Guidewire Software, Inc. — Investor Presentation 2025

Awesome. Perfect. Thank you. Thank you all for being here. This is always such an amazing event. For me, it always hits home just to see the impact that Guidewire has in the industry. It's super humbling for me. I joined Guidewire in 2017 and had moved into the CFO role in 2020 and had the opportunity to help the business navigate through this cloud transition. It really has been the honor of my professional career to be here to help with all this hard work. This hard work is amazing because it sets us up so well for what the future has. I will jump into it. I'll start with some key financial highlights. We have a very durable ARR growth engine, and that's supported by the core work that we're doing on cloud migrations and the modernization cycle that we're enabling for core insurance processing systems. You know us all, and you love, like I love, these very meaningful customer relationships that last in decades and result in some of the best retention rates in enterprise software. We have a real opportunity now ahead of us to infuse much more organic innovation based on the hard work that we've done on the Guidewire Cloud Platform, but also do more inorganic activities. I'm super excited about the announcement with ProNavigator. We're thinking more about those types of opportunities. For a while, you all know that we were pretty thoughtful and introspective as we were working through the cloud transition. Now we're kind of looking up a little bit more. The model is playing out the way we'd hoped it would and kind of in line with how we set our expectations. You're seeing the gross margin expansion, which is leveraging the platform investments that we have made. We look forward to continue to driving profitable growth. This is a slide of our durable ARR growth. As you know, this growth engine is being driven by the cloud business. This is particularly exciting because over the last two years, we've seen that growth rate tick up into the upper teens. On the last earnings call, we talked about how that upper teens growth profile will be more durable for us as we look ahead. It's super exciting to be able to say those words in a forum like this. Moving off of our historical ambition of being a long, very durable mid-teens grower and thinking about how we move into an upper teens grower and the progress we're seeing in the cloud is driving that confidence that we have to be able to say that. This is a slide that we've shown over the years. I think you all understand that the cloud ARR is driving our overall ARR growth. The InsuranceSuite Cloud customers are driving our cloud ARR. The chart on the right looks at our InsuranceSuite Cloud cohort and how they are growing. It has just been tremendous to see the progress that we've made there over the last six years. This is a slide that we've now shown a number of years. One of the things that's important to understand in terms of how we engage with our customers is that these are long and very strategic engagements. We typically sign five-year initial terms. We have certainly examples where we sign longer durated contracts than that. Typically, we sign five-year initial terms. It is very common for those contracts to ramp over that five-year period. That is spelled out in a fee table in the contract. This is a view of those cohorts by fiscal year and how the ramps have progressed. You may remember back in FY 2023, we spent some time talking about that kind of acceleration in year three. Last year was a little bit more linear. The other thing that's really exciting when you look at this page, clearly something changed about three years ago where we saw all of these curves just move up on the page. That is just a reflection of the platform maturing and the referenceability that we're getting out in the market that is allowing for customers and prospects to feel more confident in the destination and make bigger commitments. Coming out of last year, it was not certain that we would see this level of step up with respect to the FY 2025 cohort. The team has just done a tremendous job executing on this opportunity. It is great to see customers' willingness to make some large commitments. Those cohorts and those ramped agreements are very important in terms of how we think about the visibility of our model. ARR is the primary metric that we focus on internally. The components of building ARR are pretty simple. How much ARR is going to come from deals that we're going to sell in the year? That includes things like true ups and CPI, but all the kind of sales activity that we have in the year that will translate into ARR in the period. Then we have the ARR that comes off of the backlog. This is all the hard work we did in prior years, the realization of that ARR. You have to account for the attrition events that occur. We have very, very low attrition. Last year, we talked about having the lowest attrition rate on record since we released ARR as a metric. Just tremendous to see that progress. All of those things together yield a pretty predictable model and give us a lot of confidence in how we think about the growth rates as we look ahead. This is a new slide. One of the things that I wanted to bring into this room, we always tend to orient on the annual numbers and think about the longer-term. We understand that you all have to build quarterly models. It can be difficult at times to model some of the quarterly seasonality. A key driver into the quarterly seasonality is the ARR coming off of the backlog. I was going to say we're not in a six-month reporting cadence quite yet. I'm going to provide a little bit of quarterly disclosure here. What this looks at is it looks like this is the ARR that's coming off of the backlog this year and our expectation for the ARR that's coming off of the backlog and where we expect it to fall in the quarter. Takeaway is for the year, we're seeing very healthy growth of ARR coming off of the backlog. Q1, Q2, and Q4 are all going to see a nice tick up on a year-over-year basis. Q3 this year actually has a year-over-year decline. That is just a function of how those particular cohorts that were in Q3 fell. It turns out last year, we had a couple of deals that we signed where the ramping event doesn't really happen until year three. Nothing to read into that dynamic. Just to note that when we looked at those cohorts, that jumped off the page as something that you all should be aware of as you build your models. Last year, I think we saw a little bit more volatility around quarterly earnings around some of these dynamics. This is our attempt