# Guidewire Software, Inc. (GWRE) Informational only - not investment advice. CIK: 0001528396 SIC: 7372 Services-Prepackaged Software SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7372 Services-Prepackaged Software](/industry/7372/) Latest 10-K filed: 2025-09-11 SEC page: https://www.sec.gov/edgar/browse/?CIK=1528396 Filing source: https://www.sec.gov/Archives/edgar/data/1528396/000152839625000221/gwre-20250731.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1202459000 | USD | 2025 | 2025-09-11 | | Net income | 69804000 | USD | 2025 | 2025-09-11 | | Assets | 2721099000 | USD | 2025 | 2025-09-11 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-09-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001528396.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 509,533,000 | 652,849,000 | 719,514,000 | 742,307,000 | 743,267,000 | 812,614,000 | 905,341,000 | 980,497,000 | 1,202,459,000 | | Net income | 14,976,000 | 18,072,000 | -26,743,000 | 20,732,000 | -27,198,000 | -66,507,000 | -180,431,000 | -111,855,000 | -6,103,000 | 69,804,000 | | Operating income | 16,437,000 | 21,861,000 | -15,624,000 | 1,471,000 | -23,886,000 | -105,584,000 | -199,447,000 | -149,490,000 | -52,573,000 | 41,068,000 | | Gross profit | 272,612,000 | 317,974,000 | 356,066,000 | 395,164,000 | 404,292,000 | 389,560,000 | 377,176,000 | 458,211,000 | 583,361,000 | 752,053,000 | | Diluted EPS | 0.20 | 0.24 | -0.34 | 0.25 | -0.33 | -0.79 | -2.16 | -1.36 | -0.07 | 0.81 | | Assets | 916,178,000 | 1,078,901,000 | 1,981,433,000 | 2,166,963,000 | 2,364,852,000 | 2,321,845,000 | 2,266,897,000 | 2,027,888,000 | 2,226,294,000 | 2,721,099,000 | | Liabilities | 132,243,000 | 190,371,000 | 567,817,000 | 592,762,000 | 708,084,000 | 776,951,000 | 815,240,000 | 828,422,000 | 883,562,000 | 1,263,869,000 | | Stockholders' equity | 783,935,000 | 888,530,000 | 1,413,616,000 | 1,574,201,000 | 1,656,768,000 | 1,544,894,000 | 1,451,657,000 | 1,199,466,000 | 1,342,732,000 | 1,457,230,000 | | Cash and cash equivalents | 223,582,000 | 263,176,000 | 437,140,000 | 254,101,000 | 366,969,000 | 384,910,000 | 606,303,000 | 401,813,000 | 547,992,000 | 697,902,000 | | Net margin | | 3.55% | -4.10% | 2.88% | -3.66% | -8.95% | -22.20% | -12.36% | -0.62% | 5.81% | | Operating margin | | 4.29% | -2.39% | 0.20% | -3.22% | -14.21% | -24.54% | -16.51% | -5.36% | 3.42% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001528396.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2023-Q1 | 2022-10-31 | | | -0.83 | reported discrete quarter | | 2023-Q2 | 2023-01-31 | | | -0.11 | reported discrete quarter | | 2023-Q3 | 2023-04-30 | | | -0.56 | reported discrete quarter | | 2023-Q4 | 2023-07-31 | 269,958,000 | 12,220,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2023-10-31 | 207,407,000 | -27,071,000 | -0.33 | reported discrete quarter | | 2024-Q2 | 2023-10-31 | | -27,071,000 | | reported discrete quarter | | 2024-Q3 | 2024-01-31 | | 9,687,000 | | reported discrete quarter | | 2024-Q2 | 2024-01-31 | 240,897,000 | | 0.12 | reported discrete quarter | | 2024-Q3 | 2024-04-30 | 240,678,000 | | -0.07 | reported discrete quarter | | 2024-Q4 | 2024-07-31 | 291,515,000 | 16,759,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q2 | 2024-10-31 | | 9,139,000 | | reported discrete quarter | | 2025-Q1 | 2024-10-31 | 262,901,000 | 9,139,000 | 0.11 | reported discrete quarter | | 2025-Q3 | 2025-01-31 | | -37,277,000 | | reported discrete quarter | | 2025-Q2 | 2025-01-31 | 289,480,000 | | -0.45 | reported discrete quarter | | 2025-Q3 | 2025-04-30 | 293,508,000 | | 0.54 | reported discrete quarter | | 2025-Q4 | 2025-07-31 | 356,570,000 | 51,951,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q2 | 2025-10-31 | | 31,308,000 | | reported discrete quarter | | 2026-Q1 | 2025-10-31 | 332,639,000 | 31,308,000 | 0.36 | reported discrete quarter | | 2026-Q3 | 2026-01-31 | | 60,110,000 | | reported discrete quarter | | 2026-Q2 | 2026-01-31 | 359,095,000 | | 0.70 | reported discrete quarter | | 2026-Q3 | 2026-04-30 | 372,541,000 | | 0.19 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1528396/000152839626000027/gwre-20260430.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-06-05 Report date: 2026-04-30 ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the Risk Factors included in Item 1A of Part II of this Quarterly Report on Form 10-Q. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references in this report to particular years or quarters refer to our fiscal years ended in July and the associated quarters of those fiscal years. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law. Overview Guidewire is the platform that property and casualty (“P&C”) insurers rely on to engage with customers, innovate, and operate more efficiently. Our platform combines core systems of record with digital, analytics, and artificial intelligence (“AI”) capabilities. We serve insurers of all sizes, ranging from global carriers to regional and local providers, helping them navigate a rapidly changing insurance landscape. Our foundational core products, InsuranceSuite and InsuranceNow, are delivered primarily as cloud-based subscription services. Historically, InsuranceSuite has also been available for self-managed installations. These products serve as transactional systems of record, fully supporting insurance operations, including product definition, policy administration, claims management and billing. In addition, we provide digital engagement products that enable seamless sales, omnichannel service, and enhanced claims experiences for policyholders, agents, vendors, and field personnel. Our analytics products allow insurers to manage and use data more effectively, gain business insights, improve operational efficiency, and underwrite emerging risks. To support insurers worldwide, we localize our products to address diverse regulatory, language, and currency requirements. InsuranceSuite is a highly configurable and scalable product, delivered as a service, and primarily comprised of five core applications (PolicyCenter, ClaimCenter, BillingCenter, and the recently announced PricingCenter and UnderwritingCenter) that can be subscribed to separately or together. These applications are built on and optimized for our Guidewire Cloud Platform (“GWCP”) architecture and leverage our in-house cloud operations team. InsuranceSuite is designed to support multiple releases each year to accelerate delivery of new capabilities and ensure that cloud customers remain on the latest version and gain fast access to our innovation efforts. Additionally, InsuranceSuite embeds digital and analytics capabilities natively into our platform. Most new sales and implementations are for InsuranceSuite. InsuranceNow is a complete, cloud-based application that offers policy administration, claims management, and billing functionality, plus pre-integrated document production, analytics, and other capabilities, that increases agility without adding complexity. Like InsuranceSuite, InsuranceNow is hosted on GWCP and managed by our internal cloud operations team. InsuranceNow is currently only available in the United States and Canada, and is generally suited to mid-market carriers and managing general agents whose needs are often not as complex as a typical InsuranceSuite customer. We reach customers directly through our global sales team and in partnership with third-party global system integrators (“SI’s”). Because our platform is central to insurers’ operations, customer evaluation cycles are often extensive, particularly when multiple products are involved or when insurers are moving to GWCP for the first time. Sales processes typically include detailed due diligence and customer reference checks. Our growth depends on continuously enhancing existing products, introducing new capabilities, ensuring efficient cloud operations, expanding local content, and providing access to innovation through the Guidewire Marketplace. We sell our products primarily through subscription services for our platform and cloud-delivered products. We generally price our subscription services for the core products based on the amount of Direct Written Premium (“DWP”) managed on our platform, with certain cloud-delivered products priced based on usage or other metrics. Initial subscription agreements are generally five years in duration, with annual renewals thereafter. In some instances, we have customers that sign contracts with an initial term of seven years or longer. Subscription revenue is recognized ratably over the contract term. We also offer term licenses, primarily for existing on-premise customers, as well as support and professional services. Support is typically priced as a percentage of license fees and recognized ratably, while most professional services are billed monthly on a time-and-materials basis. However, certain services engagements are based on a fixed fee and revenue is recognized on a percentage of completion basis. Over the past few years, we have primarily been entering into cloud-based subscription arrangements with our new and existing customers, and we anticipate that subscription arrangements will continue to be a significant majority of annual new sales going forward. We may decide to change certain contract terms in new arrangements to remain competitive or otherwise meet market demands which may impact the way we recognize revenue and/or Annual Recurring Revenue (“ARR”). 