without limitation, encryption and authentication technology, employee email, content delivery to customers, back-office support, and other functions. Our ability to control or prevent breaches of any of these systems may be beyond our control.
We rely on third-party technology and systems for a variety of information technology systems and related products and services, including, without limitation, cloud computing services, encryption and authentication technology, employee email, content delivery to customers, back-office support, and other functions. Our ability to control or prevent breaches of any of these systems may be beyond our control.
Table of Conten t s We attempt to protect our intellectual property, technology, and confidential information by generally requiring our employees and consultants to enter into confidentiality agreements and assignment of inventions agreements and third parties to enter into nondisclosure agreements, all of which offer only limited protection.
We attempt to protect our intellectual property, technology, and confidential information by generally requiring our employees and consultants to enter into confidentiality agreements and assignment of inventions agreements and third parties to enter into nondisclosure agreements, all of which offer only limited protection.
As of July 31, 2024, $138.2 million of the share repurchase program remained available for future repurchases.
As of July 31, 2025, $138.2 million of the share repurchase program remained available for future repurchases.
As we continue to expand the number of our customers and products available to our customers, we may not be able to scale our technology to accommodate the increased capacity requirements, which may result in interruptions or delays in our products.
As we continue to expand the number of our customers and products available to our customers, we and/or our third-party service providers may not be able to scale our technology to accommodate the increased capacity requirements, which may result in interruptions or delays in our products.
The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that as a publicly traded company we disclose whether our internal control over financial reporting and disclosure controls and procedures are effective.
The Sarbanes-Oxley Act requires, among other things, that as a publicly traded company we disclose whether our internal control over financial reporting and disclosure controls and procedures are effective.
Further, the development of next-generation solutions that utilize new and advanced features, including AI and machine learning, involves making predictions regarding the willingness of the market to adopt such technologies over legacy solutions. We may be required to commit significant resources to developing new products before knowing whether such investment will result in products that the market will accept.
Further, the development of next-generation solutions that utilize new and advanced features using or incorporating AI technologies involves making predictions regarding the willingness of the market to adopt such technologies over legacy solutions. We may be required to commit significant resources to developing new products before knowing whether such investment will result in products that the market will accept.
Our revenue, results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Australian Dollar, British Pound, Canadian Dollar, Euro, Indian Rupee, and Polish Zloty. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
Our revenue, results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Australian Dollar, British Pound, Canadian Dollar, Euro, Indian Rupee, Japanese Yen, New Zealand Dollar, Polish Zloty, and Swiss Franc. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
Table of Conten t s We currently do not intend to pay dividends on our common stock and, consequently, the only opportunity to achieve a return on investment is if the price of our common stock appreciates. We currently do not plan to declare dividends on shares of our common stock in the foreseeable future.
We currently do not intend to pay dividends on our common stock and, consequently, the only opportunity to achieve a return on investment is if the price of our common stock appreciates. 33 Table of Contents We currently do not plan to declare dividends on shares of our common stock in the foreseeable future.
If we are unsuccessful in adapting to the requirements of any new standard, or if changes to our go-to-market strategy create new risks, then we may experience greater volatility in our quarterly and annual results, which may cause our stock price to decline.
If we are unsuccessful in adapting to the requirements of any new standard, or if changes to our business model create new risks, then we may experience greater volatility in our quarterly and annual results, which may cause our stock price to decline.
New EU laws related to the use of data, including in the Digital Services Act, the EU Data Act, and the EU Artificial Intelligence Act (“EU AI Act”), may impose additional rules and restrictions on the use of the data in our products.
New EU laws related to the use of data, including the Digital Services Act, the EU Data Act, and the EU AI Act, may impose additional rules and restrictions on the use of the data in our products.
To address demand trends in the P&C insurance industry, we offer customers the use of our software products through a cloud-based offering sold on a subscription basis in addition to our self-managed offering. Our subscription business model has required a considerable investment of technical, operational, financial, legal, and sales resources.
To address demand trends in the P&C insurance industry, we offer customers the use of our software products primarily through a cloud-based offering sold on a subscription basis. Our subscription business model has required, and will continue to require, a considerable investment of technical, operational, financial, legal, and sales resources.
For example, we may need to notify governmental authorities and/or affected individuals with respect to certain data security breach in light of a growing number of laws, including those in the European Economic Area (“EEA”), U.K., and the United States.
For example, we may need to notify governmental authorities and/or affected individuals with respect to certain cybersecurity incidents or breaches in light of a growing number of laws, including those in the European Economic Area (“EEA”), U.K., and the United States.
In addition, our ability to make payments may be limited by law, by regulatory authority, or by agreements governing our future indebtedness.
Additionally, our ability to make payments may be limited by law, by regulatory authority, or by agreements governing our future indebtedness.
We will continue to experience fluctuations in foreign currency exchange rates, which, if material, may harm our revenue, ARR, or results of operations. The conditional conversion feature of the Convertible Senior Notes, if triggered, may adversely affect our financial condition and results of operations.
We will continue to experience fluctuations in foreign currency exchange rates, which, if material, may harm our revenue, ARR, or results of operations. 39 Table of Contents The conversion feature of the 2029 Convertible Senior Notes may adversely affect our financial condition and results of operations.
Our business may not continue to generate cash flow from operations in the future sufficient to satisfy our Table of Conten t s obligations under our existing indebtedness, and any future indebtedness we may incur, and to make necessary capital expenditures.
Our business may not continue to generate cash flow from operations in the future sufficient to satisfy our obligations under our existing indebtedness, and any future indebtedness we may incur, and to make necessary capital expenditures.
We are continually analyzing and refining our pricing and packaging models to adapt to this dynamic environment. For example, we may need to change our pricing in future periods in response to market demands, the inflation and interest rate environment or increased Table of Conten t s costs.
We are continually analyzing and refining our pricing and packaging models to adapt to this dynamic environment. For example, we may need to change our pricing in future periods in response to market demands, the inflation, tariffs, and interest rate environment, or increased costs.
Item 1A. Risk Factors A description of the risks and uncertainties associated with our business is set forth below. You should carefully consider such risks and uncertainties, together with the other information contained in this Annual Report on Form 10-K, and in our other public filings. The risks and uncertainties described below are not the only ones we face.
Item 1A. Risk Factors A description of the risks and uncertainties associated with our business is set forth below. You should carefully consider such risks and uncertainties, together with the other information contained in this Annual Report on Form 10-K, and in our other public filings.
Our revenue and ARR are dependent on orders from customers in the P&C insurance industry, which may be adversely affected by worldwide economic, environmental, public health, and political conditions. A relatively small number of customers have historically accounted for a significant portion of our revenue. The composition of our individual top customers has and will vary from year to year.
Our revenue and ARR are dependent on orders from customers in the P&C insurance industry, which may be adversely affected by worldwide economic, environmental, public health, and political conditions. A relatively small number of customers have historically accounted for a significant portion of our revenue.
Our subscription and support revenue was 56% and 48% of total revenue for fiscal years 2024 and 2023, respectively. Our subscription and support revenue produces lower gross margins than our license revenue.
Our subscription and support revenue was 61% and 56% of total revenue for fiscal years 2025 and 2024, respectively. Our subscription and support revenue produces lower gross margins than our license revenue.
Our current international operations and our plans to expand our international operations subject us to a variety of risks, including: • increased management, travel, infrastructure, legal, and compliance costs associated with having multiple international operations; • unique terms and conditions in contract negotiations imposed by customers in foreign countries; • longer payment cycles and difficulties in enforcing contracts and collecting accounts receivable; • the need to localize our contracts and our products for international customers; • lack of familiarity with and unexpected changes in foreign regulatory requirements; • increased exposure to fluctuations in currency exchange rates, especially on revenue and ARR; • highly inflationary international economies and related governments; • geographic and political conflicts, such as the wars between Israel and Hamas and between Russia and Ukraine and the escalating tensions in the South China Sea; • the burdens and costs of complying with a wide variety of foreign laws and legal standards, including without limitation any new or evolving laws and regulations relating to the use of data in AI, generative AI, machine learning technologies, climate-related disclosures, and the General Data Protection Regulation in the European Union (“EU”) and the U.K.; • compliance with the U.S.
