Guidewire Software Announces Third Quarter Fiscal Year 2019 Financial Results
FOSTER CITY, Calif.–(BUSINESS WIRE)–Guidewire Software, Inc. (NYSE: GWRE), provider of the industry platform Property and Casualty (“P&C”) insurers rely upon, today announced its financial results for the fiscal quarter ended April 30, 2019.
“Total revenue and profitability were above our guidance ranges in the third quarter,” said Marcus Ryu, chief executive officer, Guidewire Software. “During the quarter we added two additional InsuranceSuite Cloud customers amidst robust demand for Guidewire Cloud overall, as new and existing customers increasingly seek Guidewire as a trusted partner to shoulder a broader role in their digital transformations. We also continue to ramp our product, operational, and delivery capacity to serve this wave of change for the $2 trillion global P&C industry.”
As of the first quarter of fiscal year 2019, Guidewire began reporting results under Accounting Standards Codification Topic 606, Revenue Recognition (“ASC 606”), using the modified retrospective method. Financial results for reporting periods prior to fiscal year 2019 are presented as previously disclosed in conformity with then existing guidance and as revised to reflect the restatement more fully described in Guidewire’s Form 10-K/A for the year ended July 31, 2018, filed on June 3, 2019.
Third Quarter Fiscal Year 2019 Financial Highlights
Revenue
- Total revenue for the third quarter of fiscal year 2019 was $162.9 million, an increase of 15% from the same quarter in fiscal year 2018. License and subscription revenue was $76.2 million, an increase of 45%; services revenue was $65.3 million, a decrease of 8%; and maintenance revenue was $21.3 million, an increase of 14%.
Profitability
- GAAP loss from operations was $15.8 million for the third quarter of fiscal year 2019, compared with a $28.9 million loss in the comparable period in fiscal year 2018.
- Non-GAAP income from operations was $12.6 million for the third quarter of fiscal year 2019, compared with $2.6 million of non-GAAP income in the comparable period in fiscal year 2018.
- GAAP net loss was $8.6 million for the third quarter of fiscal year 2019, compared with a $31.2 million loss for the comparable period in fiscal year 2018, which was adversely impacted by the effects of the provisions of the Tax and Jobs Act passed in December 2017. GAAP net loss per share was $0.11, based on diluted weighted average shares outstanding of 81.6 million, compared with a $0.40 net loss per share for the comparable period in fiscal year 2018, based on diluted weighted average shares outstanding of 78.8 million.
- Non-GAAP net income was $15.2 million for the third quarter of fiscal year 2019, compared with $4.2 million non-GAAP net income in the comparable period in fiscal year 2018. Non-GAAP net income per share was $0.18, based on diluted weighted average shares outstanding of 82.6 million, compared with $0.05 net income per share in the comparable period in fiscal year 2018, based on diluted weighted average shares outstanding of 80.4 million.
Liquidity
- The Company had $1.2 billion in cash, cash equivalents, and investments at April 30, 2019, compared with $1.3 billion at July 31, 2018. The Company generated $13.2 million in cash from operations during the nine months ended April 30, 2019.