to bring some of that into this room and to allow us to talk about this a little bit more. This is some kind of new view into the seasonality of the business this year. As we look at the overall gross margin, this has just been tremendous to watch and tremendous to be a part of. Many of you remember about three years ago, we came in here and said, hey, look, we've invested ahead of the demand curve. We've built out a cloud operations function. These early cloud cohorts are absolutely critical to our long-term success. We've invested ahead of that demand curve. Now we've built the organization to support a billion dollars of ARR. We need to grow into that billion dollars of ARR. We have executed to that in a tremendous fashion. I think the platform investments were improving efficiency behind the scenes. The team did a really good job around discipline, around hiring, and how we think about cloud operations and the needs there. There was a lot of focus into how we manage our AWS environments and how we manage our cloud infrastructure to realize this page. As we look ahead, we'll see a little bit more growth in terms of headcount. We'll see a little bit more growth on the other costs and the infrastructure costs to support our cloud business. We will still be delivering very, very healthy incremental margins. We'll talk about that a little bit more on a coming slide. We've talked about this a lot over the years. As we approach this transition, think about this as chapter two and how Mike thought about the cloud transition and unlocking the cloud transition. There were really three things that we had to manage through. The first is, can you build this? This is a very difficult use case. Establishing this cloud architecture was absolutely critical to our strategy and investing to make sure that we capture that platform to support our growth into the future. The second is, can we sell it? Can we continue to sell it at a high level? Can we have those win rates that we saw in the on-prem world, in the cloud world? The win rates that John showed today were just tremendous. The team has done a great job executing on that part of it. Then can we scale it? Can we deliver a software margin? I'm very proud of the progress that we have made there. This is probably the last time I will show this slide because this is very much kind of the orientation around how we thought about the cloud transition. Maybe a little bit of a pat on the back. We feel very good about what we've accomplished. What is most exciting about this slide is really what it unlocks for us. When we think about the growth pillars, and this mirrors what John talked about. Many of these growth pillars are what John talked about. We still have a number of very exciting growth pillars ahead of the company. There's still a lot of work to do on migrations. We have approximately 150 on-prem customers. There's a long runway there. We hope to continue to accelerate that. There's meaningful work to do there as we continue to migrate our on-prem customer base to the cloud. Modernizations, there's still way too much of this industry running on antiquated systems. That is just the bread and butter of what we do, is kind of waking up every day to try to modernize this industry. New products, this has been the connections where we've really featured a lot of new products and new innovations. Very excited about the potential that that creates and the growth that that will afford us over time. The marketplace is something that continues to grow in a meaningful way. That ecosystem is very exciting. We have some interesting revenue share partners in there, and there's opportunity to grow that base as well. Finally, M&A is, you should expect us to be thoughtful and measured. This is an industry that there are interesting opportunities, but there's also a lot of horizontal opportunities that we tend to steer away from. You'll think about us looking more at adjacencies rather than consolidation plays. There's some really exciting stuff here, and this will be part of our strategy as we look ahead. Okay, I'll pause and let you all kind of consume this slide, as this is a slide that we update every year. I know there's a lot of focus on this, so maybe I'll give you a second to digest it. Then I wanted to walk through a couple of things. Okay, first off, the FY 2026 targets are the same as the Q4 call. We'll obviously address the full-year guide on the Q1 earnings call. We're super happy with the momentum we're seeing this quarter, but want to focus this conversation on the longer-term opportunity. The FY 2026 targets are the same. For the FY 2028 targets, we put some thought into these targets as we kind of approach today. Clearly, we were going to be above the $1.5 billion ARR goal that we had previously. I think all of you were expecting that, and all of you knew that we were going to be above that number. These new growth rates, we've shifted towards a growth rate range rather than $1 target, which I think is more appropriate. We originally established $1 target when we said, hey, what will the business look like at $1 billion, and what will the business look like at $1.5 billion? Now, kind of as we get closer to some of these targets, moving that to a growth orientation makes more sense. These new growth rates would imply around $1.7 billion of ARR, which is a material upward adjustment off of the $1.5 billion that we talked about previously. Very excited to see that. This elevated growth also impacts our revenue growth expectations. We put 15%-16% CAGR for total revenue, and then revenue ex-services. If you remove services from that equation, it's about 17%-18%. The revenue ex-services should grow roughly in line with ARR. Gross margin expectations are largely the same, with a slight uptick in total gross margins as a result of the higher software mix associated with our new growth rates. However, the gross profit dollar, while the gross margin numbers are largely the same, the gross profit dollars are elevated given the higher revenue base that this model assumes. As we see numerous opportunities for growth, we do see opportunities to invest more. As a result, we've adjusted our operating cash flow. Our operating and cash flow margin targets are down a bit in this model. In this plan, much of the incremental gross profit dollars are being reinvested in the business. Just doing some simple math for you all, if you look at the midpoints of these ranges, our updated numbers project a little bit over $100 million in incremental gross profit dollars in FY 2028, but our plan shows about $30 million of incremental operating cash