We have also posted this quarter's earnings deck on the IR section of the site. Statements today include forward-looking ones regarding our financial results, products, customer demand, operations, the impact of local, national, and geopolitical events on our business, and other matters. Reconciliations and additional data are also posted at the end of our quarterly earnings deck on our IR website. The quarter was highlighted by 11 cloud wins, strong progression in key pipeline deals, and growing customer interest in PricingCenter and our AI platform tooling and ProNavigator offerings.
From a financial perspective, revenue, profitability, and cash flow all finished ahead of expectations, continuing to demonstrate the strength and durability of our model. ARR in Q3 came in within our guidance range, growing 19% year-over-year, and fully ramped ARR continues to grow faster than ARR. The bookings results in the quarter were solid, 19% ARR growth is a great achievement. This carrier is investing in Guidewire to support long-term growth while incorporating greater AI-driven capabilities into its operations.
Our platform manages the core systems of record for policy, billing, and claims, and we continue to expand that foundation into critical business functions like pricing and underwriting through a continuously improving cloud platform. Fully ramped ARR growth rates continue to outpace ARR growth, which is a strong indication into the growth environment we are experiencing. Total revenue was $373 million, up 27% year-over-year, above the high end of our outlook. Subscription and support revenue finished Q3 at $245 million, reflecting 35% year-over-year growth.
| Metric | Period | Current guidance |
|---|---|---|
| ARR | FY2026 | $1.229B-$1.237B (18%-19% growth) (Maintained) |
| Total revenue | FY2026 | $1.46B-$1.47B (midpoint ~22% growth) (Raised) |
| Subscription and support revenue | FY2026 | $963M-$969M (Raised ~$20M) |
| Services revenue | FY2026 | Approximately $270 million (Raised) |
| Non-GAAP operating income | FY2026 | $314M-$324M (Raised) |
| GAAP operating income | FY2026 | $124M-$134M (Raised) |
| Cash flow from operations | FY2026 | $365M-$380M (Raised) |
| Overall gross margin | FY2026 | Approximately 67% (Maintained) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +27% (to $373 million) | Healthy cloud demand plus strong services demand and execution; above the high end of outlook |
| Subscription and support revenue | +35% (to $245 million) | Continued cloud platform scalability and adoption |
| Services revenue | +32% (to $72 million) | Strong demand for Guidewire-led services programs and field engineering activities |
| ARR | +19% (to $1.147 billion) | Solid bookings despite a few deals slipping on timing; fully ramped ARR growing faster than ARR |
| Subscription and support gross margin | 74% vs 71% a year ago | Scalability of the cloud platform |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Deal timing / slipped deals | — | A couple of deals slipped from Q3 on timing; not macro or AI-related; strong pipeline into Q4 | — |
| New products (ProNavigator, PricingCenter) | Objective this year to establish these product lines | Surpassed expectations; five ProNavigator and three PricingCenter wins, shorter sales cycles than core modernization | Accelerating |
| AI / agentic development tooling | — | Claude Code and MCP servers connected to the platform driving major productivity gains; ~35% faster migrations | Expanding |
| Fully ramped ARR vs ARR | Fully ramped ARR growth of 22% last year | Continues to outpace ARR growth; expected to hold or exceed prior levels for FY2026 | Strengthening |
| Core system modernization demand | — | Insurers aligning around Guidewire as long-term core platform partner; AI raising the bar to modernize | Strengthening |
| Leadership transition | — | CCO David Laker moving to strategic partners role; Shane Cassidy joining as CCO after Q4 | — |