26 Table of Contents To extend our technology leadership in the global market and to drive operating efficiency, we continue to invest in product development and cloud operations to enhance and improve our current products, introduce new products, and advance our ability to securely and cost-effectively deliver our services in the cloud. Continued investment is critical as we seek to assist our customers in achieving their technology goals, maintain our competitive advantage, grow our revenue, expand internationally, and meet evolving customer demands. In certain cases, we may also acquire skills and technologies to manage our cloud infrastructure and accelerate our time to market for new products, solutions, and upgrades. Our track record of success with customers and their implementations is central to maintaining our strong competitive position. We rely on our global services team and SI partners to ensure that teams with the right combination of product, business, and language skills are used in the most efficient way to meet our customers’ implementation and migration needs. We have extensive relationships with SI, consulting, technology, and other industry partners. Our network of partners has expanded as interest in and adoption of our platform has grown. We encourage our partners to co-market, pursue joint sales initiatives, and drive broader adoption of our technology, helping us grow our business more efficiently and enabling us to focus our resources on continued innovation and further enhancement of our solutions. We work closely with our network of SI partners to facilitate new sales and implementations of our products. Our partnership with leading SI partners allows us to increase efficiency and scale while reducing customer implementation and migration costs. We continue to invest time and resources to increase the number of qualified consultants employed by our SI partners, develop relationships with new partners in existing and new markets, and ensure that all SI partners are qualified to assist with implementing our products. We believe this model will continue to serve us well, and we intend to continue to expand our network of partners and the number of certified consultants with whom we work so we can leverage our SI partners more effectively, especially for future subscription migrations and implementations. We face a number of risks in the execution of our strategy, including, but not limited to, risks related to fluctuations in our results due to factors largely outside of our control, reliance on sales to a relatively small number of large customers and the related substantial negotiating leverage of these customers, lengthy and variable sales and implementation cycles, competing effectively in the global market, growing our business and managing our expanding operations, development and use of AI in an evolving regulatory environment, making long-term pricing commitments based on cost estimates that may change, expanding market adoption of our cloud-based offerings, maintaining customer satisfaction and renewals, cost-effectively and securely managing the infrastructure of our cloud-based customers, and the impact of these and other factors, including the impact of AI on the insurance and software industries, on our stock price and its volatility. In response to these and other risks we might face, we continue to invest in many areas of our business, including product development, cloud operations, cybersecurity, introduction of new products and/or new features, implementation and migration services, and sales and marketing. Seasonality We have experienced seasonal variations in our license revenue and, to a lesser extent, in our subscription revenue as a result of increased customer orders in our fourth fiscal quarter, which is the quarter ending July 31. We generally see significantly increased orders in our fourth fiscal quarter due to efforts by our sales team to achieve annual incentives. Because we recognize revenue upfront for term licenses compared to over time for subscription services, an increase in term licenses due to renewals or expansion orders, or non-renewals may impact our quarterly results. Subscription sales now represent the significant majority of total sales and, as a result when compared to term license sales, the revenue we recognize in the initial fiscal year of an order is lower, deferred revenue is higher, and our total reported revenue growth may be adversely affected in the near term due to the ratable nature of these arrangements. Over time, this ratable revenue dynamic will dampen the impact of seasonality on our revenue. Our services revenue is also subject to seasonal fluctuations, though to a lesser degree than our license revenue. Our services revenue is impacted by the number of billable days in a given fiscal quarter. Our second fiscal quarter, which is the quarter ending January 31, usually has fewer billable days due to the impact of calendar year end holidays in Europe and the United States. Our fourth fiscal quarter usually has fewer billable days due to the impact of vacations taken by our services professionals. Because we pay our services professionals the same amount throughout the year, our gross margins on our services revenue are usually lower in these quarters. This seasonal pattern, however, may be absent in any given year. Global Events Global events have adversely affected and may continue to adversely affect workforces, organizations, economies, and financial markets globally, leading to economic downturns, inflationary pressures, and increased market volatility. For instance, the ongoing war between Russia and Ukraine, conflicts in the Middle East, escalating tensions in the South China Sea, currency exchange fluctuations, changes in interest rates, changes in trade policies and practices (including the imposition of tariffs), previous bank failures in the United States and Switzerland, and supply chain issues have contributed to global economic and market volatility in recent years. We are unable to accurately predict the full impact that these global events will have on our results of operations, financial condition, liquidity, and cash flows due to numerous uncertainties. 27 Table of Contents Our business and financial results have been and may in the future be impact [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto included in Item 8 and the Risk Factors included in Item 1A of Part I of this Annual Report on Form 10-K. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references in this Annual Report on Form 10-K to particular years or quarters refer to our fiscal years ended in July and the associated quarters of those fiscal years. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law. We have elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our Form 10-K for the fiscal year ended July 31, 2024, filed on September 16, 2024, for reference to discussion of the fiscal year ended July 31, 2023, the earliest of the three fiscal years presented. Overview Guidewire is the platform that property and casualty (“P&C”) insurers rely on to engage with customers, innovate, and operate more efficiently. Our platform combines core systems of record with digital, analytics, and artificial intelligence (“AI”) capabilities. We serve insurers of all sizes, ranging from global carriers to regional and local providers, helping them navigate a rapidly changing insurance landscape. Our foundational core products, InsuranceSuite and InsuranceNow, are delivered primarily as cloud-based subscription services. Historically, InsuranceSuite has also been available for self-managed installations. These products serve as transactional systems of record, fully supporting insurance operations, including product definition, policy administration, claims management and billing. In addition, we provide digital engagement products that enable seamless sales, omnichannel service, and enhanced claims experiences for policyholders, agents, vendors, and field personnel. Our analytics products allow insurers to manage and use data more effectively, gain business insights, improve operational efficiency, and underwrite emerging risks. To support insurers worldwide, we localize our products to address diverse regulatory, language, and currency requirements. InsuranceSuite is a highly configurable and scalable product, delivered as a service, and primarily comprised of three core applications (PolicyCenter, ClaimCenter, and BillingCenter) that can be subscribed to separately or together. These applications are built on and optimized for our Guidewire Cloud Platform (“GWCP”) architecture and leverage our in-house cloud operations team. InsuranceSuite is designed to support multiple releases each year to accelerate delivery of new capabilities and ensure that cloud customers remain on the latest version and gain fast access to our innovation efforts. Additionally, InsuranceSuite embeds digital and analytics capabilities natively into our platform. Most new sales and implementations are for InsuranceSuite. InsuranceNow is a complete, cloud-based application that offers policy administration, claims management, and billing functionality, plus pre-integrated document production, analytics, and other capabilities, that increases agility without adding complexity. Like InsuranceSuite, InsuranceNow is hosted on GWCP and managed by our internal cloud operations team. InsuranceNow is currently only available in the United States, and is generally suited to mid-market carriers and managing general agents whose needs are often not as complex as a typical InsuranceSuite customer. We reach customers directly through our global sales team and in partnership with third-party global system integrators (“SI’s”). Because our platform is central to insurers’ operations, customer evaluation cycles are often extensive, particularly when multiple products are involved or when insurers are moving to GWCP for the first time. Sales processes typically include detailed due diligence and customer reference checks. Our growth depends on continuously enhancing existing products, introducing new capabilities, ensuring efficient cloud operations, expanding local content, and providing access to innovation through the Guidewire Marketplace. We sell our products primarily through subscription services for our platform and cloud-delivered products. We generally price our subscription services for the core products based on the amount of Direct Written Premium (“DWP”) managed on our platform, with certain cloud-delivered products priced based on usage or other metrics. Initial subscription agreements are generally five years in duration, with annual renewals thereafter. In some instances, we have customers that sign contracts with an initial term of seven years or longer. Subscription revenue is recognized ratably over the contract term. We also offer term licenses, primarily for existing on-premise customers, as well as support and professional services. Support is typically priced as a percentage of license fees and recognized ratably, while most professional services are billed monthly on a time-and-materials basis. 