Business Outlook
Guidewire is issuing the following outlook for the fourth fiscal quarter and fiscal year of 2019 based on current expectations:
| (in $ millions, except per share outlook) |
Fourth Quarter |
Fiscal Year 2019 | ||||||||||
| Revenue | 199.0 | – | 207.0 | 711.0 | – | 719.0 | ||||||
| License and subscription revenue | 121.4 | – | 129.4 | 379.0 | – | 387.0 | ||||||
| Maintenance revenue | 20.4 | – | 21.4 | 84.0 | – | 85.0 | ||||||
| Services revenue | 53.6 | – | 59.6 | 244.0 | – | 250.0 | ||||||
| GAAP operating income (loss) | 11.3 | – | 17.3 | (8.1) | – | (2.1) | ||||||
| Non-GAAP operating income | 41.0 | – | 47.0 | 112.0 | – | 118.0 | ||||||
| GAAP net income | 13.1 | – | 18.7 | 11.0 | – | 16.6 | ||||||
| GAAP net income per share | 0.16 | – | 0.23 | 0.13 | – | 0.20 | ||||||
| Non-GAAP net income | 38.8 | – | 43.8 | 112.2 | – | 117.2 | ||||||
| Non-GAAP net income per share | 0.47 | – | 0.53 | 1.36 | – | 1.42 | ||||||
Conference Call Information
| What: | Guidewire Software Third Quarter Fiscal Year 2019 Financial Results Conference Call | |
| When: | Tuesday, June 4, 2019 | |
| Time: | 2:00 p.m. PT (5:00 p.m. ET) | |
| Live Call: | (800) 239-9838, Domestic | |
| (323) 794-2551, International | ||
| Replay: | (844) 512-2921, Passcode 6008687, Domestic | |
| (412) 317-6671, Passcode 6008687, International | ||
| Webcast: |
http://ir.guidewire.com/ (live and replay) |
The webcast will be archived on Guidewire’s website (www.guidewire.com) for a period of three months.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: Non-GAAP operating income (loss), Non-GAAP net income (loss), Non-GAAP income tax provision (benefit), and Non-GAAP net income (loss) per share. Non-GAAP operating income (loss) excludes stock-based compensation and amortization of intangibles. Non-GAAP net income (loss), Non-GAAP income tax provision (benefit), and Non-GAAP net income (loss) per share also exclude the amortization of debt discount and issuance costs from our convertible notes and the related tax effects of the non-GAAP adjustments. The estimated annual tax rates used in the business outlook to compute GAAP and Non-GAAP net income exclude discrete items such as forecasted tax benefits related to stock-based compensation.
Guidewire believes that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Guidewire’s financial condition and results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.
Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Guidewire urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including the financial tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company’s business.
About Guidewire Software
Guidewire delivers the industry platform that P&C insurers rely upon to adapt and succeed in a time of accelerating change. We provide the software, services, and partner ecosystem to enable our customers to run, differentiate, and grow their business. We are privileged to serve more than 350 companies in 40 countries. For more information, please visit www.guidewire.com and follow us on twitter: @Guidewire_PandC.
NOTE: For information about Guidewire’s trademarks, visit https://www.guidewire.com/legal-notices.
Cautionary Language Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, market positioning, business momentum and demand for Guidewire Cloud. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Guidewire’s control. Guidewire’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Guidewire’s most recent Forms 10-K, 10-K/A and 10-Q filed with the Securities and Exchange Commission as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: quarterly and annual operating results may fluctuate more than expected; seasonal and other variations related to our revenue recognition may cause significant fluctuations in our results of operations and cash flows; our reliance on sales to and renewals from a relatively small number of large customers for a substantial portion of our revenue; our ability to successfully manage any changes to our business model, including the transition of our products to cloud offerings; our services revenue produces lower gross margins than our license and maintenance revenue; assertions by third parties that we violate their intellectual property rights could substantially harm our business; we face intense competition in our market; our products or cloud-based services may experience data security breaches; changes in accounting guidance on revenue recognition, such as contained in ASC 606, have and may cause us to experience greater volatility in our quarterly and annual results; our ability to remediate our material weakness that arose in connection with the restatement of our financial statements for the years ended July 31, 2018 and 2017; weakened global economic conditions may adversely affect the P&C insurance industry including the rate of information technology spending; our product development and sales cycles are lengthy; the risk of losing key employees; changes in foreign exchange rates; general political or destabilizing events, including war, conflict or acts of terrorism; and other risks and uncertainties. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Guidewire’s views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. Guidewire undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Guidewire’s views as of any date subsequent to the date of this press release.
