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Guidewire Software Announces First Quarter Fiscal 2013 Financial Results
“We are reporting revenue and profitability that exceeded our guidance for the first quarter of fiscal year 2013,” said
Ryu added, “We hosted our largest-ever user conference in the first quarter, during which we launched Guidewire Live, a network over which we are delivering hosted, data-driven apps that work in concert with our InsuranceSuite. We believe that Guidewire Live further expands our technology leadership position and contributes to our growth opportunity as we focus on serving the demand from P&C insurers seeking to replace their legacy core systems with flexible and upgradeable software products.”
First Quarter Fiscal 2013 Financial Highlights
Revenue
- Total revenue for the first quarter of fiscal 2013 was
$63.3 million , an increase of 21% from the comparable period in fiscal 2012. - License revenue for the first quarter of fiscal 2013 was
$20.8 million , consistent with the comparable period in fiscal 2012. Reflecting the company's focus on recurring revenue, term license revenue was$20.6 million , a 67% increase from a year ago and revenue from perpetual licenses was$0.2 million compared with$8.5 million a year ago. Maintenance revenue was$9.4 million , up 32% from the comparable period in fiscal 2012, and services revenue was$33.1 million , up 35% from the comparable period in fiscal 2012. - Rolling four-quarter recurring term license and maintenance revenue was
$114.9 million , an increase of 31% from the comparable period in fiscal 2012.
Profitability
- GAAP operating loss was
$0.1 million for the first quarter of fiscal 2013, compared to operating income of$8.1 million in the comparable period in fiscal 2012. - Non-GAAP operating income was
$9.7 million for the first quarter of fiscal 2013, compared to$11.4 million in the comparable period in fiscal 2012. - Adjusted EBITDA was
$10.8 million for the first quarter of fiscal 2013, compared to$12.1 million in the comparable period in fiscal 2012. - GAAP net income was
$0.4 million for the first quarter of fiscal 2013, compared to$4.8 million for the comparable period in fiscal 2012. GAAP net income per share was$0.01 , based on diluted weighted average shares outstanding of 61.2 million, compared to a GAAP net income per share of$0.09 for the comparable period in fiscal 2012, based on diluted weighted average shares outstanding of 21.2 million. - Non-GAAP net income was
$6.7 million for the first quarter of fiscal 2013, compared to$7.0 million in the comparable period in fiscal 2012. Non-GAAP net income per diluted share was$0.11 , based on diluted weighted average shares outstanding of 61.2 million, compared to$0.15 for the first quarter of fiscal 2012, based on pro forma diluted weighted average shares outstanding of 46.5 million. - The year-over-year decline in profitability metrics during the first quarter of 2012 was due primarily to greater investment across the business and increased stock-based compensation expense.
Balance Sheet
- The Company had
$185.5 million in cash and cash equivalents at October 31, 2012, a decrease from$205.7 million at July 31, 2012. The Company used$16.3 million in cash flow for operations in the first quarter, an improvement from$27.1 million used in cash flow for operations in the comparable period in fiscal 2012. The company used$10.0 million in cash during the first quarter of fiscal 2012 to pay for a litigation settlement.
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Conference Call Information |
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| What: | Guidewire Software first quarter fiscal 2013 financial results conference call | ||||
| When: | Tuesday, November 27, 2012 | ||||
| Time: | 2:00 p.m. PT (5:00 p.m. ET) | ||||
| Live Call: | (888) 329-8903, domestic | ||||
| (719) 457-2621, international | |||||
| Replay: | (877) 870-5176, passcode 7694345, domestic | ||||
| (858) 384-5517, passcode 7694345, international | |||||
| Webcast: |
http://ir.guidewire.com (live and replay) |
||||
The webcast will be archived on Guidewire's website for a period of three months.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: Non-GAAP operating income, Adjusted EBITDA, Non-GAAP net income and Non-GAAP net income per share.
