Guidewire Software Inc (GWRE)
Profitability ratios
Return on sales
| Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 62.54% | 62.13% | 61.43% | 60.76% | 59.50% | 58.46% | 55.88% | 54.32% | 50.61% | 46.64% | 45.45% | 44.43% | 45.58% | 48.13% | 48.67% | 48.39% | 49.54% | 52.11% | 53.21% | 53.90% |
| Operating profit margin | 3.42% | 1.92% | 0.06% | -2.27% | -5.36% | -5.92% | -10.58% | -11.85% | -16.51% | -21.34% | -22.11% | -24.78% | -24.54% | -20.98% | -19.86% | -18.85% | -14.21% | -8.07% | -5.24% | -4.09% |
| Pretax margin | 4.11% | 2.40% | -3.27% | 1.40% | -2.74% | -3.12% | -7.79% | -9.51% | -14.81% | -21.18% | -23.38% | -29.31% | -28.27% | -24.95% | -22.31% | -19.17% | -14.03% | -6.48% | -5.35% | -4.44% |
| Net profit margin | 5.81% | 3.04% | -1.55% | 2.91% | -0.62% | -1.11% | -5.48% | -7.59% | -12.36% | -17.63% | -19.19% | -23.57% | -22.20% | -18.86% | -16.97% | -13.20% | -8.95% | -3.52% | -2.77% | -4.29% |
The profitability ratios of Guidewire Software Inc exhibit a noteworthy transformation over the period analyzed, reflecting a significant evolution in the company's financial performance.
Gross profit margin, a key indicator of core operational efficiency, has demonstrated a consistent upward trend since the low point observed in October 2022 at 44.43%. The margin increased steadily through subsequent periods, reaching 60.76% by October 2024 and further advancing to 62.54% by July 2025. This upward trajectory signifies enhancements in cost management or product profitability, allowing the company to retain a larger proportion of revenue as gross profit.
In contrast, the operating profit margin revealed a prolonged period of losses, with negative margins consistently persisting from October 2020 through October 2022. The margins declined from -4.09% in October 2020 to a nadir of -24.78% in October 2022. Beginning thereafter, there has been a steady recovery, with the margin improving progressively, turning positive at 0.06% in January 2025. By July 2025, the operating margin reached 3.42%, indicating the company's transition toward operational profitability.
Similarly, the pre-tax margin, which accounts for all expenses before taxes, followed a comparable pattern. It exhibited persistent losses through October 2022, with a lowest value of -29.31%. From this point onward, gradual improvements occurred, crossing into positive territory at 1.40% in October 2024 and rising further to 4.11% in July 2025. This pattern underscores a narrowing of expenses relative to revenues and improved operational efficiency.
Net profit margin, representing the company's bottom-line profitability, also experienced significant improvement during the period. It remained negative until October 2022, where it stood at -23.57%, then steadily moved toward breakeven and profitability. Notably, the margin turned positive at 2.91% in October 2024 and continued upward, reaching 5.81% in July 2025. These shifts indicate effective initiatives in cost control, revenue growth, or both, culminating in actual net income generation in recent periods.
Overall, the profitability ratios depict a company that faced sustained losses through most of 2020 and 2021 but has progressively improved its profitability profile from late 2022 onward. The upward trend in gross profit margins combined with turning operating, pre-tax, and net margins positive suggests the company's strategies towards operational efficiency, cost management, and revenue enhancement are bearing fruit, setting a foundation for sustained profitability in the period following October 2024.
Return on investment
| Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.51% | 0.88% | 0.02% | -0.91% | -2.36% | -2.78% | -4.86% | -5.66% | -7.37% | -9.80% | -9.60% | -10.71% | -8.80% | -7.76% | -6.95% | -6.40% | -4.55% | -2.72% | -1.71% | -1.32% |
| Return on assets (ROA) | 2.57% | 1.39% | -0.66% | 1.16% | -0.27% | -0.52% | -2.52% | -3.63% | -5.52% | -8.09% | -8.33% | -10.19% | -7.96% | -6.97% | -5.94% | -4.48% | -2.86% | -1.19% | -0.90% | -1.39% |
| Return on total capital | 4.30% | 2.85% | -2.04% | 1.71% | -1.50% | -1.81% | -5.20% | -6.68% | -10.62% | -14.76% | -15.59% | -19.45% | -14.48% | -12.40% | -10.23% | -8.20% | -5.54% | -1.96% | -1.36% | -0.93% |
| Return on equity (ROE) | 4.79% | 2.54% | -1.33% | 2.37% | -0.45% | -0.83% | -4.04% | -5.77% | -9.33% | -12.98% | -13.69% | -16.75% | -12.43% | -10.38% | -8.76% | -6.51% | -4.30% | -1.72% | -1.28% | -1.95% |
The profitability ratios for Guidewire Software Inc. from October 2020 through July 2025 depict a trend of persistent negative returns transitioning toward positive territory in the latter part of the analyzed period.
Operating Return on Assets (Operating ROA):
Initially, the company experienced negative Operating ROA values that deepened from -1.32% in October 2020 to a low of -10.71% in October 2022. This indicates that operational activities were consistently unprofitable during this period. However, from early 2023 onwards, there is a noticeable upward trajectory; by October 2024, the Operating ROA approached -0.91%, and it turned positive at 0.02% in January 2025. This reversal suggests an improvement in operational efficiency and profitability on assets.
Return on Assets (ROA):
Similar to Operating ROA, ROA declined from -1.39% in October 2020 to a nadir of -10.19% in October 2022, reflecting deteriorating overall asset utilization efficiency. The trend improved markedly starting in late 2023, culminating in a slight positive ROA of 1.16% in October 2024. Further progress is observed with a forecasted ROA of approximately 2.57% in July 2025, indicating a significant turnaround in how effectively the company is generating net income from its assets.
Return on Total Capital:
This ratio gained clarity of recovery after reaching a trough of -19.45% in October 2022. The subsequent period shows a consistent upward movement, with the ratio approaching near breakeven at -1.81% in April 2024. By October 2024, the return on total capital becomes positive at 1.71%, and projections suggest a sustained upward trend, reaching approximately 4.30% in July 2025. This reflects improved efficiency in generating profits from total capital employed.
Return on Equity (ROE):
ROE, which measures the return generated on shareholders' equity, also exhibited a substantial decline, bottoming at -16.75% in October 2022. From this low point, ROE steadily improved, reaching a positive 2.37% in October 2024. Full recovery is projected with ROE expectations of about 4.79% by July 2025, indicating enhanced profitability attributable to shareholders and a potential return to more conventional profitability levels.
Summary:
Across all profitability ratios—Operating ROA, ROA, Return on Total Capital, and ROE—Guidewire Software Inc. experienced significant deterioration through 2020 to 2022, characterized by deep negative profitability signals. Starting around late 2022 to early 2023, a consistent recovery trend is evident, with all ratios moving toward positive figures by late 2024 and into mid-2025. This upward trajectory suggests a potential sustainable improvement in operational efficiency, asset utilization, and overall profitability, possibly driven by strategic initiatives, cost management, or revenue growth efforts. Nonetheless, the company's profitability remains in a phase of transition, with positive levels only emerging recently and forecasted to strengthen further.