Guidewire Software, Inc. (GWRE) has reported 335.27 percent jump in profit for the quarter ended Jan. 31, 2017. The company has earned $3.97 million, or $0.05 a share in the quarter, compared with $0.91 million, or $0.01 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $20.63 million, or $0.28 a share compared with $17.84 million or $0.24 a share, a year ago.

Revenue during the quarter grew 13.21 percent to $115.62 million from $102.13 million in the previous year period. Gross margin for the quarter contracted 112 basis points over the previous year period to 64.70 percent. Total expenses were 92.90 percent of quarterly revenues, up from 92.46 percent for the same period last year. That has resulted in a contraction of 44 basis points in operating margin to 7.10 percent.

Operating income for the quarter was $8.20 million, compared with $7.70 million in the previous year period.

However, the adjusted operating income for the quarter stood at $28.45 million compared to $24.61 million in the prior year period. At the same time, adjusted operating margin improved 51 basis points in the quarter to 24.60 percent from 24.09 percent in the last year period.

"Revenue and profitability exceeded our guidance for the second quarter," said Marcus Ryu, chief executive officer, Guidewire Software. "Customer demand was healthy this quarter and our performance further benefited from a few license wins closing earlier than anticipated."

For the third-quarter, Guidewire Software forecasts revenue to be in the range of $102 million to $106 million. The company forecasts operating loss to be in the range of $28.10 million to $24.10 million. The company forecasts adjusted operating loss to be in the range of $6 million to $2 million. The company projects net loss to be in the range of $22.80 million to $19.60 million. Guidewire Software expects adjusted net loss to be in the range of $3.70 million to $1.20 million. The company expects diluted loss per share to be in the range of $0.31 to $0.26. On an adjusted basis, the company expects diluted loss per share to be in the range of $0.05 to $0.02.

For financial year 2017, Guidewire Software forecasts revenue to be in the range of $491 million to $499 million. The company forecasts operating loss to be in the range of $14.60 million to $6.60 million. The company forecasts adjusted operating income to be in the range of $70 million to $78 million. The company projects net loss to be in the range of $9 million to $3.10 million. The company expects adjusted net income to be in the range of $50.10 million to $55.60 million. The company expects diluted loss per share to be in the range of $0.12 to $0.04. The company expects diluted earnings per share to be in the range of $0.67 to $0.74 on adjusted basis.

The company has spent $29.09 million cash to meet investing activities during the first six months as against cash outgo of $24.35 million in the last year period.

Cash flow from financing activities was $2.03 million for the first six months, down 33.68 percent or $1.03 million, when compared with the last year period.

Cash and cash equivalents stood at $225.36 million as on Jan. 31, 2017, up 3.89 percent or $8.44 million from $216.92 million on Jan. 31, 2016.

Working capital decreases marginally
Guidewire Software, Inc. has witnessed a decline in the working capital over the last year. It stood at $542.72 million as at Jan. 31, 2017, down 4.68 percent or $26.64 million from $569.37 million on Jan. 31, 2016. Current ratio was at 5.22 as on Jan. 31, 2017, down from 7.03 on Jan. 31, 2016.

Days sales outstanding went down to 47 days for the quarter compared with 51 days for the same period last year.

At the same time, days payable outstanding went down to 16 days for the quarter from 17 for the same period last year.