flow dollars in FY 2028. We're going to be reinvesting some of these elevated growth rates, reinvesting back in the business. We think that there's tremendous potential right now with everything that's going on in the world to invest more in this business. That's a reflection of the opportunity that we believe exists to keep this upper teens growth rate over a fairly long durated period. Those are the primary changes and adjustments that we've made to the FY 2028 targets. We still believe very strongly in the 80/40 plan. We released this plan last year. This is still a guiding light for us. This is the right framework to think about how we will eventually evolve Guidewire. We're going to lean towards focusing on growth over accelerating the timeline to this right now with all the opportunity that exists. We will always kind of have this in the back of our minds as our framework. You'll see us calibrate a little bit more towards growth than rushing towards this plan. We still think this is the right way to think about the long-term terminal margins for Guidewire. I will touch quickly on capital allocation. We maintain a very strong balance sheet, so about $1.5 billion in cash and cash equivalents on the balance sheet today. In FY 2026, we expect about $360 million in cash flow from operations, about $28 million in CapEx and capitalized software development costs. It puts us in a very healthy position with respect to our overall capitalization. This is important for us right now. I think where we are as a business, for a long time, M&A wasn't a focus. With the investments we've made in the platform, it's the right time for us to make sure that we're keeping those strategic avenues open for us. I think you will see us maintain a strong balance sheet this year. We always do have regular conversations with our board, think about capital return options. We will continue to do that. Unlikely to have a meaningful stock share repurchase program this year. As we look ahead, ultimately, I expect us to get to a place where we have a programmatic approach to how we think about capital return and stock repurchases. That's kind of it for me. I wanted to just quickly finish on the highlights. We're really thrilled about how this business has progressed over the last four years as we've worked through this cloud transition. There are all these new opportunities for us that even at the start of this transition that we had no idea that would be presenting themselves. A tremendous time at Guidewire and super excited about the future and what's to come. I will tick quickly through the GAAP to non-GAAP reconciliations and then I will invite the rest of the management team up on the stage for Q&A. Come on up. Thank you. We'll get that. Hey, Rishi. I'm in charge. All right. Perfect. You can hear me loud and clear? Hey, it's new. All right. Thank you. Thanks so much for this. Really appreciate all the details. Great to see the momentum of the business. Maybe I want to ask just a deeper dive in thinking about AI and the longer-term implications on the business. Mike, I know you've been taking AI seriously since day one. It's clearly resonating with customers and partners that we've been talking to with connections. Really great to see that. Obviously, the keynote yesterday outlined that. Maybe just a two-parter. Number one, as we think about the priority of investments in AI, can you outline what does that look like and picking and choosing your spots where you want Guidewire Software to be the one doing it versus allowing partners to do it and other vendors and working with them and having that interoperability? Now maybe taking it to the financial model, Jeff, appreciate the raised ARR targets and obviously investing for growth. As we think about the cost of inferencing, layering that into the model, how do we even think about that impact on gross margins and maybe some of the incremental engineering dollars you need to put to work on AI to productize this and really kind of transform yourselves into more of an AI-first company over the next couple of years? I know there's a lot there. Any color there would be helpful. Thank you. Okay, great question. I think you asked me to prioritize this. I don't know if I'm going to get it exactly right, but I'll try. From a product perspective, there is a very clear opportunity in underwriting and commercial lines underwriting. This space is just materializing right in front of us. We want to attack that in two ways. One is just outside of AI, we think that there's a real opportunity for UnderwritingCenter to be the backbone for how this should work in the industry with our Advanced Product Designer, insurance products, do what we've done for ClaimCenter and PolicyCenter for underwriting, and then really create what I'd like to say in hindsight will be our first AI-native application that without AI doesn't make any sense. There's a very clear opportunity there for us. Second, I want to make sure we are doing exactly what our customers need us to do in terms of facilitating their use of AI inside their enterprise. That doesn't necessarily create a direct product opportunity for us, but it helps us, I hope, sell more core systems. I think that is the second most important thing we can do. That's all the things that we talked about in the keynote the other day. We like to take this platform-first approach to building product. We say, hey, we need an underwriting product. What platform services do we need? Okay, let's build those platform services. Let's make those platform services available to partners, available to customers. That's the second most important thing we could do. Maybe the third most important thing we could do is use AI ourselves for our development organization. If we do that and we execute that and we get Diego should comment on this. If we get the unlock that we think might be possible, the entirety of our company will accelerate. I think we do all those things, and we're going to create a lot of shareholder value. Yeah. I mean, just on the modeling side, it's very early. I would say right now our approach to AI, as Mike hinted at, is more on an investment side, rolling it out to the development organization, ensuring we're investing in those tools and capabilities before we see the productivity gains. Right now, we're more on the investment cycle. As we think about how it's going to impact the revenue and gross margin model into the future, it's still too early for me to comment on that yet. Great. Thank you very much. Adam Hotchkiss with Goldman Sachs. I'd love to tag on to the last question and ask it in a little bit of