Our current international operations and our plans to expand our international operations subject us to a variety of risks, including: • increased management, travel, infrastructure, legal, and compliance costs associated with having multiple international operations; • unique terms and conditions in contract negotiations imposed by customers in foreign countries; • longer payment cycles and difficulties in enforcing contracts and collecting accounts receivable; • the need to localize our contracts and our products for international customers; • lack of familiarity with and unexpected changes in foreign regulatory requirements, including requirements around employee compensation and benefits; • increased exposure to fluctuations in currency exchange rates, especially on revenue and ARR; • highly inflationary international economies and related governments; • geographic and political conflicts, such as the war between Russia and Ukraine, continued geopolitical instability in the Middle East, and the escalating tensions in the South China Sea; • the burdens and costs of complying with a wide variety of foreign laws and legal standards, including without limitation any new or evolving laws and regulations relating to the use of data in AI, generative AI, machine learning technologies, climate-related disclosures, operational resilience, data protection and privacy, particularly in the European Union (“EU”) and the United Kingdom (“U.K.”); • compliance with the U.S.
The use of constantly evolving technologies by diverse threat actors, such as the increased use of AI technologies, are sophisticated and complex and may increase the velocity of such threats, frequency of incident cases, and otherwise magnifying the risks associated with these types of attacks.
The use of constantly evolving technologies by diverse threat actors, including state-sponsored organizations, opportunistic hackers and hacktivists, such as the increased use of AI technologies, are sophisticated and complex and may increase the velocity of such threats, frequency of incident cases, and otherwise magnifying the risks associated with these types of attacks.
While we have taken, and are continually updating and enhancing, steps to protect the confidential information and customer data to which we have access, including confidential information we may obtain through our customer support services or customer usage of our cloud-based services, our security measures or the security measures of companies we rely on, such as AWS, could be breached.
While we have taken, and are continually updating and enhancing, steps to protect the confidential information, customer data and personal data that we steward, including confidential information we may obtain through our customer support services or customer usage of our cloud-based services, our security measures or the security measures of companies we rely on could be breached.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, management updates the Risk Committee, as necessary, regarding cybersecurity incidents. Table of Conten t s The Risk Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cybersecurity risk management program.
Biggest changeIn addition, management updates the Risk Committee, as necessary, regarding cybersecurity incidents. The Risk Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cybersecurity risk management program.
However, we face ongoing cybersecurity risks, including threats that might become more sophisticated and effective over time, and we cannot anticipate when or the extent to which cybersecurity breaches will materially affect the Company.
However, we face ongoing cybersecurity risks, including threats that might become more sophisticated and effective over time, and we cannot anticipate when or the extent to which cybersecurity incidents or breaches will materially affect the Company.
Board members receive reports on cybersecurity risks from our Chief Information Security Officer (“CISO”), internal security staff and/or external experts as part of the Board’s continuing education on topics that impact public companies. Our management team, including our CISO, is responsible for assessing and managing our material risks from cybersecurity threats.
Board members receive reports on cybersecurity risks from our Chief Information Security Officer (“CISO”), internal security staff and/or external experts as part of the Board’s continuing education on topics that impact public companies. 42 Table of Contents Our management team, including our CISO, is responsible for assessing and managing our material risks from cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of July 31, 2024, we also lease facilities for our sales, services, development, operations and administrative activities in various locations in the United States and around the world, including in the Americas, Europe, and Asia-Pacific. We believe that our facilities are suitable to meet our current needs.
Biggest changeAs of July 31, 2025, we also lease facilities for our sales, services, development, operations and administrative activities in various locations in the United States and around the world, including in the Americas, Europe, and Asia-Pacific. We believe that our facilities are suitable to meet our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs described in Note 8 “Commitments and Contingencies” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, which is incorporated by reference herein, we are not party to any material pending legal proceedings.
Biggest changeAs described in Note 9 “Commitments and Contingencies” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, which is incorporated by reference herein, we are not party to any material pending legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeData for the NASDAQ Composite Total Return Index and S&P Software & Services Select Industry Index assume reinvestment of dividends. 7/31/2019 7/31/2020 7/31/2021 7/31/2022 7/31/2023 7/31/2024 Guidewire Software, Inc. $ 100.00 $ 115.26 $ 112.85 $ 76.14 $ 83.08 $ 146.97 NASDAQ Composite-Total Return Index $ 100.00 $ 132.78 $ 182.62 $ 155.31 $ 181.43 $ 224.29 S&P Software & Services Select Industry Index $ 100.00 $ 118.37 $ 175.17 $ 123.67 $ 146.47 $ 160.93 Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities None.
Biggest changeData for the NASDAQ Composite Total Return Index and S&P Software & Services Select Industry Index assume reinvestment of dividends. 7/31/2020 7/31/2021 7/31/2022 7/31/2023 7/31/2024 7/31/2025 Guidewire Software, Inc. $ 100.00 $ 97.91 $ 66.05 $ 72.09 $ 127.55 $ 192.27 NASDAQ Composite-Total Return Index $ 100.00 $ 137.53 $ 116.96 $ 136.63 $ 168.91 $ 204.14 S&P Software & Services Select Industry Index $ 100.00 $ 147.80 $ 104.47 $ 123.74 $ 135.95 $ 162.85 45 Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities None. 46 Table of Contents Item 6. [Reserved]
As of July 31, 2024, we had 32 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
As of July 31, 2025, we had 31 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
The following graph shows a comparison of the cumulative total return for our common stock, the NASDAQ Composite-Total Return Index and S&P Software & Services Select Industry Index for the period from July 31, 2019 through July 31, 2024. Such returns are based on historical results and are not intended to suggest future performance.
The following graph shows a comparison of the cumulative total return for our common stock, the NASDAQ Composite-Total Return Index and S&P Software & Services Select Industry Index for the period from July 31, 2020 through July 31, 2025. Such returns are based on historical results and are not intended to suggest future performance.
Table of Conten t s Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933 or the Exchange Act.
Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933 or the Exchange Act.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol “GWRE.” On July 31, 2024, the last reported sale price of our common stock on the New York Stock Exchange for fiscal year 2024 was $150.07 per share.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol “GWRE.” On July 31, 2025, the last reported sale price of our common stock on the New York Stock Exchange for fiscal year 2025 was $226.22 per share.
Removed
Table of Conten t s Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table reconciles the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below (in thousands, except share and per share data): Fiscal years ended July 31, 2024 2023 Gross profit reconciliation: GAAP gross profit $ 583,361 $ 458,211 Non-GAAP adjustments: Stock-based compensation 32,624 33,793 Amortization of intangibles 1,940 3,360 Non-GAAP gross profit $ 617,925 $ 495,364 Income (loss) from operations reconciliation: GAAP income (loss) from operations $ (52,573) $ (149,490) Non-GAAP adjustments: Stock-based compensation 146,460 142,842 Amortization of intangibles 5,468 6,888 Acquisition consideration holdback 143 2,939 Net impact of assignment of lease agreement (1) — 8,502 Non-GAAP income (loss) from operations $ 99,498 $ 11,681 Net income (loss) reconciliation: GAAP net income (loss) $ (6,103) $ (111,855) Non-GAAP adjustments: Stock-based compensation 146,460 142,842 Amortization of intangibles 5,468 6,888 Acquisition consideration holdback 143 2,939 Net impact of assignment of lease agreement (1) — 8,502 Amortization of debt issuance costs 1,732 1,703 Changes in fair value of strategic investment 1,957 802 Gain on sale of strategic investment (2) (1,803) — Tax impact of non-GAAP adjustments (33,333) (22,611) Non-GAAP net income (loss) $ 114,521 $ 29,210 Tax provision (benefit) reconciliation: GAAP tax provision (benefit) $ (20,735) $ (22,239) Table of Conten t s Non-GAAP adjustments: Stock-based compensation 13,930 92,849 Amortization of intangibles 520 4,677 Acquisition consideration holdback 25 1,924 Net impact of assignment of lease agreement (1) — 3,196 Amortization of debt issuance costs 165 1,105 Changes in fair value of strategic investment 208 (103) Gain on sale of strategic investment (2) (196) — Tax impact of non-GAAP adjustments 18,681 (81,037) Non-GAAP tax provision (benefit) $ 12,598 $ 372 Net income (loss) per share reconciliation: GAAP net income (loss) per share – diluted $ (0.07) $ (1.36) Non-GAAP adjustments: Stock-based compensation 1.78 1.74 Amortization of intangibles 0.07 0.08 Acquisition consideration holdback (0.01) 0.04 Net impact of assignment of lease agreement (1) — 0.10 Amortization of debt issuance costs 0.02 0.02 Changes in fair value of strategic investment 0.02 0.01 Gain on sale of strategic investment (2) (0.02) — Tax impact of non-GAAP adjustments (0.41) (0.28) Interest expense on convertible debt (3) 0.05 — Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation (0.08) — Non-GAAP net income (loss) per share – diluted $ 1.35 $ 0.35 Shares used in computing Non-GAAP net income (loss) per share amounts: GAAP weighted average shares – diluted 82,291,483 82,176,629 Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation 5,072,080 466,516 Pro forma weighted average shares – diluted 87,363,563 82,643,145 (1) During the three months ended April 31, 2023, the Company recorded in general and administrative expenses a net loss of $8.5 million related to the assignment of the lease agreement for the remaining lease term of the Company’s previous headquarters.
