FOSTER CITY, Calif.--(BUSINESS WIRE)--Guidewire Software, Inc. (NYSE: GWRE), a provider of software products for property and casualty insurers, today announced its financial results for the fiscal quarter ended April 30, 2015.
“Our third quarter results were at or above the high end of our outlook due to the continued adoption of Guidewire InsuranceSuite and momentum for our newer products,” said Marcus Ryu, chief executive officer, Guidewire Software. “Our results reflect our continuing efforts to leverage our system integrator partners, who are successfully scaling our implementation capacity and delivering customer success, as demonstrated by the numerous production go-lives achieved in the quarter. Our leading SI partners also continue to expand their abilities to provide insurers with a fully hosted version of InsuranceSuite.”
“We continue to make significant investments in R&D to advance InsuranceSuite as well as our products for digital interaction, and data management and analytics. We are encouraged by our customers’ adoption of these newer offerings, including Spotlight, our recently announced, SaaS-based product, which provides actionable insights for underwriters by combining geo-visualization and risk scoring,” said Ryu. “We have strong momentum with existing and new customers, and are entering the fourth quarter of fiscal 2015 with a robust pipeline of large opportunities. When combined with our long-term customer contracts, we believe Guidewire is well positioned to deliver term license revenue growth of 20% or more in the next fiscal year.”
Third Quarter Fiscal 2015 Financial Highlights
Revenue
- License revenue for the third quarter of fiscal 2015 was $33.3 million, compared to $31.9 million in the same period in fiscal 2014. Maintenance revenue was $12.2 million, compared to $10.4 million in the same period in fiscal 2014. Services revenue was $40.0 million, compared to $39.7 million in the same period in fiscal 2014. Total revenue was $85.4 million, compared to $82.0 million in the same period in fiscal 2014.
- License revenue for the nine month period of fiscal 2015 was $105.8 million, compared to $86.0 million in the same period in fiscal 2014. Maintenance revenue was $36.9 million, compared to $30.0 million in the same period in fiscal 2014, and Services revenue was $112.0 million, compared to $116.0 million in the same period in fiscal 2014. Total revenue was $254.6 million, compared to $232.0 million in the same period in fiscal 2014.
- Rolling four-quarter recurring term license and maintenance revenue was $208.9 million, an increase of 26% compared to the period ending April 30, 2014.
Profitability
- The GAAP operating loss was $6.7 million for the third quarter of fiscal 2015, compared with operating income $0.1 million in the comparable period in fiscal 2014.
- Non-GAAP operating income was $6.1 million for the third quarter of fiscal 2015, compared with $10.9 million in the comparable period in fiscal 2014.
- The GAAP net loss was $3.0 million for the third quarter of fiscal 2015, compared with a net loss of $1.9 million for the comparable period in fiscal 2014. GAAP net loss per share was $0.04, based on diluted weighted average shares outstanding of 70.3 million, compared with a net loss of $0.03 per share for the comparable period in fiscal 2014, based on diluted weighted average shares outstanding of 68.3 million.
- Non-GAAP net income was $2.7 million for the third quarter of fiscal 2015, compared with $7.5 million in the comparable period in fiscal 2014. Non-GAAP net income per diluted share was $0.04, based on diluted weighted average shares outstanding of 72.3 million, compared with $0.11 in the comparable period in fiscal 2014, based on diluted weighted average shares outstanding of 71.2 million.
Balance Sheet
- The Company had $643.8 million in cash, cash equivalents and investments at April 30, 2015, compared with $647.8 million at July 31, 2014. The Company had $26.6 million in cash flow provided by operations in the third quarter of fiscal 2015, compared with cash flow from operations of $20.3 million in the comparable period in fiscal 2014.