a different way. You're launching a significant number of new products. This is obviously a completely new time for the company. Your win rates continue to be really impressive and improving. When we think about that part of the market that is still living on these legacy and antiquated systems, and you bring all of these new products to market, and that innovation gap relative to those legacy systems seemingly is accelerating, what have you been observing in your prospect conversations around their willingness to move into the cloud and be with Guidewire today, maybe versus where we were one to two years ago? One of the things that I've noticed definitely in a lot of prospect conversations, because of some of the new capabilities that we're talking about, like PricingCenter as an example, it's a much easier entry point for them to work with us rather than thinking about the totality of moving all the way to PolicyCenter, which I don't mean for that to sound truly as massive as it might. It really is a significant lift for them to think about even for perhaps a small line of business. Just that alone is a major decision for a carrier to make, and it's a decision point that doesn't come up terribly frequently. The thing that I like so much about PricingCenter and UnderwritingCenter, people can start to work with us around much smaller and more narrow use cases, perhaps starting out with particular lines of business, and then start to see what that experience is like. Of course, Paige was mentioning, we have spoken about it on Mainstage too. PricingCenter and UnderwritingCenter don't require InsuranceSuite to sit under them. We think that it's a significantly better experience, and there's a lot more that we can do leveraging the entire capabilities of InsuranceSuite. I think those, to me, are some really interesting ways about starting to think about working with carriers in smaller steps rather than expecting them to make a full decision to move straight away from a mainframe as an example. I'll add one thing to that. If we zoom out from the product set for a second and think about the seat that the decision makers are sitting in inside of carriers, the pressure on them has amplified quite a bit. Some of it's very unstructured in the way it's come at them from a get a hurry up and go after agentic architecture, hurry up and deploy agents. What I'll say is in the conversations driving the customers and the very real condition right now is the distance between winners and losers is both increasing in the gap. The pace at which that gap is created is very real. Pricing is probably first and foremost amongst those.The idea of sweating the asset and kicking the can down the road, that's really still very much a conversation we have to have and navigate for business case and prioritization and sequence. The pressure to act is increasing more so than I've seen in the past 20 years. Thanks, everyone. Ken Wong, Oppenheimer. Question for Diego, one for John. Mike, both you and Diego characterize this Connections as being one of the biggest product focus Connections you guys have had in a while. Yet on stage earlier today, Diego, you mentioned how this was just an appetizer. As you look towards the announcements next year, it's going to be much bigger. I guess are you able to elaborate on that? For John, you mentioned more financial progress with expansions than migrations. I guess how much of that is just a lot of the migrations are kind of recent big wins and there's a lag in terms of the financial impact? Or is it just the expansion activity has just been so good? Of course, we're going to tell you now everything we're launching next year. It's exactly how these things work. What I was trying to convey is that we've been working for many years in enabling the infrastructure. There is a lot of work that you do under the water that you don't see, and that is critical, especially when you think in terms of digital. Digital as an aspect of a library, as an aspect of infrastructure to deploy, as an aspect of infrastructure to monitor the deployment, infrastructure to monitor the service of the deployment. There are all those kinds of things that you do once, and you need to do it in a way that is resilient for scale. When you work on that at the beginning, it doesn't really show because at the same time, you need to build the first app or the first capability on top of this infrastructure. Typically, when you do that as a project, you can cut a lot of corners and just focus on delivering quickly the capability. When you do that as a platform, you basically need to make sure that you do all the things that, as I said, they are not as sexy, but they are the things that then enable you to grow from or grow or stay, grow the cogs or grow the percentage of the cogs. All those things have been done across a few years, and you didn't see it, but now all these are coming to fruition. In the last year, when we started to build new stuff, we started to get all the benefit of the infrastructure serving us. Even the acquisition of Quanti, John made it a point that it was running on GWCP almost on the point of acquisition, and that was because GWCP had, we had to build some infrastructure and some capability that then becomes very useful to kind of do something fairly different than what it was originally, how to say, envisioned for. When I laugh today and say this is just the beginning, it's because depending on the decision that Jeff was alluding to, we can invest more. If we make a decision of investing more, assuming that we have the right target on investing more, that we have good ideas, assuming we have good ideas, now we start to have the financial support, and we have an infrastructure that will enable us to accelerate in that direction. My comment was on a readiness of everything that we've done is unlocking an opportunity that we didn't have before because before, we needed to make sure that the infrastructure was, first of all, capable to support what we needed to support. I'll make a quick comment on that. Then I'll get to the other questions. The other one is underwriting in itself. The comment around the appetizer was really around UnderwritingCenter. UnderwritingCenter, there are going to be multiple pathways to get to the capabilities that make up UnderwritingCenter. There are going to be some people like me who might skip straight to dessert. Some people might actually just eat the salad. For commercial carriers, there are going to be multiple ways to consume UnderwritingCenter. If we think about between now and next year, us making all those components thread