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (unaudited, in thousands) | ||||||||
| April 30, 2019 |
July 31, 2018
As Restated |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 368,869 | $ | 437,140 | ||||
| Short-term investments | 636,333 | 630,008 | ||||||
| Accounts receivable, net | 108,844 | 124,849 | ||||||
| Unbilled accounts receivable, net | 59,710 | — | ||||||
| Prepaid expenses and other current assets | 35,479 | 30,464 | ||||||
| Total current assets | 1,209,235 | 1,222,461 | ||||||
| Long-term investments | 242,994 | 190,952 | ||||||
| Unbilled accounts receivable, net | 12,910 | — | ||||||
| Property and equipment, net | 55,375 | 18,595 | ||||||
| Intangible assets, net | 73,759 | 95,654 | ||||||
| Goodwill | 340,877 | 340,877 | ||||||
| Deferred tax assets, net | 88,345 | 90,369 | ||||||
| Other assets | 35,204 | 22,525 | ||||||
| TOTAL ASSETS | $ | 2,058,699 | $ | 1,981,433 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 33,058 | $ | 30,635 | ||||
| Accrued employee compensation | 54,459 | 60,135 | ||||||
| Deferred revenue, net | 90,651 | 127,107 | ||||||
| Other current liabilities | 11,236 | 20,280 | ||||||
| Total current liabilities | 189,404 | 238,157 | ||||||
| Convertible senior notes, net | 314,210 | 305,128 | ||||||
| Deferred revenue, net | 21,169 | 23,758 | ||||||
| Other liabilities | 7,915 | 774 | ||||||
| Total liabilities | 532,698 | 567,817 | ||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Common stock | 8 | 8 | ||||||
| Additional paid-in capital | 1,366,899 | 1,296,380 | ||||||
| Accumulated other comprehensive loss | (7,944 | ) | (7,748 | ) | ||||
| Retained earnings | 167,038 | 124,976 | ||||||
| Total stockholders’ equity | 1,526,001 | 1,413,616 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,058,699 | $ | 1,981,433 | ||||
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (unaudited, in thousands except share and per share data) | ||||||||||||||||
| Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
| 2019 | 2018
As Revised |
2019 | 2018
As Revised |
|||||||||||||
| Revenue: | ||||||||||||||||
| License and subscription | $ | 76,218 | $ | 52,392 | $ | 257,611 | $ | 165,310 | ||||||||
| Maintenance | 21,335 | 18,749 | 63,602 | 56,789 | ||||||||||||
| Services | 65,314 | 71,008 | 190,443 | 190,490 | ||||||||||||
| Total revenue | 162,867 | 142,149 | 511,656 | 412,589 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| License and subscription | 15,781 | 9,742 | 43,850 | 25,497 | ||||||||||||
| Maintenance | 3,924 | 3,828 | 11,746 | 10,888 | ||||||||||||
| Services | 60,573 | 62,111 | 185,970 | 169,918 | ||||||||||||
| Total cost of revenue | 80,278 | 75,681 | 241,566 | 206,303 | ||||||||||||
| Gross profit: | ||||||||||||||||
| License and subscription | 60,437 | 42,650 | 213,761 | 139,813 | ||||||||||||
| Maintenance | 17,411 | 14,921 | 51,856 | 45,901 | ||||||||||||
| Services | 4,741 | 8,897 | 4,473 | 20,572 | ||||||||||||
| Total gross profit | 82,589 | 66,468 | 270,090 | 206,286 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 47,102 | 46,787 | 139,069 | 126,155 | ||||||||||||
| Sales and marketing | 33,301 | 30,378 | 96,793 | 85,949 | ||||||||||||
| General and administrative | 17,953 | 18,170 | 53,839 | 57,907 | ||||||||||||
| Total operating expenses | 98,356 | 95,335 | 289,701 | 270,011 | ||||||||||||
| Loss from operations | (15,767 | ) | (28,867 | ) | (19,611 | ) | (63,725 | ) | ||||||||
| Interest income | 7,748 | 3,762 | 22,152 | 7,247 | ||||||||||||