Business Outlook
Guidewire is issuing the following outlook for the fourth quarter and fiscal 2015, based on current expectations:
| (in $ millions, except per share outlook) |
Fourth Quarter |
Full Year
Fiscal 2015 |
||||||||
| Revenue | 119.3 - 123.3 | 374.0 - 378.0 | ||||||||
| License revenue | 67.2 - 71.2 | 173.0 - 177.0 | ||||||||
| Maintenance revenue | 12.6 - 13.6 | 49.5 - 50.5 | ||||||||
| Services revenue | 38.0 - 40.0 | 150.0 - 152.0 | ||||||||
| GAAP operating income/(loss) | 11.6 - 17.6 | 4.8 - 10.8 | ||||||||
| Non-GAAP operating income | 24.8 – 30.8 | 57.0 - 63.0 | ||||||||
| GAAP net income/(loss) | 3.2 - 4.8 | 1.2 - 2.9 | ||||||||
| Per share | 0.04 - 0.07 | 0.02 - 0.04 | ||||||||
| Non-GAAP net income | 16.4 - 20.3 | 37.4 - 41.3 | ||||||||
| Per share | 0.23 - 0.28 | 0.52 - 0.57 | ||||||||
Outlook for revenue growth in fiscal 2015 reflects an estimated $10 million reduction in total revenue due to a shift in foreign currency rates since guidance for fiscal 2015 was provided in September 2014. Non-GAAP operating income and non-GAAP net income in the table above exclude stock-based compensation expense and amortization of intangible assets.
Looking to fiscal 2016, Guidewire anticipates term license revenue growth of 20% or higher. The company will provide detailed guidance for fiscal 2016 when it reports its fourth quarter fiscal 2015 results.
Conference Call Information
|
What: |
Guidewire Software third quarter fiscal 2015 financial results conference call | ||||
| When: | Tuesday, June 2, 2015 | ||||
| Time: | 2:00 p.m. PT (5:00 p.m. ET) | ||||
| Live Call: | (888) 631-5930, domestic | ||||
| (913) 312-1269, international | |||||
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Conference ID: 5726232 |
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| Replay: | (877) 870-5176, domestic | ||||
| (858) 384-5517, international | |||||
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Conference ID: 5726232 |
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| Webcast: |
http://ir.guidewire.com (live and replay) |
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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, Non-GAAP net income, Non-GAAP earnings per share and Non-GAAP effective tax rate.
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 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. 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 Guidewire Software
Guidewire builds software products that help Property/Casualty insurers replace their legacy core systems and transform their business. Designed to be flexible and scalable, Guidewire products enable insurers to deliver excellent service, increase market share and lower operating costs. Guidewire InsuranceSuite™ provides the core systems used by insurers as operational systems of record. Additional products provide support for data management, business intelligence, anytime/anywhere access and guidance and monitoring. More than 180 Property/Casualty insurers around the world have selected Guidewire. For more information, please visit www.guidewire.com. Follow us on twitter: @Guidewire_PandC.
NOTE: Guidewire, Guidewire Software, Guidewire ClaimCenter, Guidewire PolicyCenter, and Guidewire BillingCenter are registered trademarks of Guidewire Software, Inc. in the United States and/or other countries.
