Guidewire Software Inc (GWRE)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 62,606 | 38,884 | -25,859 | 21,641 | -20,100 | -23,222 | -65,360 | -80,549 | -127,378 | -176,427 | -190,218 | -230,488 | -210,269 | -179,724 | -151,396 | -122,843 | -85,570 | -30,541 | -22,417 | -15,421 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,457,230 | 1,362,580 | 1,268,740 | 1,268,030 | 1,342,730 | 1,285,370 | 1,256,110 | 1,205,650 | 1,199,470 | 1,195,110 | 1,220,170 | 1,185,160 | 1,451,660 | 1,449,650 | 1,480,470 | 1,498,380 | 1,544,890 | 1,556,480 | 1,644,660 | 1,659,860 |
| 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% |
July 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $62,606K ÷ ($—K + $1,457,230K)
= 4.30%
The analysis of Guidewire Software Inc's return on total capital over the specified period reveals a significant trend of decline followed by ongoing recovery. From October 2020 through October 2022, the company experienced consistent negative returns, with the lowest point recorded at approximately -19.45% in October 2022, indicating that the company was not generating sufficient returns relative to its total capital during this period. This persistent negative performance suggests challenges in effectively utilizing its capital base to generate profits or cash flows.
Subsequently, from January 2023 onward, there has been a gradual and sustained improvement in the return on total capital. The figures transitioned towards less negative territory, reaching -1.81% by April 2024 and approaching near breakeven levels, with a positive return of 1.71% observed in October 2024. This upward trajectory reflects a potential turnaround in operational performance, efficiency, or strategic adjustments that have begun to leverage the company's total capital more effectively.
Overall, the data indicates that after a prolonged period of negative returns, Guidewire Software Inc has demonstrated signs of operational stabilization and improving profitability metrics, culminating in a positive return on total capital in late 2024 and continuing into 2025. This shift from negative to positive return suggests a notable improvement in how the company is deploying its capital to generate earnings, which may be indicative of successful strategic initiatives or fundamental business improvements.