Guidewire (GWRE) Reports Earnings Tomorrow. What To Expect

Insurance industry-focused software maker Guidewire (NYSE:GWRE) will be reporting earnings tomorrow after the bell. Here's what to look for.

Last quarter Guidewire reported revenues of $207.4 million, up 6.2% year on year, beating analyst revenue expectations by 2.9%. It was a mixed quarter for the company, with revenue exceeding expectations. ARR was also ahead but by a much smaller magnitude. On the other hand, its revenue guidance for next quarter underwhelmed and its gross margin shrunk. Full year guidance was mixed. Revenue and ARR guidance was maintained but non-GAAP operating profit and cash from operations were raised.

Is Guidewire buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Guidewire's revenue to grow 4.1% year on year to $242.2 million, slowing down from the 13.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.23 per share.

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 3.1%.

Looking at Guidewire's peers in the vertical software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Manhattan Associates delivered top-line growth of 20.3% year on year, beating analyst estimates by 6.4% and Alarm.com reported revenues up 8.7% year on year, exceeding estimates by 0.6%. Manhattan Associates traded up 4.1% on the results, and Alarm.com was up 3.3%.

Read our full analysis of Manhattan Associates's results here and Alarm.com's results here.

Investors in the vertical software segment have had steady hands going into the earnings, with the stocks down on average 1.2% over the last month. Guidewire is up 0.3% during the same time, and is heading into the earnings with analyst price target of $115, compared to share price of $114.3.

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