47 Table of Contents Over the past few years, we have primarily been entering into cloud-based subscription arrangements with our new and existing customers, and we anticipate that subscription arrangements will continue to be a significant majority of annual new sales going forward. We may decide to change certain contract terms in new arrangements to remain competitive or otherwise meet market demands which may impact the way we recognize revenue and/or ARR. To extend our technology leadership in the global market and to drive operating efficiency, we continue to invest in product development and cloud operations to enhance and improve our current products, introduce new products, and advance our ability to securely and cost-effectively deliver our services in the cloud. Continued investment is critical as we seek to assist our customers in achieving their technology goals, maintain our competitive advantage, grow our revenue, expand internationally, and meet evolving customer demands. In certain cases, we may also acquire skills and technologies to manage our cloud infrastructure and accelerate our time to market for new products, solutions, and upgrades. Our track record of success with customers and their implementations is central to maintaining our strong competitive position. We rely on our global services team and SI partners to ensure that teams with the right combination of product, business, and language skills are used in the most efficient way to meet our customers’ implementation and migration needs. We have extensive relationships with SI, consulting, technology, and other industry partners. Our network of partners has expanded as interest in and adoption of our platform has grown. We encourage our partners to co-market, pursue joint sales initiatives, and drive broader adoption of our technology, helping us grow our business more efficiently and enabling us to focus our resources on continued innovation and further enhancement of our solutions. We work closely with our network of SI partners to facilitate new sales and implementations of our products. Our partnership with leading SI partners allows us to increase efficiency and scale while reducing customer implementation and migration costs. We continue to invest time and resources to increase the number of qualified consultants employed by our SI partners, develop relationships with new partners in existing and new markets, and ensure that all SI partners are qualified to assist with implementing our products. We believe this model will continue to serve us well, and we intend to continue to expand our network of partners and the number of certified consultants with whom we work so we can leverage our SI partners more effectively, especially for future subscription migrations and implementations. We face a number of risks in the execution of our strategy, including, but not limited to, risks related to fluctuations in our results due to factors largely outside of our control, reliance on sales to a relatively small number of large customers and the related substantial negotiating leverage of these customers, lengthy and variable sales and implementation cycles, competing effectively in the global market, growing our business and managing our expanding operations, development and use of AI in an evolving regulatory environment, making long-term pricing commitments based on cost estimates that may change, expanding market adoption of our cloud-based offerings, maintaining customer satisfaction and renewals, and cost-effectively and securely managing the infrastructure of our cloud-based customers. In response to these and other risks we might face, we continue to invest in many areas of our business, including product development, cloud operations, cybersecurity, introduction of new products and/or new features, implementation and migration services, and sales and marketing. Seasonality We have experienced seasonal variations in our license revenue and, to a lesser extent, in our subscription revenue as a result of increased customer orders in our fourth fiscal quarter, which is the quarter ending July 31. We generally see significantly increased orders in our fourth fiscal quarter due to efforts by our sales team to achieve annual incentives. Because we recognize revenue upfront for term licenses compared to over time for subscription services, changes in the mix between term license and subscription services may impact our quarterly results. Additionally, any significant multi-year term license or term license non-renewal could impact quarterly results. Subscription sales now represent the significant majority of total sales and, as a result when compared to term license sales, the revenue we recognize in the initial fiscal year of an order is lower, deferred revenue is higher, and our total reported revenue growth may be adversely affected in the near term due to the ratable nature of these arrangements. Over time, this ratable revenue dynamic will dampen the impact of seasonality on our revenue. Our services revenue is also subject to seasonal fluctuations, though to a lesser degree than our license revenue and subscription revenue. Our services revenue is impacted by the number of billable days in a given fiscal quarter. Our second fiscal quarter, which is the quarter ending January 31, usually has fewer billable days due to the impact of calendar year end holidays in Europe and the United States. Our fourth fiscal quarter usually has fewer billable days due to the impact of vacations taken by our services professionals. Because we pay our services professionals the same amount throughout the year, our gross margins on our services revenue are usually lower in these quarters. This seasonal pattern, however, may be absent in any given year. 48 Table of Contents Global Events Global events have adversely affected and may continue to adversely affect workforces, organizations, economies, and financial markets globally, leading to economic downturns, inflationary pressures, and increased market volatility. For instance, ongoing conflicts such as the war between Russia and Ukraine, continued geopolitical instability in the Middle East, escalating tensions in the South China Sea, inflationary pressures, currency exchange fluctuations, changes in interest rates, changes in trade policies and practices (including the imposition of tariffs), previous bank failures in the United States and Switzerland, and supply chain issues have contributed to global economic and market volatility in recent years. We are unable to accurately predict the full impact that these global events will have on our results of operations, financial condition, liquidity, and cash flows due to numerous uncertainties. Our business and financial results have been and may in the future be impacted due to these disruptions, which may affect our ARR and revenue growth rates, sales cycles, services revenue and margins, operating cash flow and expenses, employee attrition, hiring and onboarding necessary personnel, allowance for collectibility of accounts receivable and unbilled receivables, and the change in fair value of strategic investments. Additionally, inflation levels and political uncertainty are impacting the global economy and have magnified the impact of these disruptions. Our customers may be unable to pay or may request amended payment terms for their outstanding invoices due to the economic impacts from these disruptions, and we may need to increase our accounts receivable allowances. A decrease in orders in a given period could negatively affect our revenue and ARR in future periods, particularly if experienced on a sustained basis, because a substantial proportion of our new software subscription services orders is recognized as revenue over time. Also, the global economic impact of these disruptions could affect our customers’ DWP, which could ultimately impact our revenue as we generally price our products based on the amount of DWP that will be managed by our products. As a result of these developments and the related economic impact to our business, we may be required to record impairment related to our operating lease assets, investments, long-lived assets, intangible assets, or goodwill. We will continue to monitor and evaluate the nature and extent of these global events on our business. Key Business Metrics We use certain key metrics and financial measures not prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) to evaluate and manage our business, including ARR and free cash flow. For a further discussion of how we use key metrics and certain non-GAAP financial measures, see “Non-GAAP Financial Measures” in this Annual Report on Form 10-K. Annual Recurring Revenue (“ARR”) We use ARR to quantify the annualized recurring value outlined in active customer contracts at the end of a reporting period. ARR includes the annualized recurring value of term licenses, subscription agreements, support contracts, and hosting agreements based on customer contractual