| Interest expense | (4,327 | ) | (2,228 | ) | (12,858 | ) | (2,239 | ) | ||||||||
| Other income (expense), net | (617 | ) | (356 | ) | (958 | ) | 1,040 | |||||||||
| Loss before income taxes | (12,963 | ) | (27,689 | ) | (11,275 | ) | (57,677 | ) | ||||||||
| Provision for (benefit from) income taxes | (4,382 | ) | 3,461 | (9,002 | ) | 27,843 | ||||||||||
| Net loss | $ | (8,581 | ) | $ | (31,150 | ) | $ | (2,273 | ) | $ | (85,520 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (0.11 | ) | $ | (0.40 | ) | $ | (0.03 | ) | $ | (1.09 | ) | ||||
| Diluted | $ | (0.11 | ) | $ | (0.40 | ) | $ | (0.03 | ) | $ | (1.09 | ) | ||||
| Shares used in computing net loss per share: | ||||||||||||||||
| Basic | 81,606,088 | 78,777,484 | 81,252,993 | 78,246,146 | ||||||||||||
| Diluted | 81,606,088 | 78,777,484 | 81,252,993 | 78,246,146 | ||||||||||||
Amounts include stock-based compensation expense as follows:
| Three Months Ended April 30, | Nine Months Ended April 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| (unaudited, in thousands) | |||||||||||||||
| Stock-based compensation expense: | |||||||||||||||
| Cost of license and subscription revenue | $ | 589 | $ | 274 | $ | 1,458 | $ | 706 | |||||||
| Cost of maintenance revenue | 273 | 462 | 1,365 | 1,398 | |||||||||||
| Cost of services revenue | 5,720 | 5,310 | 17,879 | 15,982 | |||||||||||
| Research and development | 4,919 | 7,236 | 17,763 | 19,845 | |||||||||||
| Sales and marketing | 4,732 | 4,527 | 14,427 | 13,768 | |||||||||||
| General and administrative | 4,817 | 6,030 | 15,844 | 16,795 | |||||||||||
| Total stock-based compensation expense | $ | 21,050 | $ | 23,839 | $ | 68,736 | $ | 68,494 | |||||||
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||
| Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
| 2019 | 2018
As Revised |
2019 | 2018
As Revised |
|||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
| Net loss | $ | (8,581 | ) | $ | (31,150 | ) | $ | (2,273 | ) | $ | (85,520 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||
| Depreciation and amortization | 9,698 | 9,802 | 29,140 | 26,117 | ||||||||||||
| Amortization of debt discount and issuance costs | 3,069 | 1,568 | 9,082 | 1,568 | ||||||||||||
| Stock-based compensation | 21,050 | 23,839 | 68,736 | 68,494 | ||||||||||||
| Charges to bad debt and revenue reserves | 127 | — | 479 | — | ||||||||||||
| Deferred income tax | (5,074 | ) | 1,982 | (11,836 | ) | 24,692 | ||||||||||
| Amortization of premium (accretion of discount) on available-for-sale securities | (1,880 | ) | (395 | ) | (5,696 | ) | (34 | ) | ||||||||
| Other non-cash items affecting net income (loss) | — | — | 515 | — | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Accounts receivable | 10,355 | (464 | ) | 14,769 | (16,809 | ) | ||||||||||
| Unbilled accounts receivable | (13,668 | ) | — | (43,858 | ) | — | ||||||||||
| Prepaid expenses and other assets | (4,945 | ) | 1,027 | (5,812 | ) | (2,153 | ) | |||||||||
| Accounts payable | 3,339 | (265 | ) | (11,136 | ) | 4,569 | ||||||||||
| Accrued employee compensation | 10,197 | 10,310 | (5,065 | ) | (7,237 | ) | ||||||||||
| Other liabilities | 4,676 | 1,582 | 5,787 | 2,386 | ||||||||||||
| Deferred revenue | (2,149 | ) | 2,333 | (29,639 | ) | 20,542 | ||||||||||
| Net cash provided by operating activities | 26,214 | 20,169 | 13,193 | 36,615 | ||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
| Purchases of available-for-sale securities | (315,109 | ) | (424,490 | ) | (778,011 | ) | (535,310 | ) | ||||||||
