Guidewire Software, Inc. (NYSE:GWRE) shares are trading higher premarket on Friday after the company reported better-than-expected second-quarter results.

The company also issued third-quarter sales guidance above estimates and raised its fiscal 2026 sales outlook beyond analyst expectations.

Earnings Snapshot

Revenue rose 24% year over year (Y/Y) to $359.1 million, exceeding the consensus of $341.7 million.

By segment, subscription and support revenue rose 33% Y/Y to $237.2 million, and services revenue increased 30% Y/Y to $62.4 million; however, license revenue fell 7% Y/Y to $59.5 million.

As of January 31, 2026, annual recurring revenue (ARR) stood at $1.12 billion.

Adjusted operating income increased to $87.4 million from $53.9 million a year ago quarter.

As of January 31, 2026, cash, cash equivalents, and investments stood at $1.35 billion.

Adjusted EPS of $1.17 beat the consensus of 77 cents.

Buyback

In the quarter, Guidewire completed its previously authorized share repurchase program in September 2022.

In January 2026, the company authorized a new $500 million share repurchase program.

As of January 31, 2026, $490 million worth of shares remained under the January 2026 share repurchase program.

Guidance

Guidewire expects the third-quarter fiscal 2026 ending ARR of $1.14 billion to $1.15 billion, subscription and support revenue of $239 million to $243 million, and adjusted operating income of $59 million to $65 million.

The company projects quarterly revenue of $352 million to $358 million, above the analyst consensus estimate of $339.78 million.

For fiscal 2026, Guidewire raised its revenue outlook to $1.438 billion to $1.448 billion from its prior forecast of $1.403 billion to $1.419 billion. Analysts expect $1.414 billion.

The company expects fiscal-year ending ARR of $1.229 billion to $1.237 billion, subscription and support revenue of $962 million to $966 million, and adjusted operating income of $293 million to $303 million.

GWRE Price Action: Guidewire Software shares were up 2.00% at $164.06 during premarket trading on Friday, according to Benzinga Pro data.

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