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, 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 Forms 10-K 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: the market for our software may develop more slowly than expected or than it has in the past; 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 revenues; our services revenues produce lower gross margins than our license and maintenance revenues; assertions by third parties that we violate their intellectual property rights could substantially harm our business; we face intense competition in our market; 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, 2015 |
July 31, 2014 |
||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | 156,942 | $ | 148,101 | |||||||
| Short-term investments | 393,051 | 296,231 | |||||||||
| Accounts receivable | 59,554 | 49,839 | |||||||||
| Deferred tax assets, current | 12,015 | 11,431 | |||||||||
| Prepaid expenses and other current assets | 12,770 | 10,828 | |||||||||
| Total current assets | 634,332 | 516,430 | |||||||||
| Long-term investments | 93,824 | 203,449 | |||||||||
| Property and equipment, net | 12,427 | 12,607 | |||||||||
| Intangible assets, net | 4,359 | 5,439 | |||||||||
| Deferred tax assets, noncurrent | 15,936 | 8,681 | |||||||||
| Goodwill | 9,205 | 9,205 | |||||||||
| Other assets | 817 | 1,416 | |||||||||
| TOTAL ASSETS | $ | 770,900 | $ | 757,227 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ | 10,205 | $ | 7,030 | |||||||
| Accrued employee compensation | 25,409 | 34,912 | |||||||||
| Deferred revenues, current | 62,016 | 48,937 | |||||||||
| Other current liabilities | 5,730 | 4,507 | |||||||||
| Total current liabilities | 103,360 | 95,386 | |||||||||
| Deferred revenues, noncurrent | 1,812 | 6,395 | |||||||||
| Other liabilities | 4,381 | 4,760 | |||||||||
| Total liabilities | 109,553 | 106,541 | |||||||||
| STOCKHOLDERS’ EQUITY: | |||||||||||
| Common stock | 7 | 7 | |||||||||
| Additional paid-in capital | 645,349 | 629,076 | |||||||||
| Accumulated other comprehensive loss | (4,971 | ) | (1,367 | ) | |||||||
| Retained earnings | 20,962 | 22,970 | |||||||||
| Total stockholders’ equity | 661,347 | 650,686 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 770,900 | $ | 757,227 | |||||||
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||
|
(unaudited, in thousands except share and per share data) |
||||||||||||||||||||||
| Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| Revenues: | ||||||||||||||||||||||
| License | $ | 33,302 | $ | 31,927 | $ | 105,777 | $ | 86,012 | ||||||||||||||
| Maintenance | 12,183 | 10,440 | 36,866 | 29,969 | ||||||||||||||||||
| Services | 39,955 | 39,668 | 111,977 | 116,058 | ||||||||||||||||||
| Total revenues | 85,440 | 82,035 | 254,620 | 232,039 | ||||||||||||||||||
| Cost of revenues: (1) (2) | ||||||||||||||||||||||
| License | 1,184 | 849 | 3,411 | 3,288 | ||||||||||||||||||
| Maintenance | 2,299 | 2,133 | 6,812 | 5,817 | ||||||||||||||||||
| Services | 34,421 | 33,293 | 97,532 | 101,194 | ||||||||||||||||||
| Total cost of revenues | 37,904 | 36,275 | 107,755 | 110,299 | ||||||||||||||||||
| Gross profit: | ||||||||||||||||||||||
| License | 32,118 | 31,078 | 102,366 | 82,724 | ||||||||||||||||||
| Maintenance | 9,884 | 8,307 | 30,054 | 24,152 | ||||||||||||||||||
| Services | 5,534 | 6,375 | 14,445 | 14,864 | ||||||||||||||||||
| Total gross profit | 47,536 | 45,760 | 146,865 | 121,740 | ||||||||||||||||||
| Operating expenses: (1) (2) | ||||||||||||||||||||||
| Research and development | 24,575 | 19,761 | 67,167 | 54,813 | ||||||||||||||||||
| Sales and marketing | 18,801 | 16,735 | 56,506 | 49,686 | ||||||||||||||||||
| General and administrative | 10,860 | 9,117 | 30,195 | 25,240 | ||||||||||||||||||
| Total operating expenses | 54,236 | 45,613 | 153,868 | 129,739 | ||||||||||||||||||
| Income (loss) from operations | (6,700 | ) | 147 | (7,003 | ) | (7,999 | ) | |||||||||||||||
| Interest income, net | 636 | 415 | 1,643 | 919 | ||||||||||||||||||
| Other income (expense), net | 77 | 115 | (1,267 | ) | 172 | |||||||||||||||||
| Income (loss) before income taxes (1) | (5,987 | ) | 677 | (6,627 | ) | (6,908 | ) | |||||||||||||||
| Provision for (benefit from) income taxes (1) | (3,000 | ) | 2,590 | (4,619 | ) | (1,872 | ) | |||||||||||||||
| Net income (loss)(1) | $ | (2,987 | ) | $ | (1,913 | ) | $ | (2,008 | ) | $ | (5,036 | ) | ||||||||||
| Net income (loss) per share: (1) | ||||||||||||||||||||||
| Basic | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.08 | ) | ||||||||||
| Diluted | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.08 | ) | ||||||||||
| Shares used in computing net income (loss) per share: (1) | ||||||||||||||||||||||
| Basic | 70,348,356 | 68,261,964 | 69,844,077 | 64,718,852 | ||||||||||||||||||
| Diluted | 70,348,356 | 68,261,964 | 69,844,077 | 64,718,852 | ||||||||||||||||||
(1) See Note 2 “Change in Accounting Policy - Stock-Based
Compensation” of Notes to Consolidated Financial Statements for the
fiscal year ended July 31, 2014 included in the Company’s Annual Report
on Form 10-K.