Biggest changeThe following table reconciles the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below (in thousands, except share and per share data): Fiscal years ended July 31, 2025 2024 Gross profit reconciliation: GAAP gross profit $ 752,053 $ 583,361 Non-GAAP adjustments: Stock-based compensation 34,848 32,624 Amortization of intangibles 2,255 1,940 Non-GAAP gross profit $ 789,156 $ 617,925 Income (loss) from operations reconciliation: GAAP income (loss) from operations $ 41,068 $ (52,573) Non-GAAP adjustments: Stock-based compensation 161,556 146,460 Amortization of intangibles 5,444 5,468 Acquisition consideration holdback 177 143 Non-GAAP income (loss) from operations $ 208,245 $ 99,498 Net income (loss) reconciliation: GAAP net income (loss) $ 69,804 $ (6,103) Non-GAAP adjustments: Stock-based compensation 161,556 146,460 Amortization of intangibles 5,444 5,468 Acquisition consideration holdback 177 143 Amortization of debt issuance costs 3,758 1,732 Changes in fair value of strategic investment 2,130 1,957 Gain on sale of strategic investment (3,671) (1,803) Retirement of debt (1) 53,565 — Tax impact of non-GAAP adjustments (64,888) (33,333) Non-GAAP net income (loss) $ 227,875 $ 114,521 Tax provision (benefit) reconciliation: GAAP tax provision (benefit) $ (20,409) $ (20,735) Non-GAAP adjustments: Stock-based compensation 25,414 13,930 61 Table of Contents Amortization of intangibles 858 520 Acquisition consideration holdback 31 25 Amortization of debt issuance costs 591 165 Changes in fair value of strategic investment 365 208 Gain on sale of strategic investment (463) (196) Retirement of debt (1) 6,756 — Tax impact of non-GAAP adjustments 31,336 18,681 Non-GAAP tax provision (benefit) $ 44,479 $ 12,598 Net income (loss) per share reconciliation: GAAP net income (loss) per share – diluted $ 0.81 $ (0.07) Non-GAAP adjustments: Stock-based compensation 1.89 1.78 Amortization of intangibles 0.06 0.07 Acquisition consideration holdback — (0.01) Amortization of debt issuance costs 0.04 0.02 Changes in fair value of strategic investment 0.02 0.02 Gain on sale of strategic investment (0.04) (0.02) Retirement of debt (1) 0.63 — Tax impact of non-GAAP adjustments (0.76) (0.41) Interest expense on convertible debt — 0.05 Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation — (0.08) Non-GAAP net income (loss) per share – diluted $ 2.65 $ 1.35 Shares used in computing Non-GAAP net income (loss) per share amounts: GAAP weighted average shares – diluted 85,911,653 82,291,483 Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation — 5,072,080 Pro forma weighted average shares – diluted 85,911,653 87,363,563 (1) During the fiscal year ended July 31, 2025, we recorded a $53.6 million loss on retirement of debt in other income (expense) comprised of a $53.3 million loss on extinguishment of a portion of the 2025 Convertible Senior Notes and a $0.3 million loss on the induced conversion of a portion of the 2025 Convertible Senior Notes.
While there are a number of significant accounting policies, methods, and estimates affecting our consolidated financial statements, which are described in Note 1 “The Company and a Summary of Significant Accounting Policies and Estimates” to our consolidated financial statements included in this Annual Report on Form 10-K, our revenue recognition policies are critical to the periods presented.
While there are a number of significant accounting policies, methods, and estimates affecting our consolidated financial statements, which are described in Note 1 “The Company and Summary of Significant Accounting Policies and Estimates” to our consolidated financial statements included in this Annual Report on Form 10-K, our revenue recognition policies are critical to the periods presented.
Our support fees are typically priced as a fixed percentage of the associated term license fees. We generally invoice support annually in advance. Support related to subscription arrangements is included in subscription revenue, as support is not quoted or priced separately from the subscription services. License A substantial majority of our license revenue consists of term license fees.
Our support fees are typically priced as a fixed percentage of the associated term license fees. We generally invoice support annually in advance. Support related to subscription arrangements is included in subscription revenue, as support is not quoted or priced separately from the subscription services. License The majority of our license revenue consists of term license fees.
General and Administrative Our general and administrative expenses include executive, finance, human resources, information technology, information security, legal, facilities, and corporate development and strategy functions, and primarily consist of personnel costs and, to a lesser extent, professional services, software costs, and cloud hosting costs.
General and Administrative Our general and administrative expenses include executive, finance, human resources, information technology, information security, legal, and corporate development and strategy functions, and primarily consist of personnel costs and, to a lesser extent, professional services, software costs, and cloud hosting costs.
Cash Flows Our cash flows from operations are significantly impacted by timing of invoicing and collections of accounts receivable, annual bonus payments, as well as payments of payroll, commissions, payroll taxes, and other taxes.
Cash Flows Our cash flows from operations are significantly impacted by the timing of invoicing and collections of accounts receivable, annual bonus payments, as well as payments of payroll, commissions, payroll taxes, and other taxes.
We encourage our partners to co-market, pursue joint sales initiatives, and drive broader adoption of our technology, helping us grow our business more efficiently and enabling us to focus our resources on continued innovation and further enhancement of our solutions. We work closely with our network of third-party SI partners to facilitate new sales and implementations of our products.
We encourage our partners to co-market, pursue joint sales initiatives, and drive broader adoption of our technology, helping us grow our business more efficiently and enabling us to focus our resources on continued innovation and further enhancement of our solutions. We work closely with our network of SI partners to facilitate new sales and implementations of our products.
Additionally, inflation levels are impacting the global economy and have magnified the impact of these disruptions. Our customers may be unable to pay or may request amended payment terms for their outstanding invoices due to the economic impacts from these disruptions, and we may need to increase our accounts receivable allowances.
Additionally, inflation levels and political uncertainty are impacting the global economy and have magnified the impact of these disruptions. Our customers may be unable to pay or may request amended payment terms for their outstanding invoices due to the economic impacts from these disruptions, and we may need to increase our accounts receivable allowances.
Additionally, free cash flow takes into account the impact of changes in deferred revenue, which reflects the receipt of cash payment for products before they are recognized as revenue, and unbilled accounts receivable, which reflects revenue that has been recognized that has yet to be invoiced to our customers.
Additionally, free cash flow takes into account the impact of changes in deferred revenue, which reflects the receipt of cash payments for products before they are recognized as revenue, and unbilled accounts receivable, which reflects revenue that has been recognized that has yet to be invoiced to our customers.
We urge investors to review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included herein and not to rely on any single financial measure to evaluate the Company’s business.
We urge investors to review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included herein and not to rely on any single financial measure to evaluate our business.
Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on its standalone selling price (“SSP”) in relation to the total fair value of all performance obligations in the arrangement.
Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance 50 Table of Contents obligation based on its standalone selling price (“SSP”) in relation to the total fair value of all performance obligations in the arrangement.
As a result of efficiencies that we are seeing from our previous investments in cloud operations and development efforts, we are critically evaluating headcount additions, professional services contracts, and third-party software costs, along with other investment opportunities.
As a result of efficiencies that we are seeing from our previous investments in cloud operations and development efforts, we continue to critically evaluate headcount additions, professional services contracts and third-party software costs, along with other investment opportunities.
We continue to dedicate internal resources to develop, improve, and expand the functionality of our solutions and migrate our solutions to the cloud. Research and development expenses may also increase if we pursue additional acquisitions. Sales and Marketing Our sales and marketing expenses primarily consist of personnel costs for our sales and marketing employees.
We continue to dedicate internal resources to develop, improve, and expand the functionality, efficiency, and security of our solutions in the cloud. Research and development expenses may also increase if we pursue additional acquisitions. Sales and Marketing Our sales and marketing expenses primarily consist of personnel costs for our sales and marketing employees.
