Guidewire Software Inc (GWRE)

Interest coverage

		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	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-23,512	-52,573	-56,792	-97,912	-108,718	-149,490	-187,794	-192,382	-208,623	-199,447	-167,322	-151,744	-139,357	-105,584	-61,159	-39,933	-30,893	-23,886	-47,145	-37,312
Interest expense (ttm)	US$ in thousands	7,117	6,738	6,743	6,740	6,725	6,716	9,968	13,170	16,326	19,446	19,254	19,067	18,885	18,711	18,518	18,325	18,136	17,945	17,872	17,694
Interest coverage		-3.30	-7.80	-8.42	-14.53	-16.17	-22.26	-18.84	-14.61	-12.78	-10.26	-8.69	-7.96	-7.38	-5.64	-3.30	-2.18	-1.70	-1.33	-2.64	-2.11

October 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-23,512K ÷ $7,117K
= -3.30

Guidewire Software Inc's interest coverage ratio has shown a declining trend from January 2020 to October 2024. The interest coverage ratio has consistently been negative over this period, indicating that the company has had difficulty covering its interest expenses with its operating earnings.

The interest coverage ratio reached its lowest point in July 2023 at -22.26, indicating a very weak ability to meet interest payment obligations. However, there has been an improvement in the ratio from October 2023 onwards, with the ratio gradually increasing to -3.30 by October 2024. This improvement suggests that the company may be better positioned to cover its interest expenses moving forward.

Overall, the negative interest coverage ratios signal a potential risk for Guidewire Software Inc as it indicates that the company's earnings may not be sufficient to cover its interest costs. Investors and creditors should closely monitor this ratio to assess the company's financial health and ability to service its debt obligations efficiently.