Guidewire believes that these non-GAAP measures of financial results 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 analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in monthly financial reports prepared for management and in monthly and quarterly financial reports presented to the Company's board of directors. 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. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. 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 this press release, and not to rely on any single financial measure to evaluate the Company's business.
Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release.
About
NOTE: Guidewire,
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 market positioning, future adoption of our products and future investments. 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 Form 10-K filed with the
| GUIDEWIRE SOFTWARE, INC. | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (unaudited, in thousands) | ||||||
| October 31, | July 31, | |||||
| 2012 |
2012 |
|||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 185,472 | $ | 205,718 | ||
| Restricted cash, current portion | 2,121 | 3,726 | ||||
| Accounts receivable | 38,132 | 32,313 | ||||
| Deferred tax asset, current portion | 14,359 | 13,442 | ||||
| Prepaid expenses and other current assets | 6,275 | 7,266 | ||||
| Total current assets | 246,359 | 262,465 | ||||
| Property and equipment, net | 11,535 | 11,924 | ||||
| Deferred tax asset, net of current portion | 9,313 | 9,313 | ||||
| Other assets | 534 | 545 | ||||
| Total assets | $ | 267,741 | $ | 284,247 | ||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 6,517 | $ | 9,781 | ||
| Accrued employee compensation | 14,695 | 26,502 | ||||
| Deferred revenues, current portion | 41,549 | 52,947 | ||||
| Other current liabilities | 3,942 | 3,957 | ||||
| Total current liabilities | 66,703 | 93,187 | ||||
| Deferred revenues, net of current portion | 2,057 | 2,569 | ||||
| Other liabilities | 5,362 | 4,529 | ||||
| Total liabilities | 74,122 | 100,285 | ||||
| Stockholders’ Equity | ||||||
| Common stock | 5 | 5 | ||||
| Additional paid-in capital | 216,850 | 207,624 | ||||
| Accumulated other comprehensive loss | (512) | (496) | ||||
| Accumulated deficit | (22,724) | (23,171) | ||||
| Total stockholders’ equity | 193,619 | 183,962 | ||||
| Total liabilities and stockholders’ equity | $ | 267,741 | $ | 284,247 | ||
| GUIDEWIRE SOFTWARE, INC. | ||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||
| (unaudited, in thousands except share and per share amounts) | ||||||
| Three Months Ended October 31, | ||||||
| 2012 | 2011 | |||||
|
Revenues: |
||||||
| License | $ | 20,812 | $ | 20,815 | ||
| Maintenance | 9,370 | 7,106 | ||||
| Services | 33,119 | 24,459 | ||||
| Total revenues | 63,301 | 52,380 | ||||
| Cost of revenues: | ||||||
| License | 167 | 299 | ||||
| Maintenance | 1,564 | 1,266 | ||||
| Services | 25,826 | 17,925 | ||||
| Total cost of revenues (1) | 27,557 | 19,490 | ||||
|
Gross profit: |
||||||
| License | 20,645 | 20,516 | ||||
| Maintenance | 7,806 | 5,840 | ||||
| Services | 7,293 | 6,534 | ||||
| Total gross profit | 35,744 | 32,890 | ||||
| Operating expenses: (1) | ||||||
| Research and development | 14,764 | 10,959 | ||||
| Sales and marketing | 12,376 | 7,361 | ||||
| General and administrative | 8,666 | 6,438 | ||||
| Total operating expenses | 35,806 | 24,758 | ||||
| Income (loss) from operations | (62) | 8,132 | ||||
| Interest income, net | 90 | 40 | ||||
| Other income (expense), net | 141 | (316) | ||||
| Income before provision for (benefit from) income taxes | 169 | 7,856 | ||||