As a result, we received $12.1 million in consideration for our equity interest in the investee, composed of $6.5 million in cash and $5.6 million of an ownership interest in the privately held limited partnership, and recognized a $1.8 million gain in excess of cost in other income (expense), net.
As a result, we received $12.1 million in consideration for our equity interest in the investee, composed of $6.5 million cash and $5.6 million of an ownership interest in the privately held limited partnership, and recognized a $1.8 million gain in excess of cost.
Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our Form 10-K for the fiscal year ended July 31, 2023, filed on September 18, 2023, for reference to discussion of the fiscal year ended July 31, 2022, the earliest of the three fiscal years presented.
Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our Form 10-K for the fiscal year ended July 31, 2024, filed on September 16, 2024, for reference to discussion of the fiscal year ended July 31, 2023, the earliest of the three fiscal years presented.
This means that if we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value would be recognized as services revenue, but our reported ARR amount would not be impacted. In fiscal year 2024, the recurring license and support or subscription contract value recognized as services revenue was $10.7 million.
This means that if we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value would be recognized as services revenue, but our reported ARR amount would not be impacted. In fiscal year 2025, the recurring license and support or subscription contract value recognized as services revenue was $9.5 million.
Because we recognize revenue upfront for term licenses compared to over time for subscription services, changes in the mix between term license and subscription services may impact our quarterly results. Additionally, any significant multi-year term license or Table of Conten t s term license non-renewal could impact quarterly results.
Because we recognize revenue upfront for term licenses compared to over time for subscription services, changes in the mix between term license and subscription services may impact our quarterly results. Additionally, any significant multi-year term license or term license non-renewal could impact quarterly results.
Comparison of the Fiscal Years Ended July 31, 2023 and 2022 Refer to Item 7.
Comparison of the Fiscal Years Ended July 31, 2024 and 2023 Refer to Item 7.
Table of Conten t s Key Business Metrics We use certain key metrics and financial measures not prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) to evaluate and manage our business, including ARR and free cash flow.
Key Business Metrics We use certain key metrics and financial measures not prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) to evaluate and manage our business, including ARR and free cash flow.
Off-Balance Sheet Arrangements Through July 31, 2024, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
See Note 7 “Debt.” Off-Balance Sheet Arrangements Through July 31, 2025, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
As we continue to expand into new markets and develop new products, we have, and may continue to, enter into contracts with lower average billing rates, make investments in customer implementation and migration engagements, and enter into fixed price contracts, which may impact services revenue and services margin.
As we continue to expand into new markets and develop new products, we have, and may continue to, enter into contracts with lower average billing rates, make investments in customer implementation and migration engagements, and enter into fixed price contracts.
Subscription and Support A growing portion of our revenue consists of fees for our subscription services, which are generally priced based on the amount of DWP that is managed by our subscription services.
Subscription and Support The majority of our revenue consists of fees for our subscription services, which are generally priced based on the amount of DWP that is managed by our subscription services.
The $2.0 million decrease in our cost of license revenue was primarily due to a decrease in personnel costs associated with the development of online training curriculum included with the latest releases of InsuranceSuite of $1.6 million and royalties of $0.4 million.
The $0.9 million decrease in our cost of license revenue was primarily due to a $0.6 million decrease in personnel costs associated with the development of online training curriculum included with the latest releases of InsuranceSuite and lower royalties of $0.3 million.
We expect our research and development expenses to increase in absolute dollars due to inflation and investments to support our growing customer base, but decrease as a percentage of revenue after our recent period of significant investment in cloud platform capabilities as overall hiring slows, and we focus on hiring in lower cost regions.
We expect our research and development expenses to increase in absolute dollars due to inflation and investments to enhance and develop our products and services, but decrease as a percentage of revenue after our recent period of significant investment in cloud platform capabilities as overall hiring slows, and we focus on hiring in lower cost regions.
Table of Conten t s Commitments and Contractual Obligations Our estimated future obligations consist of leases, royalties, purchase obligations, debt, and taxes as of July 31, 2024. Refer to Note 7 ‘’Leases,’’ Note 8 “Commitments and Contingencies” and Note 10 “Income Taxes” to our consolidated financial statements included in this Annual Report on Form 10-K for more information.
Commitments and Contractual Obligations Our estimated future obligations consist of leases, royalties, purchase obligations, debt, and taxes as of July 31, 2025. Refer to Note 8 ‘’Leases,’’ Note 9 “Commitments and Contingencies” and Note 11 “Income Taxes” to our consolidated financial statements included in this Annual Report on Form 10-K for more information.
Liquidity and Capital Resources Our principal sources of liquidity are as follows (in thousands): July 31, 2024 July 31, 2023 Cash, cash equivalents, and investments $ 1,129,453 $ 927,467 Working capital $ 457,899 $ 726,342 Cash, Cash Equivalents, and Investments Our cash and cash equivalents are comprised of cash and liquid investments with remaining maturities of 90 days or less from the date of purchase, primarily commercial paper and money market funds.
Liquidity and Capital Resources Our principal sources of liquidity are as follows (in thousands): July 31, 2025 July 31, 2024 Cash, cash equivalents, and investments $ 1,483,197 $ 1,129,453 Working capital $ 962,613 $ 457,899 Cash, Cash Equivalents, and Investments Our cash and cash equivalents are comprised of cash and liquid investments with remaining maturities of 90 days or less from the date of purchase, primarily commercial paper and money market funds.
Recent Accounting Pronouncements See Note 1 “The Company and Summary of Significant Accounting Policies and Estimates” to our consolidated financial statements included in this Annual Report on Form 10-K for a full description of recent accounting pronouncements adopted, including the dates of adoption, and recent accounting pronouncements not yet adopted.
Recent Accounting Pronouncements See Note 1 “The Company and Summary of Significant Accounting Policies and Estimates” to our consolidated financial statements included in this Annual Report on Form 10-K for a full description of recent accounting pronouncements adopted, including the dates of adoption, and recent accounting pronouncements not yet adopted. 51 Table of Contents Results of Operations The following table sets forth our results of operations for the years presented.
Our investments primarily consist of corporate debt securities, U.S. government and agency debt securities, commercial paper, asset-backed securities, and non-U.S. government securities, which include state, municipal and foreign government securities. Table of Conten t s As of July 31, 2024, approximately $75.1 million of our cash and cash equivalents were domiciled in foreign jurisdictions.
Our investments primarily consist of corporate debt securities, U.S. government and agency debt securities, commercial paper, asset-backed securities, and non-U.S. government securities, which include state, municipal, and foreign government securities. As of July 31, 2025, approximately $90.3 million of our cash and cash equivalents were domiciled in foreign jurisdictions.
Our research and development headcount was 1,169 as of July 31, 2024, as compared to 1,069 as of July 31, 2023.
Our research and development headcount was 1,273 as of July 31, 2025, as compared to 1,169 as of July 31, 2024.
Term license revenue decreased by $16.5 million compared to the prior year primarily due to agreements that migrated from a term license to a subscription service in the prior year, partially offset by higher renewals and expansion orders within our existing customer base. Ongoing revenue related to migration agreements is recorded as subscription revenue.
Term license revenue increased by $3.0 million compared to the prior year primarily due to higher renewals and expansion orders within our existing customer base, partially offset by the impact of customers that migrated from a term license to a subscription service. Ongoing revenue related to migration agreements is recorded as subscription revenue.
Our monetary assets and liabilities denominated in currencies other than the functional currency of the entity in which they are recorded consist primarily of trade accounts receivable, unbilled accounts receivable, trade accounts payable, and intercompany receivables and payables. Other income (expense) also includes changes in the fair value of our strategic investments.
Our monetary assets and liabilities denominated in currencies other than the functional currency of the entity in which they are recorded consist primarily of trade accounts receivable, unbilled accounts receivable, trade accounts payable, and intercompany receivables and payables.
The impact on term license revenue from contracts with an initial term of greater than two years or a renewal term of greater than one year was $2.7 million during fiscal year 2024, as compared to $7.6 million in the prior year. Services Services revenue decreased by $28.8 million compared to the prior year.
The impact on term license revenue from contracts with an initial term of greater than two years or a renewal term of greater than one year was $0.5 million during fiscal year 2025, as compared to $2.7 million in the prior year.