terms and invoicing activities for the current reporting period, which may not be the same as the timing and amount of revenue recognized. ARR reflects all fee changes due to contract renewals, non-renewals, expansion, cancellations, attrition, or renegotiations at a higher or lower fee arrangement that are effective as of the ARR reporting date. All components of the licensing and other arrangements that are not expected to recur (primarily perpetual licenses and professional services) are excluded from our ARR calculations. In some arrangements with multiple performance obligations, a portion of recurring license and support or subscription contract value is allocated to services revenue for revenue recognition purposes, but does not get allocated for purposes of calculating ARR. This revenue allocation generally only impacts the initial term of the contract. This means that if we increase arrangements with multiple performance obligations that include services at discounted rates, more of the total contract value would be recognized as services revenue, but our reported ARR amount would not be impacted. In fiscal year 2025, the recurring license and support or subscription contract value recognized as services revenue was $9.5 million. If a customer contract contains invoicing amounts that increase over the contract term, then ARR reflects the annualized invoicing amount outlined in the contract for the current reporting period. For example, given a contract with annual invoicing of $1.0 million at the beginning of year one, $2.0 million at the beginning of year two, and $3.0 million at the beginning of year three, and the reporting period is subsequent to year two invoicing and prior to year three invoicing, the reported ARR for that contract would be $2.0 million. As of July 31, 2025, ARR was $1,041 million, or $1,032 million based on currency exchange rates as of July 31, 2024. We measure ARR results on a constant currency basis during the fiscal year and revalue ARR at year end to current currency rates. ARR grew in fiscal year 2025 by 20%, or 19% on a constant currency basis. 49 Table of Contents Free Cash Flow We monitor our free cash flow as a key measure of our overall business performance, which enables us to analyze our financial performance without the effects of certain non-cash items such as depreciation, amortization, and stock-based compensation expenses. Additionally, free cash flow takes into account the impact of changes in deferred revenue, which reflects the receipt of cash payments for products before they are recognized as revenue, and unbilled accounts receivable, which reflects revenue that has been recognized that has yet to be invoiced to our customers. Our net cash provided by (used in) operating activities is significantly impacted by the timing of invoicing and collections of accounts receivable, the timing and amount of annual bonus payments, as well as payroll, commissions, payroll taxes, and other tax payments. Our capital expenditures consist of purchases of property and equipment, primarily computer hardware, software, and leasehold improvements, and capitalized software development costs. For a further discussion of our operating cash flows, see “Liquidity and Capital Resources – Cash Flows.” Fiscal years ended July 31, 2025 2024 (in thousands) Net cash provided by (used in) operating activities $ 300,867  $ 195,748  Purchases of property and equipment (5,741) (6,362) Capitalized software development costs (14,714) (12,165) Free cash flow $ 280,412  $ 177,221  Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP. Accounting policies, methods, and estimates are an integral part of the preparation of our consolidated financial statements in accordance with GAAP and, in part, are based upon management’s current judgments. Those judgments are normally based on knowledge and experience with regard to past and current events and assumptions about future events. Certain accounting policies, methods, and estimates are particularly sensitive because of their significance to our consolidated financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments. While there are a number of significant accounting policies, methods, and estimates affecting our consolidated financial statements, which are described in Note 1 “The Company and Summary of Significant Accounting Policies and Estimates” to our consolidated financial statements included in this Annual Report on Form 10-K, our revenue recognition policies are critical to the periods presented. Revenue Recognition Revenue recognition requires judgment and the use of estimates, especially in identifying and evaluating the various non-standard terms and conditions in our contracts with customers as to their effect on reported revenue. Our revenue is derived from contracts with customers. The majority of our revenue is derived from subscriptions to our cloud services, licensing arrangements for our software, and implementation and other professional services arrangements. We account for revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 is to recognize revenue upon the transfer of services or products to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those services or products. We apply a five-step framework to recognize revenue as described in our Revenue Recognition policy included in Note 1 of our consolidated financial statements included in this Annual Report on Form 10-K. Our customers have significant negotiating power during the sales process, which can and does result in terms and conditions that are different from our standard terms and conditions. When terms and conditions of our customer contracts are not standard, certain negotiated terms may require significant judgment in order to determine the appropriate revenue recognition in accordance with ASC 606. The estimates and assumptions requiring significant judgment under our revenue policy in accordance with ASC 606 are as follows: Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance 50 Table of Contents obligation based on its standalone selling price (“SSP”) in relation to the total fair value of all performance obligations in the arrangement. Some of our performance obligations, such as support, implementation services, and training services, have observable inputs that are used to determine the SSP of those distinct performance obligations. Where SSP is not directly observable, we determine the SSP using information that may include market conditions and other observable inputs. In the circumstances when available information to determine SSP is highly variable or uncertain, such as for our term licenses, we will use the residual method. The majority of our contracts contain multiple performance obligations, such as when licenses are sold with support, implementation services or training services. As customers enter into a subscription agreement to migrate from an existing term license agreement, customers may be under contract for self-managed licenses and support, in addition to subscription services, for a period of time, which may require an allocation of the transaction price to each performance obligation. New and migration subscription agreements also typically include implementation, configuration, and training services, which may require an allocation of the transaction price to each performance obligation. Additionally, contract modifications for products that are distinct but are not priced commensurate with their SSP or are not distinct from the existing contract may affect the initial transaction price or the allocation of the transaction price to the performance obligations in the contract. In such cases, revenue recognized may be adjusted. Recent Accounting Pronouncements See Note 1 “The Company and Summary of Significant Accounting Policies and Estimates” to our consolidated financial statements included in this Annual Report on Form 10-K for a full description of recent accounting pronouncements adopted, including the dates of adoption, and recent accounting pronouncements not yet adopted. 51 Table of Contents Results of Operations The following table sets forth our results of operations for the years presented. The data has been derived from the consolidated financial statements contained in this Annual Report on Form 10-K. The results of operations for any period should not be considered indicative of results for any future period. Fiscal years ended July 31, 2025 As a % of total revenue 2024 As a % of total revenue (in thousands except percentages) Revenue: Subscription and support $ 731,296  61  % $ 549,087  56  % License 251,935  21  250,176  26  Services 219,228  18  181,234  18  Total revenue 1,202,459  100  980,497  100  Cost of revenue: Subscription and support 235,106  20  204,794  21  License 3,624  —  4,536  —  Services 211,676  18  187,806  19  Total cost of revenue 450,406  38  397,136  40  Gross profit: Subscription and support 496,190  41  344,293  35  License 248,311  21  245,640  26  Services 7,552  —  (6,572) (1) Total gross profit 752,053  62  583,361  60  Operating expenses: Research and development 296,160  24  269,381  27  Sales and marketing 230,346  19  199,033  20  General and administrative 184,479  15  167,520  17  Total operating expenses 710,985  58  635,934  64  Income (loss) from operations 41,068  4  (52,573) (4) Interest income 56,625  4  43,478  4  Interest expense (13,211) (1) (6,738) (1) Other income (expense), net (35,087) (3) (11,005) (1) Income (loss) before provision for (benefit from) income taxes 49,395  4  (26,838) (2) Provision for (benefit from) income taxes (20,409) (2) (20,735) (2) Net income (loss) $ 69,804  6  % $ (6,103) —  % Comparison of the Fiscal Years Ended July 31, 2025 and 2024 Revenue We derive our revenue primarily from delivering cloud-based services, licensing our software applications, providing support, and