| Provision for (benefit from) Income taxes | (278) | 3,044 | ||||
| Net income | $ | 447 | $ | 4,812 | ||
| Net income per share: | ||||||
| Basic | $ | 0.01 | $ | 0.10 | ||
| Diluted | $ | 0.01 | $ | 0.09 | ||
| Shares used in computing net income per share: | ||||||
| Basic | 54,814,044 | 14,554,428 | ||||
| Diluted | 61,185,270 | 21,153,440 | ||||
| (1) Amounts include stock-based compensation expense, as follows: | ||||||
|
Three Months Ended October 31, |
||||||
| 2012 | 2011 | |||||
| Cost of maintenance revenues | $ | 261 | $ | 72 | ||
| Cost of services revenues | 2,616 | 686 | ||||
| Research and development | 2,042 | 845 | ||||
| Sales and marketing | 1,651 | 497 | ||||
| General and administrative | 3,214 | 1,212 | ||||
| $ | 9,784 | $ | 3,312 | |||
| GUIDEWIRE SOFTWARE, INC. | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (unaudited, in thousands) | ||||||
|
Three Months Ended October 31, |
||||||
| 2012 | 2011 | |||||
| Cash flows from operating activities: | ||||||
| Net income | $ | 447 | $ | 4,812 | ||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||
| Depreciation and amortization | 1,100 | 679 | ||||
| Stock-based compensation | 9,784 | 3,312 | ||||
| Excess tax benefit related to the exercise of stock options and vesting of restricted stock | (114) | - | ||||
| Deferred tax assets | (917) | 2,819 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (5,847) | (7,749) | ||||
| Prepaid expenses and other assets | 1,016 | 1,543 | ||||
| Accounts payable | 827 | 644 | ||||
| Accrued employee compensation | (11,604) | (9,000) | ||||
| Other liabilities | 929 | (10,366) | ||||
| Deferred revenues | (11,900) | (13,779) | ||||
| Net cash used in operating activities | (16,279) | (27,085) | ||||
| Cash flows from investing activities: | ||||||
| Purchase of property and equipment | (4,810) | (490) | ||||
| Increase in restricted cash | 1,605 | - | ||||
| Net cash used in investing activities | (3,205) | (490) | ||||
| Cash flows from financing activities: | ||||||
| Proceeds from issuance of common stock upon exercise of stock options | 3,163 | 402 | ||||
| Taxes remitted on RSU awards vested | (4,164) | - | ||||
| Costs paid in connection with initial public offering | - | (973) | ||||
| Excess tax benefit related to the exercise of stock options and vesting of restricted stock | 114 | - | ||||
| Net cash used in investing activities | (887) | (571) | ||||
| Effect of foreign exchange rate changes on cash and cash equivalents | 125 | (308) | ||||
| Net decrease in cash and cash equivalents | (20,246) | (28,454) | ||||
| Cash and cash equivalents at beginning of the period | 205,718 | 59,625 | ||||
| Cash and cash equivalents at end of the period | $ | 185,472 | $ | 31,171 | ||
| GUIDEWIRE SOFTWARE, INC. | ||||||||
| Reconciliation of GAAP to Non-GAAP Operating Results | ||||||||
| (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 operating results for the periods indicated below: | ||||||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Gross profit reconciliation: | ||||||||
| GAAP gross profit | $ | 35,744 | $ | 32,890 | ||||
| Stock-based compensation | 2,877 | 758 | ||||||
| Non-GAAP gross profit | $ | 38,621 | $ | 33,648 | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Gross margin reconciliation - maintenance: | ||||||||
| GAAP gross margin - maintenance | 83.3 | % | 82.2 | % | ||||
| Stock-based compensation - maintenance | 2.8 | % | 1.0 | % | ||||
| Non-GAAP gross margin - maintenance | 86.1 | % | 83.2 | % | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Gross margin reconciliation - services: | ||||||||
| GAAP gross margin - services | 22.0 | % | 26.7 | % | ||||