(2) Amounts include stock-based
compensation expense as follows:
| Three Months Ended April 30, | Nine Months Ended April 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| (unaudited, in thousands) | |||||||||||||||||||||
| Stock-based compensation expenses: (1) | |||||||||||||||||||||
| Cost of license revenue | $ | 54 | $ | 45 | $ | 158 | $ | 141 | |||||||||||||
| Cost of maintenance revenues | 293 | 211 | 879 | 572 | |||||||||||||||||
| Cost of services revenues | 3,774 | 3,028 | 11,165 | 8,862 | |||||||||||||||||
| Research and development | 2,813 | 2,260 | 7,618 | 6,657 | |||||||||||||||||
| Marketing and sales | 2,620 | 2,291 | 9,049 | 8,140 | |||||||||||||||||
| General and administrative | 2,840 | 2,532 | 9,011 | 7,320 | |||||||||||||||||
| Total stock-based compensation expenses | $ | 12,394 | $ | 10,367 | $ | 37,880 | $ | 31,692 | |||||||||||||
(1) See Note 2 “Change in Accounting Policy - Stock-Based Compensation” of Notes to Consolidated Financial Statements for the fiscal year ended July 31, 2014 included in the Company’s Annual Report on Form 10-K.
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||
|
(unaudited, in thousands) |
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| Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||
| Net income(loss) (1) | $ | (2,987 | ) | $ | (1,913 | ) | $ | (2,008 | ) | $ | (5,036 | ) | ||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||
| Depreciation and amortization | 1,929 | 1,770 | 5,550 | 4,978 | ||||||||||||||||||
| Stock-based compensation (1) | 12,394 | 10,367 | 37,880 | 31,692 | ||||||||||||||||||
| Excess tax benefit from exercise of stock options and vesting of RSUs | — | (209 | ) | — | (498 | ) | ||||||||||||||||
| Deferred tax assets (1) | (4,397 | ) | 2,583 | (7,856 | ) | (3,353 | ) | |||||||||||||||
| Other noncash items affecting net loss | 1,105 | 1,088 | 3,989 | 2,227 | ||||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||||
| Accounts receivable | 2,718 | (1,702 | ) | (10,057 | ) | (17,820 | ) | |||||||||||||||
| Prepaid expenses and other assets | (3,383 | ) | (3,290 | ) | (1,656 | ) | (2,187 | ) | ||||||||||||||
| Accounts payable | 2,946 | 578 | 3,763 | 135 | ||||||||||||||||||
| Accrued employee compensation | 4,473 | 2,858 | (8,742 | ) | (2,079 | ) | ||||||||||||||||
| Other liabilities | 534 | 1,507 | 991 | 822 | ||||||||||||||||||
| Deferred revenues | 11,265 | 6,687 | 8,810 | 17,172 | ||||||||||||||||||
| Net cash provided by operating activities | 26,597 | 20,324 | 30,664 | 26,053 | ||||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||
| Purchases of available-for-sale securities | (124,300 | ) | (166,904 | ) | (361,141 | ) | (521,005 | ) | ||||||||||||||
| Sales and maturities of available-for-sale securities | 138,170 | 95,818 | 370,065 | 206,046 | ||||||||||||||||||
| Purchase of property and equipment | (1,425 | ) | (1,088 | ) | (5,076 | ) | (3,669 | ) | ||||||||||||||
| Acquisition, net of cash acquired | — | (62 | ) | — | (157 | ) | ||||||||||||||||
| Net cash provided by (used in) investing activities | 12,445 | (72,236 | ) | 3,848 | (318,785 | ) | ||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||
