Guidewire fiscal 1Q profit slumps as costs rise
Insurance industry software provider Guidewire Software Inc. said Tuesday that net income fell in its fiscal first quarter as it invested more money in its business and its stock-based compensation costs increased.
Revenue rose 21 percent during the quarter ended Oct. 31, but profitability declined as investments increased and compensation costs nearly tripled to $9.8 million.
Net income sank to $447,000, or a penny per share, from $4.8 million, or 9 cents per share. Excluding one-time items, earnings fell to 11 cents per share from 15 cents per share. Revenue rose to $63.3 million from $52.4 million.
Analysts expected break-even on a per share basis with $60.6 million in revenue, according to FactSet.
Guidewire's license revenue was unchanged at $20.8 million. Service revenue rose 35 percent to $33.1 million and maintenance revenue climbed to $9.4 million from $7.1 million.
Guidewire shares lost 24 cents to close at $29.46. They dropped $3.56, or 12.1 percent, to $25.90 in after-hours trading.