delivering professional services. Subscription and Support The majority of our revenue consists of fees for our subscription services, which are generally priced based on the amount of DWP that is managed by our subscription services. Subscription revenue is recognized ratably over the term of the arrangement, beginning at the point in time our provisioning process has been completed and access has been made available to the customer. The initial term of such arrangements is generally five years, though in some instances customers have entered into contracts with an initial term of seven years or longer. Subscription agreements contain optional annual renewals commencing upon the expiration of the initial contract term. A majority of our subscription customers are billed annually in advance. In some arrangements with multiple 52 Table of Contents performance obligations, a portion of recurring subscription contract value may be allocated to license revenue or services revenue for revenue recognition purposes. For example, in arrangements with multiple performance obligations that include services at discounted rates, a portion of the total contract value related to subscription services will be allocated and recognized as services revenue. Additionally, agreements to migrate an existing term license customer to subscription services contain multiple performance obligations, including a provision to continue using the term license during the subscription service implementation period. Under these migration agreements, a portion of the total contract value related to subscription services could be allocated and recognized as term license and support revenue in the period renewed or delivered. Our support revenue is generally recognized ratably over the committed support term of the licensed software. Our support fees are typically priced as a fixed percentage of the associated term license fees. We generally invoice support annually in advance. Support related to subscription arrangements is included in subscription revenue, as support is not quoted or priced separately from the subscription services. License The majority of our license revenue consists of term license fees. Our term license revenue is primarily generated through license fees that are billed annually in advance during the term of the contract, including any renewals. Our term license fees are generally priced based on the amount of DWP that will be managed by our licensed software. Our term licenses are sold under an initial term with optional annual renewals after the initial term. Term license revenue for the committed term of the customer agreement is generally fully recognized upon delivery of the software or at the beginning of the renewal term. We do enter into license arrangements that have an initial term of two or more years and renewal terms of more than one year which results in significantly higher revenue in the initial year of the committed term than arrangements for our subscription services. Services Our services revenue is primarily derived from implementation and migration services performed for our customers, reimbursable travel expenses, and training fees. A majority of our services engagements are billed and revenue is recognized on a time and materials basis upon providing our services. Fiscal years ended July 31, 2025 2024  Change As a % of total As a % of total Amount revenue Amount revenue ($) (%) (in thousands, except percentages) Revenue: Subscription and support: Subscription $ 667,436  56  % $ 477,460  49  % $ 189,976  40  % Support 63,860  5  71,627  7  (7,767) (11) License: Term license 251,817  21  248,849  26  2,968  1  Perpetual license 118  —  1,327  —  (1,209) (91) Services 219,228  18  181,234  18  37,994  21  Total revenue $ 1,202,459  100  % $ 980,497  100  % $ 221,962  23  % Subscription and Support We anticipate subscriptions will continue to represent a significant majority of new arrangements, including customers migrating from existing term license arrangements to subscription services, in future periods. Due to the ratable recognition of subscription revenue, growth in subscription revenue will lag behind the growth of subscription orders and will impact the comparative growth of our reported revenue on a year-over-year basis. If we complete a higher percentage of subscription arrangements towards the end of a given period, our short-term growth rates will be negatively impacted. Due to the seasonal nature of our business, the impact of new subscription orders in our fourth fiscal quarter, our historically largest quarter for new orders, is not fully reflected in revenue until the following fiscal year. Subscription revenue increased by $190.0 million compared to the prior year primarily due to the impact of new subscription agreements and cloud transition agreements entered into and provisioned since July 31, 2024 of $154.0 million, and the renewal or extension of subscription services at the fully ramped annual fees after the initial committed term of $28.2 million. 53 Table of Contents Support revenue decreased by $7.8 million compared to the prior year, primarily due to customers migrating from on-premise term licenses to subscription services. Support related to subscription arrangements is included in subscription revenue, as support is not quoted or priced separately from the subscription services. As customers enter into a subscription agreement to migrate from an existing term license agreement, the timing and amount of revenue recognized will be impacted by allocations of the total contract value between the license, subscription, and support performance obligations. As a result, we expect the increase in subscription orders as a percentage of total new sales and customers migrating from term licenses to subscription services will result in lower support revenue in the future. License Revenue related to new term licenses and multi-year term license renewals is generally recognized upfront and, as a result, no additional license revenue is recognized until after the committed term expires. As a customer enters into a subscription agreement to migrate from an existing term license agreement, the timing and amount of revenue recognition will be impacted by allocations of total contract value between license, subscription, and support performance obligations. License revenue growth has and will be negatively impacted as subscription sales increase as a percentage of total new sales and as customers migrate from term licenses to subscription services instead of renewing their term licenses. Term license revenue increased by $3.0 million compared to the prior year primarily due to higher renewals and expansion orders within our existing customer base, partially offset by the impact of customers that migrated from a term license to a subscription service. Ongoing revenue related to migration agreements is recorded as subscription revenue. The impact on term license revenue from contracts with an initial term of greater than two years or a renewal term of greater than one year was $0.5 million during fiscal year 2025, as compared to $2.7 million in the prior year. Services Services revenue increased by $38.0 million compared to the prior year primarily due to improved operational focus that resulted in higher utilization of services employees and more new subscription implementation and migration projects than projects that were completed over the past year. As we successfully leverage our SI partners to lead more implementations and migrations, we expect our services revenue could fluctuate between periods. Additionally, services revenue overall may continue to be impacted by contracts with lower average services billing rates and investments in customer implementations, including fixed fee or capped arrangements, to accelerate customer transition to the cloud. In these arrangements when a project extends longer than originally anticipated, the average billing rate we recognize may decrease, which can result in revenue adjustments and lower gross profit. As we continue to expand into new markets and develop new products, we have, and may continue to, enter into contracts with lower average billing rates, make investments in customer implementation and migration engagements, and enter into fixed price contracts. Cost of Revenue and Gross Profit Our cost of subscription and support revenue primarily consists of personnel costs for our cloud operations and technical support teams, cloud infrastructure costs, development of online training curriculum, amortization of intangible assets, and royalty fees paid to third parties. Our cost of license revenue primarily consists of development of online training curriculum, royalty fees paid to third parties, and amortization of intangible assets. Our cost of services revenue primarily consists of personnel costs for our professional service employees, third-party subcontractors or consultants, and travel costs. In instances where we have primary responsibility for the delivery of services, subcontractor fees are expensed as cost of services revenue. In each case, personnel costs include salaries, bonuses, benefits, and stock-based compensation. We allocate overhead such as information technology infrastructure and software expenses, information security infrastructure and software expenses, and facilities expenses to all functional departments based on headcount. As such, these general overhead expenses are reflected in cost of revenue and each functional operating expense. 