| Proceeds from issuance of common stock upon exercise of stock options | 936 | 3,211 | 4,795 | 7,354 | ||||||||||||||||||
| Taxes remitted on RSU awards vested | (8,554 | ) | (10,456 | ) | (26,402 | ) | (25,654 | ) | ||||||||||||||
| Proceeds from issuance of common stock in connection with stock offerings, net of underwriting discounts and commission | — | — | — | 389,949 | ||||||||||||||||||
| Costs paid in connection with stock offerings | — | 2 | — | (408 | ) | |||||||||||||||||
| Excess tax benefit from exercise of stock options and vesting of RSUs | — | 209 | — | 498 | ||||||||||||||||||
| Net cash provided by (used in) financing activities | (7,618 | ) | (7,034 | ) | (21,607 | ) | 371,739 | |||||||||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | 294 | 653 | (4,064 | ) | 562 | |||||||||||||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 31,718 | (58,293 | ) | 8,841 | 79,569 | |||||||||||||||||
| CASH AND CASH EQUIVALENTS—Beginning of period | 125,224 | 217,629 | 148,101 | 79,767 | ||||||||||||||||||
| CASH AND CASH EQUIVALENTS—End of period | $ | 156,942 | $ | 159,336 | $ | 156,942 | $ | 159,336 | ||||||||||||||
(1) See Note 2 “Change in Accounting Policy - Stock-Based Compensation” of Notes to Consolidated Financial Statements for the fiscal year ended July 31, 2014 included in the Company’s Annual Report on Form 10-K.
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | |||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Operating Results | |||||||||||||||||||||
|
(unaudited, in thousands) |
|||||||||||||||||||||
| 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 April 30, | Nine Months Ended April 30, | ||||||||||||||||||||
| Income (loss) from operations reconciliation: (1) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
| GAAP net income (loss) from operations | $ | (6,700 | ) | $ | 147 | $ | (7,003 | ) | $ | (7,999 | ) | ||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||
| Stock-based compensation (2) | 12,394 | 10,367 | 37,880 | 31,692 | |||||||||||||||||
| Amortization of intangibles (2) | 360 | 360 | 1,080 | 1,080 | |||||||||||||||||
| Non-GAAP net income from operations | $ | 6,054 | $ | 10,874 | $ | 31,957 | $ | 24,773 | |||||||||||||
| Net income (loss) reconciliation: (1) | |||||||||||||||||||||
| GAAP net income (loss) | $ | (2,987 | ) | $ | (1,913 | ) | $ | (2,008 | ) | $ | (5,036 | ) | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||
| Stock-based compensation (2) | 12,394 | 10,367 | 37,880 | 31,692 | |||||||||||||||||
| Amortization of intangibles (2) | 360 | 360 | 1,080 | 1,080 | |||||||||||||||||
| Tax effect on non-GAAP adjustments (3) | (7,039 | ) | (1,305 | ) | (16,109 | ) | (10,616 | ) | |||||||||||||
| Non-GAAP net income | $ | 2,728 | $ | 7,509 | $ | 20,843 | $ | 17,120 | |||||||||||||
| Three Months Ended April 30, | Nine Months Ended April 30, | ||||||||||||||||||||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||||||||||||||||
| Tax provision (benefits) reconciliation: | |||||||||||||||||||||||||||||||||||||||||
| GAAP tax provision (benefits) | $ | (3,000 | ) | 50 | % | $ | 2,590 | 383 | % | $ | (4,619 | ) | 70 | % | $ | (1,872 | ) | 27 | % | ||||||||||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 4,438 | 3,711 | 12,901 | 10,752 | |||||||||||||||||||||||||||||||||||||