The following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included elsewhere in this Annual Report on Form 10-K (in thousands): Fiscal years ended July 31, 2024 2023 Net cash provided by (used in) operating activities $ 195,748 $ 38,395 Net cash provided by (used in) investing activities $ (52,359) $ 12,712 Net cash provided by (used in) financing activities $ 1,055 $ (261,579) Cash Flows from Operating Activities Net cash provided by operating activities increased by $157.4 million in fiscal year 2024 as compared to fiscal year 2023.
The following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included elsewhere in this Annual Report on Form 10-K (in thousands): Fiscal years ended July 31, 2025 2024 Net cash provided by (used in) operating activities $ 300,867 $ 195,748 Net cash provided by (used in) investing activities $ (236,965) $ (52,359) Net cash provided by (used in) financing activities $ 82,293 $ 1,055 Cash Flows from Operating Activities Net cash provided by operating activities increased by $105.1 million in fiscal year 2025 as compared to fiscal year 2024.
Fiscal years ended July 31, 2024 2023 Change Amount Amount ($) (%) (In thousands, except percentages) Provision for (benefit from) income taxes $ (20,735) $ (22,239) $ 1,504 (7) % Effective tax rate 77 % 17 % We recognized an income tax benefit of $20.7 million for fiscal year 2024 compared to $22.2 million for fiscal year 2023.
Fiscal years ended July 31, 2025 2024 Change Amount Amount ($) (%) (In thousands, except percentages) Provision for (benefit from) income taxes $ (20,409) $ (20,735) $ 326 (2) % Effective tax rate (41) % 77 % We recognized an income tax benefit of $20.4 million for fiscal year 2025 compared to $20.7 million for fiscal year 2024.
The increase in cash used in investing activities was primarily due to higher net purchases of available-for-sale securities transactions of $80.1 million, higher capital expenditures and capitalized software development costs of $1.1 million, offset by an increase of $6.6 million in proceeds from the sale of strategic investments and $9.5 million due to a decrease in the acquisition of new strategic investments.
The increase in cash used in investing activities was primarily due to higher net purchases of available-for-sale securities transactions of $154.5 million, $26.9 million cash paid as purchase consideration for the acquisition of Quantee, higher capital expenditures and capitalized software development costs of $1.9 million, a decrease of $0.9 million in proceeds from the sale of strategic investments, and an increase of $0.4 million of acquisition of new strategic investments.
Table of Conten t s Results of Operations The following table sets forth our results of operations for the years presented. The data has been derived from the consolidated financial statements contained in this Annual Report on Form 10-K. The results of operations for any period should not be considered indicative of results for any future period.
The data has been derived from the consolidated financial statements contained in this Annual Report on Form 10-K. The results of operations for any period should not be considered indicative of results for any future period.
The $19.6 million increase in research and development expenses was primarily due to increases in personnel costs of $20.1 million due to higher headcount, software subscription costs of $1.8 million, travel costs of $1.2 million, and professional services of $0.6 million.
The $26.8 million increase in research and development expenses was primarily due to increases in personnel costs of $23.3 million due to higher headcount, professional services of $1.0 million, web hosting costs of $1.0 million, software subscription costs of $0.9 million, and travel costs of $0.6 million.
Federal income tax rate of 21% primarily due to state taxes, permanent differences for stock-based compensation including excess tax benefits, research and development credits, foreign earnings taxed in the U.S., the foreign derived intangible income deduction, a change in valuation allowance and certain non-deductible expenses, including, but not limited to, executive compensation limitation.
Federal income tax rate of 21% primarily due to the debt retirement expense which is non-deductible for tax purposes and other permanent differences related to stock-based compensation including excess tax benefits, research and development credits, foreign earnings taxed in the U.S., the foreign derived intangible income deduction, and certain non-deductible expenses, including, but not limited to, executive compensation limitation.
For a further discussion of our operating cash flows, see “Liquidity and Capital Resources – Cash Flows.” Fiscal years ended July 31, 2024 2023 (in thousands) Net cash provided by (used in) operating activities $ 195,748 $ 38,395 Purchases of property and equipment (6,362) (5,821) Capitalized software development costs (12,165) (11,606) Free cash flow $ 177,221 $ 20,968 Table of Conten t s Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
For a further discussion of our operating cash flows, see “Liquidity and Capital Resources – Cash Flows.” Fiscal years ended July 31, 2025 2024 (in thousands) Net cash provided by (used in) operating activities $ 300,867 $ 195,748 Purchases of property and equipment (5,741) (6,362) Capitalized software development costs (14,714) (12,165) Free cash flow $ 280,412 $ 177,221 Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
We do enter into license arrangements that have an initial term of two or more years and renewal terms of more than one year which results in significantly higher revenue in the initial year of the committed term than arrangements for our subscription services Services Our services revenue is primarily derived from implementation and migration services performed for our customers, reimbursable travel expenses, and training fees.
We do enter into license arrangements that have an initial term of two or more years and renewal terms of more than one year which results in significantly higher revenue in the initial year of the committed term than arrangements for our subscription services.
As of July 31, 2024, ARR was $864 million, or $872 million based on currency exchange rates as of July 31, 2023. We measure ARR results on a constant currency basis during the fiscal year and revalue ARR at year end to current currency rates. ARR grew in fiscal year 2024 by 13%, or 14% on a constant currency basis.
As of July 31, 2025, ARR was $1,041 million, or $1,032 million based on currency exchange rates as of July 31, 2024. We measure ARR results on a constant currency basis during the fiscal year and revalue ARR at year end to current currency rates.
Overall, we expect gross margins to continue to improve over time as improvements in subscription and support gross margin and services gross margin will more than offset the negative impact of revenue shifts away from high margin license revenue.
Overall, we expect gross margins to continue to improve over time as improvements in subscription and support gross margin and services gross margin will more than offset the negative impact of revenue shifts away from high margin license revenue. 56 Table of Contents Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses.
However, our management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP measures used by other companies.
During fiscal year 2024, we did not repurchase any shares of our common stock due to the market price of our shares. As of July 31, 2024, $138.2 million remained available for future share repurchases under the authorized and approved share repurchase program.
During fiscal years 2024 and 2025, we did not repurchase any shares of our common stock due to the market price of our shares. As of July 31, 2025, $138.2 million remained available for future share repurchases subject to our compliance with the terms of the Credit Agreement.
Because we pay our services professionals the same amount throughout the year, our gross margins on our services revenue are usually lower in these quarters. This seasonal pattern, however, may be absent in any given year.
Because we pay our services professionals the same amount throughout the year, our gross margins on our services revenue are usually lower in these quarters.
A majority of our services revenue is billed monthly on a time and materials basis. Over the past few years, we have primarily been entering into cloud-based subscription arrangements with our new and existing customers, and we anticipate that subscription arrangements will be a significant majority of annual new sales going forward.
Support is typically priced as a percentage of license fees and recognized ratably, while most professional services are billed monthly on a time-and-materials basis. 47 Table of Contents Over the past few years, we have primarily been entering into cloud-based subscription arrangements with our new and existing customers, and we anticipate that subscription arrangements will continue to be a significant majority of annual new sales going forward.
In these arrangements when a project extends longer than originally anticipated, the average billing rate we recognize may decrease, which can result in revenue adjustments and lower gross profit. Additionally, our SI partners are leading more new subscription implementation and migration projects than in the past.
In these arrangements when a project extends longer than originally anticipated, the average billing rate we recognize may decrease, which can result in revenue adjustments and lower gross profit.
A majority of our subscription customers are billed annually in advance. In some arrangements with multiple performance obligations, a portion of recurring subscription contract value may be allocated to Table of Conten t s license revenue or services revenue for revenue recognition purposes.
Subscription agreements contain optional annual renewals commencing upon the expiration of the initial contract term. A majority of our subscription customers are billed annually in advance. In some arrangements with multiple 52 Table of Contents performance obligations, a portion of recurring subscription contract value may be allocated to license revenue or services revenue for revenue recognition purposes.
Free Cash Flow We monitor our free cash flow as a key measure of our overall business performance, which enables us to analyze our financial performance without the effects of certain non-cash items such as depreciation, amortization, and stock-based compensation expenses.
ARR grew in fiscal year 2025 by 20%, or 19% on a constant currency basis. 49 Table of Contents Free Cash Flow We monitor our free cash flow as a key measure of our overall business performance, which enables us to analyze our financial performance without the effects of certain non-cash items such as depreciation, amortization, and stock-based compensation expenses.
Subscription revenue increased by $125.3 million compared to the prior year primarily due to the impact of new subscription agreements and cloud transition agreements entered into and provisioned since July 31, 2023 of $101.0 million, and the renewal or extension of subscription services at the fully ramped annual fees after the initial committed term of $24.9 million.