54 Table of Contents Cost of Revenue: Fiscal years ended July 31, 2025 2024 Change Amount As a % of total revenue Amount As a % of total revenue ($) (%) (In thousands, except percentages) Cost of revenue: Subscription and support $ 235,106  20  % $ 204,794  21  % $ 30,312  15  % License 3,624  —  4,536  —  (912) (20) Services 211,676  18  187,806  19  23,870  13  Total cost of revenue $ 450,406  38  % $ 397,136  40  % $ 53,270  13  % Includes stock-based compensation of: Cost of subscription and support revenue $ 13,953  $ 13,425  $ 528  Cost of license revenue 136  186  (50) Cost of services revenue 20,759  19,013  1,746  Total $ 34,848  $ 32,624  $ 2,224  The $30.3 million increase in cost of subscription and support revenue was primarily due to increases in cloud infrastructure costs of $26.6 million from increased transaction volume on our cloud services, personnel costs of $4.5 million as a result of higher compensation related to bonus and other benefits, internal-use software amortization of $1.2 million, royalties of $0.6 million due to higher usage, and amortization of intangibles of $0.3 million due to newly acquired intangible assets being amortized. These increases were partially offset by a decrease in professional services expense of $2.9 million. Cloud infrastructure expense continues to benefit from the efficiencies that we are achieving from our development efforts associated with our GWCP platform and the five-year agreement we entered into with a cloud infrastructure services provider. As a result of efficiencies that we are seeing from our previous investments in cloud operations and development efforts, we continue to critically evaluate headcount additions, professional services contracts and third-party software costs, along with other investment opportunities. However, we expect cost of subscription and support revenue to increase in absolute dollars due to the increased number of customers utilizing our cloud services, the volume of transactions by our cloud customers, and the impact of inflation and other macroeconomic events. The $0.9 million decrease in our cost of license revenue was primarily due to a $0.6 million decrease in personnel costs associated with the development of online training curriculum included with the latest releases of InsuranceSuite and lower royalties of $0.3 million. We continue to anticipate lower cost of license revenue over time as our term license customers transition to cloud subscription agreements. The $23.9 million increase in cost of services revenue was primarily due to increases in personnel expense of $13.5 million, subcontractor expense of $9.3 million due to implementations involving our SI partners, professional services expense of $0.6 million, and software subscriptions and travel expenses of $0.5 million. We had 606 cloud operations and technical support employees and 873 professional service employees as of July 31, 2025 compared to 613 cloud operations and technical support employees and 750 professional services employees as of July 31, 2024. 55 Table of Contents Gross Profit Fiscal years ended July 31, 2025 2024 Change Amount Margin % Amount Margin % ($) (%) (In thousands, except percentages) Gross profit: Subscription and support $ 496,190  68  % $ 344,293  63  % $ 151,897  44  % License 248,311  99  245,640  98  2,671  1  Services 7,552  3  (6,572) (4) 14,124  (215) Total gross profit $ 752,053  63  % $ 583,361  59  % $ 168,692  29  % Our gross profit increased by $168.7 million compared to the prior year. Gross profit was impacted by an increase in subscription and support gross profit due to the increase in subscription revenue and cloud operations efficiencies. License gross profit slightly increased primarily as a result of customer renewals and lower costs associated with development of online training curriculum. Services gross margin increased due to increased revenue from new implementation and migration projects, higher utilization rates and the completion of certain implementation projects that required significant investment by us. Our gross margin increased to 63% in fiscal year 2025, as compared to 59% in fiscal year 2024. Gross margin was primarily impacted by the increase in subscription and support revenue at a higher margin due to cloud operations efficiencies and higher services margin after the completion of certain implementation projects that required significant investment by us and higher utilization rates. We expect subscription and support gross margin to continue to improve, though at a slower rate than in recent years, as we gain additional efficiencies and increase the number of cloud customers. We expect services gross margin will continue to improve as we enter into fewer fixed fee arrangements, but could fluctuate between periods based on the use of subcontractors to supplement our internal services team. We expect license gross profit to decline due to customers migrating from licenses to subscription services. Overall, we expect gross margins to continue to improve over time as improvements in subscription and support gross margin and services gross margin will more than offset the negative impact of revenue shifts away from high margin license revenue. 56 Table of Contents Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. The largest components of our operating expenses are personnel costs for our employees and, to a lesser extent, professional services. In each case, personnel costs include salaries, bonuses, commissions, benefits, and stock-based compensation. We allocate overhead such as information technology infrastructure and software expenses, information security infrastructure and software expenses, and facilities expenses to all functional departments based on headcount. As such, these general overhead expenses are reflected in cost of revenue and each functional operating expense. Fiscal years ended July 31, 2025 2024  Change As a% of total As a % of total Amount revenue Amount revenue ($) (%) (In thousands, except percentages) Operating expenses: Research and development $ 296,160  25  % $ 269,381  27  % $ 26,779  10  % Sales and marketing 230,346  19  199,033  20  31,313  16  General and administrative 184,479  15  167,520  17  16,959  10  Total operating expenses $ 710,985  59  % $ 635,934  64  % $ 75,051  12  % Includes stock-based compensation of: Research and development $ 41,760  $ 40,213  $ 1,547  Sales and marketing 43,270  34,590  8,680  General and administrative 41,678  39,033  2,645  Total $ 126,708  $ 113,836  $ 12,872  Research and Development Our research and development expenses primarily consist of personnel costs for our technical staff and consultants providing professional services. The $26.8 million increase in research and development expenses was primarily due to increases in personnel costs of $23.3 million due to higher headcount, professional services of $1.0 million, web hosting costs of $1.0 million, software subscription costs of $0.9 million, and travel costs of $0.6 million. Our research and development headcount was 1,273 as of July 31, 2025, as compared to 1,169 as of July 31, 2024. We expect our research and development expenses to increase in absolute dollars due to inflation and investments to enhance and develop our products and services, but decrease as a percentage of revenue after our recent period of significant investment in cloud platform capabilities as overall hiring slows, and we focus on hiring in lower cost regions. We continue to dedicate internal resources to develop, improve, and expand the functionality, efficiency, and security of our solutions in the cloud. Research and development expenses may also increase if we pursue additional acquisitions. Sales and Marketing Our sales and marketing expenses primarily consist of personnel costs for our sales and marketing employees. Included in our personnel costs are commissions, which are considered contract acquisition costs and are capitalized when earned and expensed over the anticipated period of time that goods and services are expected to be provided to a customer, which we estimate to be approximately five years. Sales and marketing expenses also include travel expenses, professional services for marketing activities, and amortization of certain acquired intangibles. The $31.3 million increase in sales and marketing expenses was primarily due to increases in personnel costs, including higher contract acquisition costs and stock-based compensation, of $24.1 million, travel costs of $3.2 million, web hosting expenses of $2.6 57 Table of Contents million, marketing and advertising expenses of $0.6 million, software subscriptions of $0.6 million, and professional services costs of $0.5 million. These increases were partially offset by a decrease in amortization of intangibles of $0.3 million. Our sales and marketing headcount was 533 as of July 31, 2025, as compared to 477 as of July 31, 2024. We expect our sales and marketing expenses to continue to increase in absolute dollars due to inflation and investments to support ongoing growth, but decrease as a percentage of revenue as overall hiring slows after our recent period of investment to build out our customer success team and add analytics and cloud sales capabilities. General and Administrative Our general and administrative expenses include executive, finance, human resources, information technology, information security, legal, and corporate development and strategy functions, and primarily consist of personnel costs and, to a lesser extent, professional services, software costs, and cloud hosting costs. The $17.0 million increase in our general and administrative expenses was primarily due to increases in professional services expenses of $6.2 million, net of capitalized implementation costs, due to ongoing projects to upgrade our technology infrastructure, personnel costs of $5.6 million, travel costs of $3.4 million, bad debt expense of $1.0 million, software subscription costs of $0.5 million, and web hosting costs of $0.3 million. Our general and administrative headcount was 487 as of July 31, 2025, as compared to 460 as of July 31, 2024. General and administrative headcount includes facilities