thoughtfully together and open those pathways, as Christina Colby said, some more bite-sized chunks or some more one course at a time type chunks to get on the pattern. Back to the expansion piece, the math around it really is more around pure expansion, not having anything to do with the large migrations. If you look at the number of customers around the world that are really on the larger end of the market and think about how many of them are single X centers, ClaimCenter or PolicyCenter, a few just BillingCenter, but Policy and Billing oftentimes in concert, but where there's still a lot of estate to go by either line of business, geography, or X center. The thing that is becoming more and more true in these conversations, two things, sorry. The first thing that's becoming more and more true is because of the platform and data and things like ProNavigator, the ability to thread decisions through the enterprise and run the enterprise estate on the platform.Putting more freight on the platform is really starting to prove out in the business case. That idea of a customer being full suite rather than singular product is starting to make more sense in that conversation. Sometimes it's a migration, Ken, that opens up that expansion. Sometimes it's expansion to cloud and then the migration later. All of those really are kind of really truly new estate for us. I'm excited to continue to go after that because I think that's still yet a relatively large estate. Thank you. Dylan Becker with William Blair. Maybe for Diego or John to start. Obviously, we're layering on more product. We're talking about kind of more value accruing to the customer base. On the implementation side, how are you thinking about automating more components of that process, creating and tailoring maybe a standardized roadmap to make that easier where customers realize value faster? That's one. Mike, for you on the slide around kind of the aggregate mix or share of the dollar and spend, I think it's like 25% that goes to administrative cost. Within that, where do you see kind of the biggest segments of opportunities if we're looking at it in a $3 trillion overall base? Minor improvements can be massively valuable. OK. I'll take a product angle or a technology angle. When we talk about APD, when we talk about digital, when we talk about all those things, you have to go back and look at what was the bigger cost of implementing Guidewire in general before cloud. The biggest cost was implementing integration, big chunk. There was, of course, implementing the product model. Then it was implementing digital. If you look at these three things, we came with APD. We came with a new integration framework that does not require GOSTO anymore. We came with the JDP and the Jutro digital platform. Those three things have reduced a lot the cost of implementation, a lot of the sort of success that you've seen Guidewire having, especially on the net new deal. At some point, if you really look at our history in the last five years, the model initially was expecting us to be faster in migration and not so, how to say, successful on net new deal. The net new deal started to come kind of at some point even surprise us a little bit. The reason they surprised us was because of those innovations on digital, on APD, and on the integration. We have today a product that is way more efficient to be implemented compared to what it was. With that said, with Gen AI and with the technology that is coming, we think that we're just scratching the surface on that, especially on things that typically require a lot of manpower for things that are fairly, fairly pedestrian. Like, oh, you need to refactor X, Y, Z. You need to adjust this implementation to modernize it in some aspect and so on. I think that it's a huge opportunity for us to continue to eventually evolve a product that will also have the ambition to go downstream. You saw the initial slide from Mike on Tier 1 to the product was originally kind of conceived for Tier 1, 2/3. Now we start to have some economy of scale that we can start to consider some of the specific configuration to go to Tier 4 and even further down. 100% what you're saying, we have seen improvement. The last thing I want to close is what we talked on yesterday about Jutro Studio is one more of this evolution of saying, hey, you don't need to implement InsuranceSuite and then implement digital. We're going to go into a direction in which you do one implementation and that implementation serves both master. That, again, is in the direction of speeding up and accelerating implementation. I'll just add to that maybe from a project standpoint. I think if you look at a number of the migration, well, the majority of the migration projects to cloud that have happened in the past few years, a lot of the time is spent truly in heavy lifting. A lot of the things that Diego was talking about, you're not necessarily even scratching the surface. It could be sort of removing a lot of the habits of the past and creating a meaningful test harness that helps you to be able to take advantage of things going forward. I would say very similar to the patterns when someone would have actually been migrating from one version of on-prem to another version of on-prem, but it's the last one. People put the effort into that. In addition to a lot of the things that Diego was describing relative to now being able to take advantage of the new features, we have been investing to take out a lot of that just effort and the heavy lifting, which caused things to be more emphasized around sort of this concept of lift and shift. The idea we're going to move it to cloud, then we can start to adopt the new features later, specifically by being able to take out a lot of the testing effort, which in some cases I think can take maybe 30% to even 40% of a project's time and perhaps not even necessarily get to the full surface of all of the application capability. Being able to do that now means that you can start to think about the adoption of all of the capabilities that Diego was describing. Historically, those have been things that people did as sort of a fast follow-on, if you will. That presents the question that you also asked, which is, is there a standard value map that talks about how do you prioritize those things? We put a lot of work into identifying what we think those can be potentially for any carrier. There genuinely is no standard that we've been able to determine, which I think is actually a great thing. It allows us to be able to decide those aspects that we're going to transform are going to deliver the most immediate business