Subscription revenue increased by $190.0 million compared to the prior year primarily due to the impact of new subscription agreements and cloud transition agreements entered into and provisioned since July 31, 2024 of $154.0 million, and the renewal or extension of subscription services at the fully ramped annual fees after the initial committed term of $28.2 million. 53 Table of Contents Support revenue decreased by $7.8 million compared to the prior year, primarily due to customers migrating from on-premise term licenses to subscription services.
Our net cash provided by (used in) operating activities is significantly impacted by the timing of invoicing and collections of accounts receivable, the timing and amount of annual bonus payments, as well as payroll and tax payments. Our capital expenditures consist of purchases of property and equipment, primarily computer hardware, software, and leasehold improvements, and capitalized software development costs.
Our net cash provided by (used in) operating activities is significantly impacted by the timing of invoicing and collections of accounts receivable, the timing and amount of annual bonus payments, as well as payroll, commissions, payroll taxes, and other tax payments.
Table of Conten t s Cash Flows from Financing Activities Net cash provided by financing activities increased by $262.6 million in fiscal year 2024 as compared to fiscal year 2023.
Cash Flows from Financing Activities Net cash provided by financing activities increased by $81.2 million in fiscal year 2025 as compared to fiscal year 2024.
The increase in cash provided by operating activities was primarily attributable to an $90.6 million decrease in net loss after excluding the impact of non-cash charges such as deferred taxes, stock-based compensation expense, depreciation and amortization expense, and other non-cash items and a decrease of $66.8 million in cash used by working capital activities.
The increase in cash provided by operating activities was primarily attributable to a $146.5 million increase in net income after excluding the impact of non-cash charges such as deferred taxes, stock-based compensation expense, depreciation and amortization expense, loss on retirement of debt, and other non-cash items, offset by an increase of $41.4 million of cash used in working capital activities. 63 Table of Contents Cash Flows from Investing Activities Net cash used in investing activities increased by $184.6 million in fiscal year 2025 as compared to fiscal year 2024.
Additionally, our capital expenditures may fluctuate depending on future office build outs and development activities subject to capitalization. We believe that our existing cash and cash equivalents and sources of liquidity will be sufficient to fund our operations for at least the next 12 months.
We believe that our existing cash and cash equivalents and other sources of liquidity will be sufficient to fund our operations for at least the next 12 months.
Fiscal years ended July 31, 2024 As a % of total revenue 2023 As a % of total revenue (in thousands except percentages) Revenue: Subscription and support $ 549,087 56 % $ 429,667 48 % License 250,176 26 265,593 29 Services 181,234 18 210,081 23 Total revenue 980,497 100 905,341 100 Cost of revenue: Subscription and support 204,794 21 210,507 23 License 4,536 — 6,488 1 Services 187,806 19 230,135 25 Total cost of revenue 397,136 40 447,130 49 Gross profit: Subscription and support 344,293 35 219,160 25 License 245,640 26 259,105 28 Services (6,572) (1) (20,054) (2) Total gross profit 583,361 60 458,211 51 Operating expenses: Research and development 269,381 27 249,746 27 Sales and marketing 199,033 20 188,224 21 General and administrative 167,520 17 169,731 19 Total operating expenses 635,934 64 607,701 67 Income (loss) from operations (52,573) (4) (149,490) (16) Interest income 43,478 4 24,389 3 Interest expense (6,738) (1) (6,716) (1) Other income (expense), net (11,005) (1) (2,277) — Income (loss) before provision for (benefit from) income taxes (26,838) (2) (134,094) (14) Provision for (benefit from) income taxes (20,735) (3) (22,239) (3) Net income (loss) $ (6,103) (1) % $ (111,855) (11) % Comparison of the Fiscal Years Ended July 31, 2024 and 2023 Revenue We derive our revenue primarily from delivering cloud-based services, licensing our software applications, providing support, and delivering professional services.
Fiscal years ended July 31, 2025 As a % of total revenue 2024 As a % of total revenue (in thousands except percentages) Revenue: Subscription and support $ 731,296 61 % $ 549,087 56 % License 251,935 21 250,176 26 Services 219,228 18 181,234 18 Total revenue 1,202,459 100 980,497 100 Cost of revenue: Subscription and support 235,106 20 204,794 21 License 3,624 — 4,536 — Services 211,676 18 187,806 19 Total cost of revenue 450,406 38 397,136 40 Gross profit: Subscription and support 496,190 41 344,293 35 License 248,311 21 245,640 26 Services 7,552 — (6,572) (1) Total gross profit 752,053 62 583,361 60 Operating expenses: Research and development 296,160 24 269,381 27 Sales and marketing 230,346 19 199,033 20 General and administrative 184,479 15 167,520 17 Total operating expenses 710,985 58 635,934 64 Income (loss) from operations 41,068 4 (52,573) (4) Interest income 56,625 4 43,478 4 Interest expense (13,211) (1) (6,738) (1) Other income (expense), net (35,087) (3) (11,005) (1) Income (loss) before provision for (benefit from) income taxes 49,395 4 (26,838) (2) Provision for (benefit from) income taxes (20,409) (2) (20,735) (2) Net income (loss) $ 69,804 6 % $ (6,103) — % Comparison of the Fiscal Years Ended July 31, 2025 and 2024 Revenue We derive our revenue primarily from delivering cloud-based services, licensing our software applications, providing support, and delivering professional services.
Our digital engagement products enable digital sales, omnichannel service, and enhanced claims experiences for policyholders, agents, vendor partners, and field personnel. Our analytics offerings enable insurers to manage data more effectively, gain insights into their business, drive operational efficiencies, and underwrite new and evolving risks.
In addition, we provide digital engagement products that enable seamless sales, omnichannel service, and enhanced claims experiences for policyholders, agents, vendors, and field personnel. Our analytics products allow insurers to manage and use data more effectively, gain business insights, improve operational efficiency, and underwrite emerging risks.
For instance, ongoing conflicts such as the wars between Israel and Hamas and between Russia and Ukraine, escalating tensions in the South China Sea, inflation, previous bank failures in the United States and Switzerland, and supply chain issues have contributed to global economic and market volatility in recent years.
For instance, ongoing conflicts such as the war between Russia and Ukraine, continued geopolitical instability in the Middle East, escalating tensions in the South China Sea, inflationary pressures, currency exchange fluctuations, changes in interest rates, changes in trade policies and practices (including the imposition of tariffs), previous bank failures in the United States and Switzerland, and supply chain issues have contributed to global economic and market volatility in recent years.
We expect subscription and support gross margin to continue to improve, though at a slower rate than in fiscal year 2024, over the next several years as we gain additional efficiencies and increase the number of cloud customers. We expect services gross margin will improve as we lower our reliance on subcontractors and enter into fewer fixed fee arrangements.
We expect subscription and support gross margin to continue to improve, though at a slower rate than in recent years, as we gain additional efficiencies and increase the number of cloud customers.
A majority of our services engagements are billed and revenue is recognized on a time and materials basis upon providing our services.
Services Our services revenue is primarily derived from implementation and migration services performed for our customers, reimbursable travel expenses, and training fees. A majority of our services engagements are billed and revenue is recognized on a time and materials basis upon providing our services.
Subscription revenue is recognized ratably over the term of the arrangement, beginning at the point in time our provisioning process has been completed and access has been made available to the customer. The initial term of such arrangements is generally from three to five years. Subscription agreements contain optional annual renewals commencing upon the expiration of the initial contract term.
Subscription revenue is recognized ratably over the term of the arrangement, beginning at the point in time our provisioning process has been completed and access has been made available to the customer. The initial term of such arrangements is generally five years, though in some instances customers have entered into contracts with an initial term of seven years or longer.
These increases were partially offset by decreases in marketing and advertising costs of $1.5 million and cloud hosting costs of $0.6 million. Our sales and marketing headcount was 477 as of July 31, 2024, as compared to 463 as of July 31, 2023.
These increases were partially offset by a decrease in amortization of intangibles of $0.3 million. Our sales and marketing headcount was 533 as of July 31, 2025, as compared to 477 as of July 31, 2024.
InsuranceNow is a complete, cloud-based application that offers policy, billing, and claims management functionality, plus pre-integrated document production, analytics, and other capabilities, that increases agility without adding complexity. InsuranceNow is hosted on AWS and managed by our internal cloud operations team.