| Stock-based compensation - services | 7.9 | % | 2.8 | % | ||||
| Non-GAAP gross margin - services | 29.9 | % | 29.5 | % | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Gross margin reconciliation - total: | ||||||||
| GAAP gross margin | 56.5 | % | 62.8 | % | ||||
| Stock-based compensation | 4.5 | % | 1.4 | % | ||||
| Non-GAAP gross margin | 61.0 | % | 64.2 | % | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Operating expense reconciliation: | ||||||||
| Total GAAP operating expenses | $ | 35,806 | $ | 24,758 | ||||
| Less Stock-based compensation | 6,907 | 2,554 | ||||||
| Total non-GAAP operating expenses | $ | 28,899 | $ | 22,204 | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Operating income (loss) reconciliation: | ||||||||
| GAAP operating income (loss) | $ | (62 | ) | $ | 8,132 | |||
| Stock-based compensation | 9,784 | 3,312 | ||||||
| Non-GAAP operating income | $ | 9,722 | $ | 11,444 | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Pre-tax income reconciliation: | ||||||||
| GAAP pre-tax income | $ | 169 | $ | 7,856 | ||||
| Stock-based compensation | 9,784 | 3,312 | ||||||
| Non-GAAP pre-tax income | $ | 9,953 | $ | 11,168 | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Net income reconciliation: | ||||||||
| GAAP net income | $ | 447 | $ | 4,812 | ||||
| Stock-based compensation | 9,784 | 3,312 | ||||||
| Less tax benefit of non-GAAP items | (3,532 | ) | (1,159 | ) | ||||
| Non-GAAP net income | $ | 6,699 | $ | 6,965 | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Computation of net income per share: | ||||||||
| GAAP net income | $ | 447 | $ | 4,812 | ||||
|
Non-cumulative dividends to preferred stockholders |
- | (823 | ) | |||||
|
Undistributed earnings allocated to preferred stockholders |
- | (2,534 | ) | |||||
| Net income, Basic | 447 | 1,455 | ||||||
|
Adjustments to net income for dilutive options and restricted stock options |
- | 358 | ||||||
| Net income, Diluted | $ | 447 | $ | 1,813 | ||||
| GAAP net income per share - Basic | $ | 0.01 | $ | 0.10 | ||||
| GAAP net income per share - Diluted | $ | 0.01 | $ | 0.09 | ||||
| Weighted average shares - Basic | 54,814,044 | 14,554,428 | ||||||
| Weighted average shares - Diluted | 61,185,270 | 21,153,440 | ||||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Net income per share reconciliation: | ||||||||
| GAAP net income per share - Diluted | $ | 0.01 | $ | 0.09 | ||||
| Stock-based compensation | 0.16 | 0.16 | ||||||
| Less tax benefit of non GAAP items | (0.06 | ) | (0.05 | ) | ||||
| Pro forma conversion of preferred shares | - | (0.05 | ) | |||||
| Non-GAAP net income per share - Diluted | $ | 0.11 | $ | 0.15 | ||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Shares used in computing non-GAAP per share amounts: | ||||||||
| Weighted average shares - Diluted | 61,185,270 | 21,153,440 | ||||||
| Pro forma conversion of preferred shares | - | 25,357,721 | ||||||
| Pro forma weighted average shares - Diluted | 61,185,270 | 46,511,161 | ||||||
| Three Months Ended October 31, | ||||||||
| 2012 | 2011 | |||||||
| Adjusted EBITDA reconciliation: | ||||||||
| GAAP net income | $ | 447 | $ | 4,812 | ||||
| Non-GAAP adjustments: | ||||||||
| Provision for (benefit from) income taxes | (278 | ) | 3,044 | |||||
| Other (income) expense, net | (141 | ) | 316 | |||||
| Interest income, net | (90 | ) | (40 | ) | ||||
| Depreciation and amortization | 1,100 | 679 | ||||||
| Stock-based compensation | 9,784 | 3,312 | ||||||
|
Adjusted EBITDA |
$ | 10,822 | $ | 12,123 | ||||
Source:
Media Contact:
Guidewire Software, Inc.
Diana Stott, 650-356-4941
dstott@guidewire.com
or
Investor Contact:
ICR
Garo Toomajanian, 650-357-5282
ir@guidewire.com