| Amortization of intangibles | 129 | 129 | 368 | 366 | |||||||||||||||||||||||||||||||||||||
| ISO deduction | 70 | 90 | 285 | 460 | |||||||||||||||||||||||||||||||||||||
| Tax effect on GAAP profit before taxes due to different tax rates between GAAP and non-GAAP | 2,402 | (2,625 | ) | 2,555 | (962 | ) | |||||||||||||||||||||||||||||||||||
| Non-GAAP tax provision | $ | 4,039 | 60 | % | $ | 3,895 | 34 | % | $ | 11,490 | 36 | % | $ | 8,744 | 34 | % | |||||||||||||||||||||||||
(1) See Note 2 “Change in Accounting Policy - Stock-Based Compensation”
of Notes to Consolidated Financial Statements for the fiscal year ended
July 31, 2014 included in the Company’s Annual Report on Form 10-K.
(2)
Adjustments relate to amortization of acquired intangibles and
stock-based compensation recognized during the period for GAAP purposes.
(3)
Adjustment reflects the tax benefit resulting from all non-GAAP
adjustments.
| GUIDEWIRE SOFTWARE, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
| 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 April 30, | Nine Months Ended April 30, | ||||||||||||||||||||||
| Earnings per share reconciliation: (1) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| GAAP earnings per share - Diluted | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.08 | ) | |||||||||||
| Amortization of intangibles acquired in business combinations | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||||||||||
| Stock-based compensation | 0.18 | 0.15 | 0.54 | 0.49 | |||||||||||||||||||
| Less tax benefit of non GAAP items | (0.10 | ) | (0.02 | ) | (0.23 | ) | (0.16 | ) | |||||||||||||||
| Non-GAAP dilutive shares excluded from GAAP EPS calculation (2) | (0.01 | ) | — | (0.01 | ) | (0.02 | ) | ||||||||||||||||
| Non-GAAP earnings per share - Diluted | $ | 0.04 | $ | 0.11 | $ | 0.29 | $ | 0.25 | |||||||||||||||
| (1) See Note 2 “Change in Accounting Policy - Stock-Based Compensation” of Notes to Consolidated Financial Statements for the fiscal year ended July 31, 2014 included in the Company’s Annual Report on Form 10-K. | |||||||||||||||||||||||
| (2) 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 Non-GAAP earnings per share and are included here. | |||||||||||||||||||||||
| Three Months Ended April 30, | Nine Months Ended April 30, | ||||||||||||||||||||||
| Shares used in computing non-GAAP per share amounts: (1) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| Weighted average shares - Diluted | 70,348,356 | 68,261,964 | 69,844,077 | 64,718,852 | |||||||||||||||||||
| Non-GAAP dilutive shares excluded from GAAP EPS calculation (2) | 1,931,434 | 2,907,140 | 2,264,383 | 3,598,963 | |||||||||||||||||||
| Pro forma weighted average shares - Diluted | 72,279,790 | 71,169,104 | 72,108,460 | 68,317,815 | |||||||||||||||||||
| (1) See Note 2 “Change in Accounting Policy - Stock-Based Compensation” of Notes to Consolidated Financial Statements for the fiscal year ended July 31, 2014 included in the Company’s Annual Report on Form 10-K. | |||||||||||||||||||||||
| (2) 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 Non-GAAP earnings per share and are included here. | |||||||||||||||||||||||