Additionally, InsuranceSuite embeds digital and analytics capabilities natively into our platform. Most new sales and implementations are for InsuranceSuite. InsuranceNow is a complete, cloud-based application that offers policy administration, claims management, and billing functionality, plus pre-integrated document production, analytics, and other capabilities, that increases agility without adding complexity.
Global Events Global events have adversely affected and may continue to adversely affect workforces, organizations, economies, and financial markets globally, leading to economic downturns, inflation, and increased market volatility.
This seasonal pattern, however, may be absent in any given year. 48 Table of Contents Global Events Global events have adversely affected and may continue to adversely affect workforces, organizations, economies, and financial markets globally, leading to economic downturns, inflationary pressures, and increased market volatility.
Other Income (Expense) Fiscal years ended July 31, 2024 2023 Change Amount Amount ($) (%) (In thousands, except percentages) Interest income $ 43,478 $ 24,389 $ 19,089 78 % Interest expense $ (6,738) $ (6,716) $ (22) — % Other income (expense), net $ (11,005) $ (2,277) $ (8,728) 383 % Interest Income Interest income represents interest earned on our cash, cash equivalents, and investments.
Other Income (Expense) Fiscal years ended July 31, 2025 2024 Change Amount Amount ($) (%) (In thousands, except percentages) Interest income $ 56,625 $ 43,478 $ 13,147 30 % Interest expense $ (13,211) $ (6,738) $ (6,473) 96 % Other income (expense), net $ (35,087) $ (11,005) $ (24,082) 219 % Interest Income Interest income represents interest earned on our cash, cash equivalents, and investments.
InsuranceSuite Cloud is designed to support multiple releases each year to ensure that cloud customers remain on the latest version and gain fast access to our innovation efforts. Additionally, InsuranceSuite Cloud embeds digital and analytics capabilities natively into our platform. Most new sales and implementations are for InsuranceSuite Cloud.
These applications are built on and optimized for our Guidewire Cloud Platform (“GWCP”) architecture and leverage our in-house cloud operations team. InsuranceSuite is designed to support multiple releases each year to accelerate delivery of new capabilities and ensure that cloud customers remain on the latest version and gain fast access to our innovation efforts.
General and administrative headcount includes facilities personnel whose expenses are allocated across all functional departments.
Our general and administrative headcount was 487 as of July 31, 2025, as compared to 460 as of July 31, 2024. General and administrative headcount includes facilities personnel whose expenses are allocated across all functional departments.
Table of Conten t s The $10.8 million increase in sales and marketing expenses was primarily due to increases in personnel costs of $11.4 million due to higher headcount, including $2.1 million related to contract acquisition costs, travel costs of $1.1 million due to more in-person client interactions, software subscriptions of $0.3 million, and professional services costs of $0.1 million.
The $31.3 million increase in sales and marketing expenses was primarily due to increases in personnel costs, including higher contract acquisition costs and stock-based compensation, of $24.1 million, travel costs of $3.2 million, web hosting expenses of $2.6 57 Table of Contents million, marketing and advertising expenses of $0.6 million, software subscriptions of $0.6 million, and professional services costs of $0.5 million.
Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our 10-K for the fiscal year ended July 31, 2023, filed on September 18, 2023, for the discussion of the comparison of the fiscal year ended July 31, 2023 to the fiscal year ended July 31, 2022, the earliest of the three fiscal years presented in the consolidated financial statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our 10-K for the fiscal year ended July 31, 2024, filed on September 16, 2024, for the discussion of the comparison of the fiscal year ended July 31, 2024 to the fiscal year ended July 31, 2023, the earliest of the three fiscal years presented in the consolidated financial statements. 60 Table of Contents Non-GAAP Financial Measures In addition to the key business metrics presented above, we believe that the following non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations.
These increases were partially offset by decreases in acquisition holdback of $2.8 million and cloud hosting costs of $1.3 million. Cloud hosting costs are benefiting from the efficiencies that we are achieving with GWCP and the five-year agreement with a cloud infrastructure services provider that was entered into in the second quarter of fiscal year 2023.
These increases were partially offset by a decrease in professional services expense of $2.9 million. Cloud infrastructure expense continues to benefit from the efficiencies that we are achieving from our development efforts associated with our GWCP platform and the five-year agreement we entered into with a cloud infrastructure services provider.
We face a number of risks in the execution of our strategy, including, but not limited to, risks related to expanding to new markets, managing lengthy sales cycles, competing effectively in the global market, relying on sales to a relatively small number of large customers, developing new or acquiring existing products successfully, making long-term pricing commitments in our customer contracts based on available information and estimates about our future costs that may change, increasing the overall market acceptance of our cloud-based products, maintaining customer satisfaction and renewals of our products, and cost-effectively and securely managing the infrastructure of our cloud-based customers.
We face a number of risks in the execution of our strategy, including, but not limited to, risks related to fluctuations in our results due to factors largely outside of our control, reliance on sales to a relatively small number of large customers and the related substantial negotiating leverage of these customers, lengthy and variable sales and implementation cycles, competing effectively in the global market, growing our business and managing our expanding operations, development and use of AI in an evolving regulatory environment, making long-term pricing commitments based on cost estimates that may change, expanding market adoption of our cloud-based offerings, maintaining customer satisfaction and renewals, and cost-effectively and securely managing the infrastructure of our cloud-based customers.
Fiscal years ended July 31, 2024 2023 Change As a% of total As a % of total Amount revenue Amount revenue ($) (%) (In thousands, except percentages) Operating expenses: Research and development $ 269,381 27 % $ 249,746 28 % $ 19,635 8 % Sales and marketing 199,033 20 188,224 21 10,809 6 General and administrative 167,520 17 169,731 19 (2,211) (1) Total operating expenses $ 635,934 64 % $ 607,701 68 % $ 28,233 5 % Includes stock-based compensation of: Research and development $ 40,213 $ 39,865 $ 348 Sales and marketing 34,590 29,925 4,665 General and administrative 39,033 39,259 (226) Total $ 113,836 $ 109,049 $ 4,787 Research and Development Our research and development expenses primarily consist of personnel costs for our technical staff and consultants providing professional services.
Fiscal years ended July 31, 2025 2024 Change As a% of total As a % of total Amount revenue Amount revenue ($) (%) (In thousands, except percentages) Operating expenses: Research and development $ 296,160 25 % $ 269,381 27 % $ 26,779 10 % Sales and marketing 230,346 19 199,033 20 31,313 16 General and administrative 184,479 15 167,520 17 16,959 10 Total operating expenses $ 710,985 59 % $ 635,934 64 % $ 75,051 12 % Includes stock-based compensation of: Research and development $ 41,760 $ 40,213 $ 1,547 Sales and marketing 43,270 34,590 8,680 General and administrative 41,678 39,033 2,645 Total $ 126,708 $ 113,836 $ 12,872 Research and Development Our research and development expenses primarily consist of personnel costs for our technical staff and consultants providing professional services.
Table of Conten t s Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. The largest components of our operating expenses are personnel costs for our employees and, to a lesser extent, professional services. In each case, personnel costs include salaries, bonuses, commissions, benefits, and stock-based compensation.
The largest components of our operating expenses are personnel costs for our employees and, to a lesser extent, professional services. In each case, personnel costs include salaries, bonuses, commissions, benefits, and stock-based compensation. We allocate overhead such as information technology infrastructure and software expenses, information security infrastructure and software expenses, and facilities expenses to all functional departments based on headcount.
Gross profit was impacted by an increase in subscription and support gross profit due to the increase in subscription revenue and cloud operations efficiencies. License gross profit decreased as a result of lower revenue primarily from our customers migrating from licenses to cloud subscriptions. The decrease in license gross profit was offset by lower services negative margin.
Gross profit was impacted by an increase in subscription and support gross profit due to the increase in subscription revenue and cloud operations efficiencies. License gross profit slightly increased primarily as a result of customer renewals and lower costs associated with development of online training curriculum.
Fiscal years ended July 31, 2024 2023 Change As a % of total As a % of total Amount revenue Amount revenue ($) (%) (in thousands, except percentages) Revenue: Subscription and support: Subscription $ 477,460 49 % $ 352,145 39 % $ 125,315 36 % Support 71,627 7 77,522 9 (5,895) (8) License: Term license 248,849 26 265,389 29 (16,540) (6) Perpetual license 1,327 — 204 — 1,123 550 Services 181,234 18 210,081 23 (28,847) (14) Total revenue $ 980,497 100 % $ 905,341 100 % $ 75,156 8 % Subscription and Support We anticipate subscriptions will continue to represent a significant majority of new arrangements, including customers migrating from existing term license arrangements to subscription services, in future periods.