| Sales and maturities of available-for-sale securities | 316,519 | 106,370 | 727,102 | 276,686 | ||||||||||||
| Purchases of property and equipment | (17,740 | ) | (90 | ) | (28,746 | ) | (4,710 | ) | ||||||||
| Capitalized software development costs | (1,140 | ) | (1,081 | ) | (2,243 | ) | (1,850 | ) | ||||||||
| Acquisitions of business, net of acquired cash | — | 318 | — | (130,058 | ) | |||||||||||
| Net cash used in investing activities | (17,470 | ) | (318,973 | ) | (81,898 | ) | (395,242 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
| Proceeds from issuance of convertible senior notes, net of issuance costs | — | 387,239 | — | 387,239 | ||||||||||||
| Proceeds from issuance of common stock, net of issuance costs | — | 220,948 | — | 220,948 | ||||||||||||
| Purchase of capped calls | — | (37,200 | ) | — | (37,200 | ) | ||||||||||
| Proceeds from issuance of common stock upon exercise of stock options | 748 | 328 | 1,851 | 1,055 | ||||||||||||
| Net cash provided by financing activities | 748 | 571,315 | 1,851 | 572,042 | ||||||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | (792 | ) | (1,697 | ) | (1,417 | ) | (490 | ) | ||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 8,700 | 270,814 | (68,271 | ) | 212,925 | |||||||||||
| CASH AND CASH EQUIVALENTS—Beginning of period | 360,169 | 205,287 | 437,140 | 263,176 | ||||||||||||
| CASH AND CASH EQUIVALENTS—End of period | $ | 368,869 | $ | 476,101 | $ | 368,869 | $ | 476,101 | ||||||||
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||
| (unaudited, in thousands except share and per share data) | ||||||||||||||||
| The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below: | ||||||||||||||||
| Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
| 2019 | 2018
As Revised |
2019 | 2018
As Revised |
|||||||||||||
| Income (loss) from operations reconciliation: | ||||||||||||||||
| GAAP income (loss) from operations | $ | (15,767 | ) | $ | (28,867 | ) | $ | (19,611 | ) | $ | (63,725 | ) | ||||
| Non-GAAP adjustments: | ||||||||||||||||
| Stock-based compensation (1) | 21,050 | 23,839 | 68,736 | 68,494 | ||||||||||||
| Amortization of intangibles (1) | 7,278 | 7,669 | 21,896 | 20,114 | ||||||||||||
| Non-GAAP income (loss) from operations | $ | 12,561 | $ | 2,641 | $ | 71,021 | $ | 24,883 | ||||||||
| Net income (loss) reconciliation: | ||||||||||||||||
| GAAP net income (loss) | $ | (8,581 | ) | $ | (31,150 | ) | $ | (2,273 | ) | $ | (85,520 | ) | ||||
| Non-GAAP adjustments: | ||||||||||||||||
| Stock-based compensation (1) | 21,050 | 23,839 | 68,736 | 68,494 | ||||||||||||
| Amortization of intangibles (1) | 7,278 | 7,669 | 21,896 | 20,114 | ||||||||||||
| Amortization of debt discount and issuance costs (2) | 3,070 | 1,568 | 9,126 | 1,568 | ||||||||||||
| Tax impact of non-GAAP adjustments (3) | (7,586 | ) | 2,228 | (23,860 | ) | 19,142 | ||||||||||
| Non-GAAP net income (loss) | $ | 15,231 | $ | 4,154 | $ | 73,625 | $ | 23,798 | ||||||||
| Tax provision (benefit) reconciliation: | ||||||||||||||||
| GAAP tax provision (benefit) | $ | (4,382 | ) | $ | 3,461 | $ | (9,002 | ) | $ | 27,843 | ||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Stock-based compensation (1) | 3,676 | 6,808 | 11,578 | 20,189 | ||||||||||||
| Amortization of intangibles (1) | 1,271 | 2,190 | 3,694 | 5,884 | ||||||||||||
| Amortization of debt discount and issuance costs (2) | 536 | 448 | 1,540 | 448 | ||||||||||||
| Other income tax effects and adjustments (3) | 2,103 | (11,674 | ) | 7,048 | (45,663 | ) | ||||||||||