value based upon that specific carrier's priorities. It could be, as Diego was describing with Jutro, much better digital experiences and something that helps them to get closer to their customer so much faster. It could be something that they're looking to actually improve bottom line and looking at loss ratio instead. At least by having maybe some consistent possibilities for measures, we can start to talk about benchmarks that we've seen elsewhere. It really does need to be something that we tailor. It's actually a huge advantage that we get to tailor it. I know you had then a. Yeah. I'll give you a quick answer to the second half of your question. Think about it like, and this is super high level, but let's get 100 basis points out of claims processing without degrading customer experience, maybe even improving it. Let's get 100 basis points out of the expenses associated with underwriting and accepting and managing submissions and choosing which risks to take. Hopefully, we do a better job selecting the right risks. Both of those things are completely reasonable given the state of the platform and the state of the technology that we see right now. It's not going to happen next week. If you get 200 basis points out of that slide, it's pretty impactful. Aaron Kimson with Citizens. Thank you guys for the question. On UnderwritingCenter, is it something where you envision you'll start down market and then prove it out like the cloud? Or something where there are 10-12 other vendors in that space today all saying they have a workbench, whether they really do or they don't? You're going to go straight to your larger customers there. We're going to go to the customers that want to work with us there. I think we're not going to have any trouble finding one or two or three or 10. There's probably 100 that are all looking at this in one way or another. I want to be clear. Our goal isn't to say we're going to deliver the workbench because people think of that as the structure. Our goal is to find the right customers to work with to deliver the agentic system that facilitates underwriting in the insurance industry. In the process, I want to establish UnderwritingCenter as the backbone for doing that. I think up market, down market, we're going to find the sweet spot. We've got so many people interested in talking to us already. It's been less than 24 hours. We're going to find some good customers to work with here. I think line of business and interaction with the brokerage community is going to be much more of a driver than size. Thanks, team. Mohit Gogia with Jefferies. I wanted to just unpack the growth algorithm for you over the next few years. I think expansion seems like obviously will be a major part of that. As you think about expanding your share of the customer wallet, I was speaking to one of your customers on the show floor. I was reminded that you are fortunate to have an end market that is flush with cash. I was told that if a strategic partner. Who is that? I was told that if a strategic partner like Guidewire can create value, there is always cash that can be spent. That will drive your growth. Cloud was a big piece of expanding that customer share of the wallet. As you look towards the next few years, how you're thinking about new products, organic or inorganic, I'm assuming there is an organic price increase that is part of the equation too. There is AI monetization, which as software investors, there is some sort of skepticism around how much can different software vendors monetize AI. Just help me understand as to how you think about expanding that share of the wallet. I'll talk about expansion of share just for a second, and then monetization of AI, you guys can talk about it. On the expansion of wallet, this is something that in the slide that I showed that we're moving up the strategic roadmapping agenda and the strategic intention agenda from applications to CIO to COO to CFO to CEO to board. Right at the time when that pressure is coming in the exact reverse order at a very nice time for us, we think working with customers in a way to unlock some of these, the beauty of some of these more ambiguous problems to solve, like UnderwritingCenter, is if we can solve them, there's a lot more value to create, and there is a lot more value to capture. This is not an intensely competed procurement-driven price speed-up conversation. There's one pathway to PolicyCenter. Pathway to PolicyCenter is we're replacing a policy admin system. This is a really big thing to solve for, and it has its kind of own cycle. When we start to solve for how do we enter and exit markets better, what's the risk selection and pricing and underwriting capabilities, you need to do that to unlock value from expert underwriting and pathways to market. That's a whole different conversation. Yes, it will be price. There will be a price discovery. Yes, there will be a negotiation on it. We're solving for the very large side of that dollar that Mike talked about, which is the indemnity and exposure conversation. That's a conversation that we have to learn to navigate better, but we have pathways now to capture far more value. I'd like to know who's flush with cash. The simple fact is one of the things we will go after on this is there are a lot of categories that they're already spending in, and we're in a very unique spot to go after those in a very efficient way, efficient for us from a capture perspective, but also efficient for them from a standpoint of not satisfying a dozen different companies to solve 12 different problems. I should rehearse my answer to this. I have to be pretty, I don't know, you guys can judge me, I guess, how artful I am in responding to this. I think outside of AI, we have a tremendous growth opportunity ahead of us at Guidewire. We have to, and I think we will, successfully migrate 100% of our on-premises customer base to our cloud. We are completely committed to doing that. You saw, we're all excited about the AI features and everything else. We also develop these systems to provision them an environment, test their code base, move their code base to the cloud, help them migrate from their old product model to advanced product models. We're doing all of this work to get those customers to our cloud system. That's a growth opportunity. We have the baseline growth opportunity and the modernization potential in the industry. Now we have this potential in PricingCenter. We have this potential in UnderwritingCenter, even if the agentic AI comes from somebody else. I think that there is a tremendous opportunity for us to grow the company. Even underwriting