Fiscal years ended July 31, 2025 2024 Change As a % of total As a % of total Amount revenue Amount revenue ($) (%) (in thousands, except percentages) Revenue: Subscription and support: Subscription $ 667,436 56 % $ 477,460 49 % $ 189,976 40 % Support 63,860 5 71,627 7 (7,767) (11) License: Term license 251,817 21 248,849 26 2,968 1 Perpetual license 118 — 1,327 — (1,209) (91) Services 219,228 18 181,234 18 37,994 21 Total revenue $ 1,202,459 100 % $ 980,497 100 % $ 221,962 23 % Subscription and Support We anticipate subscriptions will continue to represent a significant majority of new arrangements, including customers migrating from existing term license arrangements to subscription services, in future periods.
InsuranceSuite Cloud is a highly configurable and scalable product, delivered as a service, and primarily comprised of three core applications (PolicyCenter Cloud, BillingCenter Cloud, and ClaimCenter Cloud) that can be subscribed to separately or together. These applications are built on and optimized for our Guidewire Cloud Platform (“GWCP”) architecture and leverage our in-house cloud operations team.
To support insurers worldwide, we localize our products to address diverse regulatory, language, and currency requirements. InsuranceSuite is a highly configurable and scalable product, delivered as a service, and primarily comprised of three core applications (PolicyCenter, ClaimCenter, and BillingCenter) that can be subscribed to separately or together.
Stated interest expense is consistent in the comparative periods as the outstanding principal and stated interest rate have not changed. Interest expense for the fiscal years ended July 31, 2024 and 2023 consists of stated interest of $5.0 million and non-cash interest expense of $1.7 million related to amortization of debt issuance costs.
Interest expense for the fiscal year ended July 31, 2024 consists of stated interest of $5.0 million and non-cash interest expense of $1.7 million.
Interest income increased by $19.1 million in fiscal year 2024, primarily due to higher interest rates on invested funds. Interest Expense Interest expense includes both stated interest and the amortization of debt issuance costs associated with our Convertible Senior Notes. The amortization of debt issuance costs are recognized on an effective interest basis.
Interest income increased by $13.1 million in fiscal year 2025, primarily due to increased funds available for investment due to our October 2024 debt offering and positive operating cash flow. 58 Table of Contents Interest Expense Interest expense includes both stated interest and the amortization of debt issuance costs associated with the outstanding amount due on the aggregate principal amount of our 1.25% Convertible Senior Notes due 2025 (“2025 Convertible Senior Notes”) and the aggregate principal amount of our 1.25% Convertible Senior Notes due 2029 (the “2029 Convertible Senior Notes,” together with the 2025 Convertible Senior Notes, the “Convertible Senior Notes”).
The decrease in our income tax benefit for fiscal year 2024 was primarily due to a decrease in pre-tax net loss, offset by an increase in deductions from stock-based compensation, the foreign derived intangible income deduction, and an increase in research and development tax credits.
Our fiscal year 2025 income tax benefit was similar to our fiscal year 2024 income tax benefit even though we generated more pre-tax income due to an increase in deductions from stock-based compensation, the foreign derived intangible income deduction, change in valuation allowance, and an increase in research and development tax credits, partially offset by non-deductible debt retirement expense and non-deductible executive compensation. 59 Table of Contents The effective tax rate differs from the statutory U.S.
We have the ability to settle the principal and any conversion premium in cash, equity, or a combination of both. Share Repurchase Program In September 2022, our board of directors authorized and approved a share repurchase program of up to $400.0 million of our outstanding common stock.
As of July 31, 2025, there were no outstanding borrowings under the 2025 Credit Facility and we were in compliance with related covenants. Share Repurchase Program In September 2022, our board of directors authorized and approved a share repurchase program of up to $400.0 million of our outstanding common stock.
Our gross margin increased to 59% in fiscal year 2024, as compared to 51% in fiscal year 2023. Gross margin was primarily impacted by the increase in subscription and support revenue at a higher margin due to cloud operations efficiencies and lower services negative margin.
Gross margin was primarily impacted by the increase in subscription and support revenue at a higher margin due to cloud operations efficiencies and higher services margin after the completion of certain implementation projects that required significant investment by us and higher utilization rates.
Table of Conten t s Support revenue decreased by $5.9 million compared to the prior year, primarily due to customers migrating from on-premise term licenses to subscription services. Support related to subscription arrangements is included in subscription revenue, as support is not quoted or priced separately from the subscription services.
Support related to subscription arrangements is included in subscription revenue, as support is not quoted or priced separately from the subscription services.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed10 unchanged
Biggest changeForeign Currency Exchange Risk Our results of operations, ARR, and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Australian Dollar, British Pound, Canadian Dollar, Euro, Indian Rupee, and Polish Zloty, the currency of the locations within which we have significant operations.
Biggest changeForeign Currency Exchange Risk Our results of operations, ARR, and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Australian Dollar, British Pound, Canadian Dollar, Euro, Indian Rupee, Japanese Yen, New Zealand Dollar, Polish Zloty, and Swiss Franc, the currency of the locations within which we have significant operations.
Fair Value of Financial Instrument s Table of Conten t s We do not have material exposure to market risk with respect to investments in financial instruments, as our investments primarily consist of high quality liquid investments purchased with a remaining maturity of three years or less. We do not use derivative financial instruments for speculative or trading purposes.
Fair Value of Financial Instrument s We do not have material exposure to market risk with respect to investments in financial instruments, as our investments primarily consist of high quality liquid investments purchased with a remaining maturity of three years or less. We do not use derivative financial instruments for speculative or trading purposes.
A hypothetical one percent increase in interest rates is estimated to result in a decrease of $3.3 million and $3.0 million in the market value of our available-for-sale securities as of July 31, 2024 and 2023, respectively. Any realized gains or losses resulting from such interest rate changes would only occur if we sold the investments prior to maturity.
A hypothetical one percent increase in interest rates is estimated to result in a decrease of $5.3 million and $3.3 million in the market value of our available-for-sale securities as of July 31, 2025 and 2024, respectively. Any realized gains or losses resulting from such interest rate changes would only occur if we sold the investments prior to maturity.
If a hypothetical ten percent change in foreign currency exchange rates were to occur in the future, the resulting transaction gain or loss is estimated to be approximately $39.1 million. As our international operations grow, we will continue to assess our approach to managing our risk relating to fluctuations in currency rates.
If a hypothetical ten percent change in foreign currency exchange rates were to occur in the future, the resulting transaction gain or loss is estimated to be approximately $60.7 million. As our international operations grow, we will continue to assess our approach to managing our risk relating to fluctuations in currency rates.
Our cash, cash equivalents, and investments as of July 31, 2024 and 2023 were $1,129.5 million and $927.5 million, respectively, primarily consisting of cash, money market funds, corporate debt securities, U.S. government and agency debt securities, commercial paper, asset-backed securities and non-U.S. government securities, which include state, municipal, and foreign government securities.
Our cash, cash equivalents, and investments as of July 31, 2025 and 2024 were $1,483.2 million and $1,129.5 million, respectively, primarily consisting of cash, money market funds, corporate debt securities, U.S. government and agency debt securities, commercial paper, asset-backed securities and non-U.S. government securities, which include state, municipal, and foreign government securities.
For the periods ended July 31, 2024 and 2023, we recorded a foreign currency loss of $10.8 million and $1.8 million, respectively, as a component of other income (expense) in our consolidated statements of operations primarily due to currency exchange rate fluctuations. We will continue to experience fluctuations in foreign currency exchange rates.
For the periods ended July 31, 2025 and 2024, we recorded a foreign currency gain of $16.7 million and loss of $10.8 million, respectively, as a component of other income (expense) in our consolidated statements of operations primarily due to currency exchange rate fluctuations. We will continue to experience fluctuations in foreign currency exchange rates.
All of our investments, particularly those in privately held companies, are therefore subject to a risk of partial or total loss of invested capital. Table of Conten t s
All of our investments, particularly those in privately held companies, are therefore subject to a risk of partial or total loss of invested capital. 65 Table of Contents
However, our relationships with our customers are long-term in nature so it is difficult to predict if our operating activities will provide a natural hedge in the future.
However, because our relationships with our customers are long-term in 64 Table of Contents nature, it is difficult to predict if our operating activities will provide a natural hedge in the future.

Other GWRE 10-K year-over-year comparisons