Guidewire Software Inc (GWRE)
Operating return on assets (Operating ROA)
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 41,068 | -52,573 | -149,490 | -199,447 | -105,584 |
| Total assets | US$ in thousands | 2,721,100 | 2,226,290 | 2,027,890 | 2,266,900 | 2,321,840 |
| Operating ROA | 1.51% | -2.36% | -7.37% | -8.80% | -4.55% |
July 31, 2025 calculation
Operating ROA = Operating income ÷ Total assets
= $41,068K ÷ $2,721,100K
= 1.51%
The analysis of Guidewire Software Inc's operating return on assets (operating ROA) over the period from July 31, 2021, to July 31, 2025, reveals a significant trend towards improvement in operational efficiency relative to the company's asset base.
In the fiscal year ending July 31, 2021, the operating ROA stood at -4.55%, indicating that the company's core operations were less than fully efficient in generating profit from its assets, resulting in a loss attributable to operational activities. During the following year, this metric deteriorated further to -8.80%, suggesting increased operational challenges or costs relative to the assets employed.
However, from fiscal year 2022 to 2023, there was a notable improvement. The operating ROA increased from -8.80% to -7.37%, reflecting a reduction in operational losses and signs of operational stabilization or incremental gains in efficiency. This positive direction continued into fiscal year 2024, when the negative ROA decreased further to -2.36%, bringing the company closer to breakeven from an asset utilization perspective.
Most significantly, by the fiscal year ending July 31, 2025, the operating ROA shifted to a positive figure of 1.51%. This transition into positive territory indicates that the company's core operations are beginning to generate returns exceeding the costs associated with its asset base, signaling a potential phase of operational profitability.
Overall, the trend suggests a meaningful trajectory towards operational profitability and improved asset utilization over the analyzed period. The progression from negative to positive operating ROA highlights the company's ongoing efforts to enhance operational efficiency, reduce losses, and potentially establish a foundation for sustained profitability in future periods.