investment thesis for the company right now, the AI, it is unclear. Let's say, how do we monetize that? I say basically before, I think I very logically said, hey, what if we get 100 basis points here and 100 basis points there? That kind of triples the addressable market for us. We're going after another component of the value chain in the industry that we serve that is far beyond the IT spend currently allocated to core systems. That's how I think about it. That's how we're trying to run the company. We're going to do our job. We're going to move our customer base to the cloud. We're going to win the modernization opportunity at the same win rates that we've been winning up till now, maintain 100% reference-ability, earn the trust, as Daniel said, every single time. I think that the AI potential will manifest over time. The only thing I want to add here is as we think about the targets and the financial model underpinning that, to get to the targets we outlined in FY 2028, that is still very much primarily the cloud transition story playing out and the increased acceleration that we're seeing in modernization and the fat part of the migration curve that is still very much ahead of us over the next three years. How we make that upper teens durable for a decade is kind of as PricingCenter, as UnderwritingCenter, as some of these new capabilities come into the fray. There are multiple ways that we can get to those targets in FY 2028. One of them could include none of this stuff that we're talking about today. Obviously, we're going to execute, and we believe that that will show up in the financial model before FY 2028. I just wanted to make sure that that was understood in those targets. Going back to my point of work that is under the water that you don't see immediately, but you will see a little bit later, we've been working a lot to make the product more, how to say, extensible in different countries. Mike did show a slide into which as long as there is one customer, the country was yellow. That is kind of a good way to mark a lot of country yellow. There is a difference between you have one customer and you own the country, so to speak. A huge direction for us of growth is still in some of those countries to sort of penetrate to a point of owning the entire country, and not in every yellow country we are in that place. Historically, the product was trustable, and it was capable to deliver what needed to be delivered. You cannot scale horizontally across all the customers. Going back to the question about cost of implementation, there was a cost of implementation that was maybe prohibitive for many customers. Now everything that we're doing from an extensibility perspective, implementation perspective, and also the fact that the pressure top-down CIO and so on is opening up doors in countries that is going to be part of our strategy. On top of that, there are a few countries that are not even yellow yet that is kind of creating that extra angle. Keep in mind, we have the best product on the market. That is sort of still a gigantic runway to sort of penetrate independently from anything else that we've been discussing in new product. Hey, it's Parker Lane from Stifel here. Jeff, maybe on the financial targets you have, you talked about the investment you're going to make of the incremental gross profit dollars through 2028. Maybe zoom in on what the key priorities are there. I know Mike talked about development velocity picking up in an AI world. How do we reconcile development velocity picking up with maybe also increased investment? Is it just a matter of delivering more innovation than you ever have before? Are you going to start seeing some of those efficiencies in your R&D process as well? Yeah. I mean, I think right now some of the tooling and capabilities we're rolling out to the development organization is more in the investment cycle phase rather than the realization of some of those gains that we expect to take. The investment is now that we have this cloud platform, now that we've done all the work kind of underneath the layer of water that was invisible that allows us to infuse more innovation into the industry, that's where the investment is going to be going. It's primarily in R&D. I wish Diego Devalle wasn't on the stage and hearing all this. I have to constrain him a little bit. A lot of it will be going towards the R&D efforts. There will be some sales and marketing investments, like new personas, some new motions that we have to support. We benefit from operating in a vertical where we know our customers very, very well. We should see some nice leverage on that side. Then G&A, you've got the finance guys. You need to be paid too a little bit. There's not a lot of growth going into the G&A function. We can continue to scale that. We generally have the structure in place that we need. This is not a scientific comment. It kind of connects what Jeff said to what Diego said. I want you to understand we have a backlog of functional insurance requirements by country, by line of business. There are many lines of business and countries where in the old world, it did not make economic sense for us to invest and build out that product feature because we would only sell it to one customer. If we can get these models to work and facilitate an increase in velocity for creating those solutions, suddenly those things are going to be logical for us to deliver. That is going to unlock those countries. That is going to unlock those lines of business. That is going to accelerate the implementations. I give this speech all the time to our developers. If we can make our developers more productive, I do not want to make the company more efficient. I want to build more insurance product. That is going to help us accelerate. Thanks. Joe up there. To predict out to FY 2028, there's a bookings assumption therein. The best I can estimate, it doesn't seem like you need anywhere close to the type of fully ramped ARR growth you've been doing to get to the 17%, 18% CAGR endpoint. Without getting too exact, is that directionally fair? Yeah. I mean, look, the fully ramped number and growth rates on the fully ramped number is one that always makes me a little bit uncomfortable. We had a huge deal with Liberty Mutual that drives a fully ramped outcome. You're going to see that number bounce around a little bit. I think you're picking up on the point that I was just making. Those targets are very realizable in just the core motion that we're going through today and allowing for some of this new innovation that we're talking about to provide upside to some of those