| Non-GAAP tax provision (benefit) | $ | 3,204 | $ | 1,233 | $ | 14,858 | $ | 8,701 | ||||||||
| Net income (loss) per share reconciliation: | ||||||||||||||||
| GAAP net income (loss) per share – diluted | $ | (0.11 | ) | $ | (0.40 | ) | $ | (0.03 | ) | $ | (1.09 | ) | ||||
| Non-GAAP adjustments: | ||||||||||||||||
|
Amortization of intangibles (1) |
0.09 | 0.10 | 0.27 | 0.26 | ||||||||||||
| Stock-based compensation (1) | 0.26 | 0.30 | 0.84 | 0.89 | ||||||||||||
| Amortization of debt discount and issuance costs (2) | 0.04 | 0.02 | 0.12 | 0.02 | ||||||||||||
| Tax impact of non-GAAP adjustments (3) | (0.09 | ) | 0.02 | (0.30 | ) | 0.22 | ||||||||||
| Non-GAAP dilutive shares excluded from GAAP net loss per share calculation (4) | (0.01 | ) | 0.01 | (0.01 | ) | 0.02 | ||||||||||
| Non-GAAP net income (loss) per share – diluted | $ | 0.18 | $ | 0.05 | $ | 0.89 | $ | 0.32 | ||||||||
| Shares used in computing Non-GAAP income (loss) per share amounts: | ||||||||||||||||
| GAAP weighted average shares – diluted | 81,606,088 | 78,777,484 | 81,252,993 | 78,246,146 | ||||||||||||
| Non-GAAP dilutive shares excluded from GAAP loss per share calculation (4) | 1,031,086 | 1,581,552 | 1,245,769 | 1,561,424 | ||||||||||||
| Pro forma weighted average shares – diluted | 82,637,174 | 80,359,036 | 82,498,762 | 79,807,570 | ||||||||||||
(1) Adjustments relate to amortization of acquired intangibles and stock-based compensation recognized during the period for GAAP purposes.
(2) Adjustments reflect the amortization of debt discount and issuance costs related to the issuance of our Senior Convertible Notes recognized during the period for GAAP purposes.
(3) Adjustments reflect the tax benefit (provision) resulting from all non-GAAP adjustments.
(4) Due to the occurrence of a net loss on a GAAP basis, potentially dilutive securities were excluded from the calculation of GAAP earnings per share, as they would have an anti-dilutive effect. However, as net income was earned on a non-GAAP basis, these shares have a dilutive effect on a non-GAAP earnings per share and are included here.
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||
| Reconciliation of GAAP to Non-GAAP Outlook | ||||||||
| The following tables reconcile the specific items excluded from GAAP outlook in the calculation of non-GAAP outlook for the periods indicated below: | ||||||||
| (in $ millions) |
Fourth Quarter |
Fiscal Year 2019 | ||||||
| Operating income (loss) outlook reconciliation: | ||||||||
| GAAP operating income (loss) | 11.3 | – | 17.3 | (8.1) | – | (2.1) | ||
| Non-GAAP adjustments: | ||||||||
| Stock-based compensation | 22.0 | – | 23.0 | 89.5 | – | 92.5 | ||
| Amortization of intangibles | 7.0 | – | 7.5 | 28.6 | – | 29.6 | ||
| Non-GAAP operating income | 41.0 | – | 47.0 | 112.0 | – | 118.0 | ||
| Net income (loss) outlook reconciliation | ||||||||
| GAAP net income | 13.1 | – | 18.7 | 11.0 | – | 16.6 | ||
| Non-GAAP adjustments: | ||||||||
| Stock-based compensation | 22.0 | – | 23.0 | 89.5 | – | 92.5 | ||
| Amortization of intangibles | 7.0 | – | 7.5 | 28.6 | – | 29.6 | ||
| Amortization of debt discount and issuance costs | 3.1 | – | 3.1 | 12.2 | – | 12.2 | ||
| Tax impact of non-GAAP adjustments | (7.1) | – | (7.8) | (31.1) | – | (31.8) | ||
| Non-GAAP net income | 38.8 | – | 43.8 | 112.2 | – | 117.2 | ||
Contacts
Media Contact:
Diana Stott
Guidewire Software, Inc.
(650) 356-4941
[email protected]
Investor Contact:
Garo Toomajanian
ICR, LLC
(650) 357-5282
[email protected]
This article published with permission from Business Wire