personnel whose expenses are allocated across all functional departments. We expect that our general and administrative expenses will increase in absolute dollars due to inflation and investments required to support our strategic initiatives, grow our business, and meet our product and information security, compliance and reporting obligations, but decrease as a percentage of revenue as overall hiring and investments slow. Other Income (Expense) Fiscal years ended July 31, 2025 2024 Change Amount Amount ($) (%) (In thousands, except percentages) Interest income $ 56,625  $ 43,478  $ 13,147  30  % Interest expense $ (13,211) $ (6,738) $ (6,473) 96  % Other income (expense), net $ (35,087) $ (11,005) $ (24,082) 219  % Interest Income Interest income represents interest earned on our cash, cash equivalents, and investments. Interest income increased by $13.1 million in fiscal year 2025, primarily due to increased funds available for investment due to our October 2024 debt offering and positive operating cash flow. 58 Table of Contents Interest Expense Interest expense includes both stated interest and the amortization of debt issuance costs associated with the outstanding amount due on the aggregate principal amount of our 1.25% Convertible Senior Notes due 2025 (“2025 Convertible Senior Notes”) and the aggregate principal amount of our 1.25% Convertible Senior Notes due 2029 (the “2029 Convertible Senior Notes,” together with the 2025 Convertible Senior Notes, the “Convertible Senior Notes”). The amortization of debt issuance cost is recognized on an effective interest basis. Our 2025 Convertible Senior Notes were partially retired in October and December 2024, and were fully settled on their maturity date of March 15, 2025. Beginning in fiscal year 2025, interest expense also includes the commitment fees on our undrawn 2025 Credit Facility and the amortization of the associated issuance costs. Interest expense for the fiscal year ended July 31, 2025 consists of stated interest of $9.0 million, non-cash interest expense of $3.8 million, and $0.4 million of commitment fees and amortization of the associated issuance costs on our undrawn 2025 Credit Facility. Interest expense for the fiscal year ended July 31, 2024 consists of stated interest of $5.0 million and non-cash interest expense of $1.7 million. Other Income (Expense), Net Other income (expense), net includes foreign exchange gains and losses resulting from fluctuations in foreign exchange rates on monetary asset and monetary liability balances that are denominated in currencies other than the functional currency of the entity in which they are recorded. Our monetary assets and liabilities denominated in currencies other than the functional currency of the entity in which they are recorded consist primarily of trade accounts receivable, unbilled accounts receivable, trade accounts payable, and intercompany receivables and payables. We have significant transactions in the following currencies: Australian Dollar, British Pound, Canadian Dollar, Euro, Indian Rupee, Japanese Yen, New Zealand Dollar, Polish Zloty, and Swiss Franc. Other income (expense) also includes changes in the fair value of our strategic investments and expenses related to the retirement of a portion of our 2025 Convertible Senior Notes. Other income (expense), net in fiscal year 2025 consists of a debt retirement loss associated with the 2025 Convertible Senior Notes of $53.6 million and a $2.1 million decrease in the fair value of our strategic investments, partially offset by a $16.7 million gain primarily from foreign currency fluctuations and a $3.7 million gain on the sale of one of our strategic investments. During the second quarter of fiscal year 2025, one of our strategic investments was acquired. As a result, we received $5.7 million in consideration for our equity interest in the investee, composed of $3.4 million in cash and $2.3 million of an ownership interest in the acquirer, and recognized a $3.7 million gain in excess of cost. Other income (expense), net in fiscal year 2024 consists of a $10.8 million loss primarily from foreign currency fluctuations and a $2.0 million decrease in the fair value of our strategic investments, offset by $1.8 million of other income primarily from the gain on the sale of one of our strategic investments. During the fiscal year ended July 31, 2024, one of our investees was acquired by a privately held limited partnership. As a result, we received $12.1 million in consideration for our equity interest in the investee, composed of $6.5 million cash and $5.6 million of an ownership interest in the privately held limited partnership, and recognized a $1.8 million gain in excess of cost. Provision for (benefit from) Income Taxes We are subject to taxes in the United States as well as other tax jurisdictions and countries in which we conduct business. Earnings from our non-U.S. activities are subject to local country income tax and may also be subject to U.S. income tax. Fiscal years ended July 31, 2025 2024 Change Amount Amount ($) (%) (In thousands, except percentages) Provision for (benefit from) income taxes $ (20,409) $ (20,735) $ 326  (2) % Effective tax rate (41) % 77  % We recognized an income tax benefit of $20.4 million for fiscal year 2025 compared to $20.7 million for fiscal year 2024. Our fiscal year 2025 income tax benefit was similar to our fiscal year 2024 income tax benefit even though we generated more pre-tax income due to an increase in deductions from stock-based compensation, the foreign derived intangible income deduction, change in valuation allowance, and an increase in research and development tax credits, partially offset by non-deductible debt retirement expense and non-deductible executive compensation. 59 Table of Contents The effective tax rate differs from the statutory U.S. Federal income tax rate of 21% primarily due to the debt retirement expense which is non-deductible for tax purposes and other permanent differences related to stock-based compensation including excess tax benefits, research and development credits, foreign earnings taxed in the U.S., the foreign derived intangible income deduction, and certain non-deductible expenses, including, but not limited to, executive compensation limitation. In the United States, on July 4, 2025, H.R. 1 was signed into law. Among other provisions, the legislation reinstates immediate expensing for domestic research and experimental expenditures, extends 100% bonus depreciation for qualified property placed in service beginning January 20, 2025, and makes certain other provisions of the Tax Cuts and Jobs Act permanent. We are evaluating the impact of the provisions of this legislation that are effective subsequent to fiscal year 2025 and will reflect its impact on our financial statements in the periods in which they are effective. The Organization for Economic Co-operation and Development has implemented a framework for a global minimum corporate tax of 15% applied on a country-by-country basis for companies with global revenues and profits above certain thresholds (referred to as Pillar 2). Pillar 2 provisions did not have a material impact on our financial statements for any of the years presented. Comparison of the Fiscal Years Ended July 31, 2024 and 2023 Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our 10-K for the fiscal year ended July 31, 2024, filed on September 16, 2024, for the discussion of the comparison of the fiscal year ended July 31, 2024 to the fiscal year ended July 31, 2023, the earliest of the three fiscal years presented in the consolidated financial statements. 60 Table of Contents Non-GAAP Financial Measures In addition to the key business metrics presented above, we believe that the following non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. Management uses these non-GAAP measures to compare our 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. We believe 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 our financial results with other software companies because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, many of which present similar non-GAAP financial measures to investors. However, our management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP measures used by other companies. 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 our 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. We urge investors to review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included herein and not to rely on any single financial measure to evaluate our business. The following table reconciles the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below (in thousands, except share and per share data): Fiscal years ended July 31, 2025 2024 Gross profit reconciliation: GAAP gross profit $ 752,053  $ 583,361  Non-GAAP adjustments: Stock-based compensation 34,848  32,624  Amortization of intangibles 2,255  1,940  Non-GAAP gross profit $ 789,156  $ 617,925  Income (loss) from operations reconciliation: GAAP income (loss) from operations $ 41,068  $ (52,573) Non-GAAP adjustments: Stock-based compensation 161,556  146,460  Amortization of intangibles 5,444  5,468  Acquisition consideration holdback 177  143  Non-GAAP income (loss) from operations $ 208,245  $ 99,498  Net income (loss) reconciliation: GAAP net income (loss) $ 69,804  $ (6,103) Non-GAAP adjustments: Stock-based compensation 161,556  146,460  Amortization of intangibles 5,444  5,468  Acquisition consideration holdback 177  143  Amortization of debt issuance costs 3,758  1,732  Changes in fair value of strategic investment 2,130  1,957  Gain on sale of strategic investment (3,671) (1,803) Retirement of debt(1) 53,565  —  Tax impact of non-GAAP adjustments (64,888) (33,333) Non-GAAP net income (loss) $ 227,875  $ 114,521  Tax provision (benefit) reconciliation: GAAP tax provision (benefit) $ (20,409) $ (20,735) Non-GAAP adjustments: Stock-based compensation 25,414  13,930  61 Table of Contents Amortization of intangibles 858  520  Acquisition consideration holdback 31  25  Amortization of debt issuance costs 591  165  Changes in fair value of strategic investment 365  208  Gain on sale of strategic investment (463) (196) Retirement of debt(1) 6,756  —  Tax impact of non-GAAP adjustments 31,336  18,681  Non-GAAP tax provision (benefit) $ 44,479  $ 12,598  Net income (loss) per share reconciliation: GAAP net income (loss) per share – diluted $ 0.81  $ (0.07) Non-GAAP adjustments: Stock-based compensation 1.89  1.78  Amortization of intangibles 0.06  0.07  Acquisition consideration holdback —  (0.01) Amortization of debt issuance costs 0.04  0.02  Changes in fair value of strategic investment 0.02  0.02  Gain on sale of strategic investment (0.04) (0.02) Retirement of debt(1) 0.63  —  Tax impact of non-GAAP adjustments (0.76) (0.41) Interest expense on convertible debt —  0.05  Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation —  (0.08) Non-GAAP net income (loss) per share – diluted $ 2.65  $ 1.35  Shares used in computing Non-GAAP net income (loss) per share amounts: GAAP weighted average shares – diluted 85,911,653  82,291,483  Non-GAAP dilutive shares excluded from GAAP net income (loss) per share calculation —  5,072,080  Pro forma weighted average shares – diluted 85,911,653  87,363,563  (1) During the fiscal year ended July 31, 2025, we recorded a $53.6 million loss on retirement of debt in other income (expense) comprised of a $53.3 million loss on extinguishment of a portion of the 2025 Convertible Senior Notes and a $0.3 million loss on the induced conversion of a portion of the 2025 Convertible Senior Notes. Prior to fiscal year 2025, there were no transactions similar to the retirement of debt in any periods presented in the consolidated statements of operations. Liquidity and Capital Resources Our principal sources of liquidity are as follows (in thousands): July 31, 2025 July 31, 2024 Cash, cash equivalents, and investments $ 1,483,197  $ 1,129,453  Working capital $ 962,613  $ 457,899  Cash, Cash Equivalents, and Investments Our cash and cash equivalents are comprised of cash and liquid investments with remaining maturities of 90 days or less from the date of purchase, primarily commercial paper and money market funds. Our investments primarily consist of corporate debt securities, U.S. government and agency debt securities, commercial paper, asset-backed securities, and non-U.S. government securities, which include state, municipal, and foreign government securities. As of July 31, 2025, approximately $90.3 million of our cash and cash equivalents were domiciled in foreign jurisdictions. We may repatriate foreign earnings to the United States in the future to the extent that the repatriation is not restricted by local laws or there are no substantial incremental costs associated with such repatriation. 62 Table of Contents Working Capital Our working capital increased to $962.6 million as of July 31, 2025 compared to $457.9 million as of July 31, 2024, primarily due to proceeds received from the issuance of the 2029 Convertible Senior Notes in October 2024 and operating cash flow, partially offset by settlement of the 2025 Convertible Senior Notes and the purchase of capped calls related to the 2029 Convertible Senior Notes. We are required to, and have the ability to, settle the principal of the 2029 Convertible Senior Notes in cash and any conversion premium in cash, equity, or a combination of both. Revolving Credit Facility In December 2024, we entered into a revolving credit agreement (the “Credit Agreement”), which provides for a senior secured revolving credit facility in an aggregate principal amount of $300.0 million (the “2025 Credit Facility”). At our discretion, it allows flexibility for an uncommitted upsize of the aggregate principal amount of the 2025 Credit Facility or the establishment of incremental term loan facilities, in each case, as further set forth in the Credit Agreement. As of July 31, 2025, there were no outstanding borrowings under the 2025 Credit Facility and we were in compliance with related covenants. Share Repurchase Program In September 2022, our board of directors authorized and approved a share repurchase program of up to $400.0 million of our outstanding common stock. During fiscal years 2024 and 2025, we did not repurchase any shares of our common stock due to the market price of our shares. As of July 31, 2025, $138.2 million remained available for future share repurchases subject to our compliance with the terms of the Credit Agreement. Cash Flows Our cash flows from operations are significantly impacted by the timing of invoicing and collections of accounts receivable, annual bonus payments, as well as payments of payroll, commissions, payroll taxes, and other taxes. We expect that we will generate positive cash flows from operations on an annual basis in the future, although this may fluctuate significantly on a quarterly basis. In particular, we typically use more cash during our first fiscal quarter, which is the quarter ending October 31, as we generally pay cash bonuses to our employees for the prior fiscal year and seasonally higher sales commissions from increased customer orders booked in our fourth fiscal quarter of the prior year. We typically generate a significant portion of our annual operating cash flow in our fourth fiscal quarter, which is the quarter ending July 31, due to the significant number of customer agreements with annual billings in that quarter. Additionally, our capital expenditures may fluctuate depending on future office build outs and software development activities subject to capitalization. We believe that our existing cash and cash equivalents and other sources of liquidity will be sufficient to fund our operations for at least the next 12 months. Our future cash requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of our spending to support our research and development and cloud operations efforts, investments in cloud infrastructure, cybersecurity, and operating costs, and expansion into other markets. We also may invest in or acquire complementary businesses, applications or technologies, or may execute on a board-authorized share repurchase program, which may require the use of significant cash resources and/or additional financing. The following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included elsewhere in this Annual Report on Form 10-K (in thousands): Fiscal years ended July 31, 2025 2024 Net cash provided by (used in) operating activities $ 300,867  $ 195,748  Net cash provided by (used in) investing activities $ (236,965) $ (52,359) Net cash provided by (used in) financing activities $ 82,293  $ 1,055  Cash Flows from Operating Activities Net cash provided by operating activities increased by $105.1 million in fiscal year 2025 as compared to fiscal year 2024. The increase in cash provided by operating activities was primarily attributable to a $146.5 million increase in net income after excluding the impact of non-cash charges such as deferred taxes, stock-based compensation expense, depreciation and amortization expense, loss on retirement of debt, and other non-cash items, offset by an increase of $41.4 million of cash used in working capital activities. 63 Table of Contents Cash Flows from Investing Activities Net cash used in investing activities increased by $184.6 million in fiscal year 2025 as compared to fiscal year 2024. The increase in cash used in investing activities was primarily due to higher net purchases of available-for-sale securities transactions of $154.5 million, $26.9 million cash paid as purchase consideration for the acquisition of Quantee, higher capital expenditures and capitalized software development costs of $1.9 million, a decrease of $0.9 million in proceeds from the sale of strategic investments, and an increase of $0.4 million of acquisition of new strategic investments. Cash Flows from Financing Activities Net cash provided by financing activities increased by $81.2 million in fiscal year 2025 as compared to fiscal year 2024. The increase in cash provided by financing activities was primarily because of $671.8 million cash received, net of paid issuance costs, from the issuance of the 2029 Convertible Senior Notes and an increase of $2.9 million cash received from the issuance of common stock upon exercise of stock options, partially offset by $353.5 million used to retire $220.9 million aggregate principal amount of the 2025 Convertible Senior Notes, $179.1 million used to settle the outstanding principal of the 2025 Convertible Senior Notes at maturity, $58.8 million used to purchase capped calls related to the 2029 Convertible Senior Notes, and $2.1 million used to establish our revolving credit facility. Commitments and Contractual Obligations Our estimated future obligations consist of leases, royalties, purchase obligations, debt, and taxes as of July 31, 2025. Refer to Note 8 ‘’Leases,’’ Note 9 “Commitments and Contingencies” and Note 11 “Income Taxes” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. During the year ended July 31, 2025, we retired $220.9 million aggregate principal amount of the 2025 Convertible Senior Notes in cash for $354.0 million, which included related accrued interest of $0.5 million, and issued $690.0 million aggregate principal amount of the 2029 Convertible Senior Notes. In March 2025, we fully settled at maturity the outstanding $179.1 million aggregate principal amount of the 2025 Convertible Senior Notes through aggregate cash payments totaling $180.2 million, which included related accrued interest of $1.1 million. See Note 7 “Debt.” Off-Balance Sheet Arrangements Through July 31, 2025, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.