numbers. I think you're thinking about it directionally right. I haven't done that math, but it sounds directionally right. Just as a follow-up, since you're winning almost 100% of DWP decisions, what does that say about the pipeline, not just over the next year, I suppose, but over years? Is there maybe an argument that the movement off mainframe to modernize, if you can show that AI improves speed to value, customers are talking about accelerating their growth by adopting your solutions quicker? Does that pick up the pace? That's actually a bigger feeder of pipeline than maybe you've been seeing? On a qualitative basis, that's the conversation, getting the conversation around what does it take to win in tomorrow's market rather than the avoidance of potential risk in a longstanding mainframe environment. On a qualitative basis, absolutely. On a quantitative basis, I'll say that in the very near-term, we feel really good about the pipeline coverage that we have. Some of that's traditional, and some of that is really kind of the longstanding mainframe dislocation of the mainframe entrenchment. If we think about that, it really ties very closely to the geographic component. As you go from North America around the world, there are some geographies that just have a larger footprint and more entrenched mainframe footprint. As we continue to develop the things that Mike just mentioned, that gives us more ability to talk about really predictability of programs and then the value of being on the cloud in Germany and in Japan, that is precisely important for operating in the context of those countries. In the long measure of time, yes, mathematically in the very near-term and for a long time forward, qualitatively, that's the story that we want to continue to make true. Hey, [Mike]. Great. Thank you, everybody. I think we'll wrap it up there. It's been a great dialogue. We'll head outside for a cocktail hour. OK. Super. Thanks, everybody, very much. Thank you.

Speaker 6: Awesome. Perfect. Thank you. Thank you all for being here. This is always such an amazing event. For me, it always hits home just to see the impact that Guidewire has in the industry. It's super humbling for me. I joined Guidewire in 2017 and had moved into the CFO role in 2020 and had the opportunity to help the business navigate through this cloud transition. It really has been the honor of my professional career to be here to help with all this hard work. This hard work is amazing because it sets us up so well for what the future has. I will jump into it. I'll start with some key financial highlights. We have a very durable ARR growth engine, and that's supported by the core work that we're doing on cloud migrations and the modernization cycle that we're enabling for core insurance processing systems. Awesome. awesome Perfect. perfect Thank you. thank you Thank you all for being here. thank you all for being here This is always such an amazing event. this is always such an amazing event For me, it always hits home just to see the impact that Guidewire has in the industry. for me it always hits home just to see the impact that guidewire has in the industry It's super humbling for me. it's super humbling for me I joined Guidewire in 2017 and had moved into the CFO role in 2020 and had the opportunity to help the business navigate through this cloud transition. i joined guidewire in 2017 and had moved into the cfo role in 2020 and had the opportunity to help the business navigate through this cloud transition It really has been the honor of my professional career to be here to help with all this hard work. it really has been the honor of my professional career to be here to help with all this hard work This hard work is amazing because it sets us up so well for what the future has. this hard work is amazing because it sets us up so well for what the future has I will jump into it. i will jump into it I'll start with some key financial highlights. i'll start with some key financial highlights We have a very durable ARR growth engine, and that's supported by the core work that we're doing on cloud migrations and the modernization cycle that we're enabling for core insurance processing systems. we have a very durable arr growth engine and that's supported by the core work that we're doing on cloud migrations and the modernization cycle that we're enabling for core insurance processing systems You know us all, and you love, like I love, these very meaningful customer relationships that last in decades and result in some of the best retention rates in enterprise software. We have a real opportunity now ahead of us to infuse much more organic innovation based on the hard work that we've done on the Guidewire Cloud Platform, but also do more inorganic activities. I'm super excited about the announcement with ProNavigator. We're thinking more about those types of opportunities. For a while, you all know that we were pretty thoughtful and introspective as we were working through the cloud transition. Now we're kind of looking up a little bit more. The model is playing out the way we'd hoped it would and kind of in line with how we set our expectations. You're seeing the gross margin expansion, which is leveraging the platform investments that we have made. We look forward to continue to driving profitable growth. You know us all, and you love, like I love, these very meaningful customer relationships that last in decades and result in some of the best retention rates in enterprise software. you know us all and you love like i love these very meaningful customer relationships that last in decades and result in some of the best retention rates in enterprise software We have a real opportunity now ahead of us to infuse much more organic innovation based on the hard work that we've done on the Guidewire Cloud Platform, but also do more inorganic activities. we have a real opportunity now ahead of us to infuse much more organic innovation based on the hard work that we've done on the guidewire cloud platform but also do more inorganic activities I'm super excited about the announcement with ProNavigator. i'm super excited about the announcement with pronavigator We're thinking more about those types of opportunities. we're thinking more about those types of opportunities For a while, you all know that we were pretty thoughtful and introspective as we were working through the cloud transition. for a while you all know that we were pretty thoughtful and introspective as we were working through the cloud transition Now we're kind of looking up a little bit more. now we're kind of looking up a little bit more The model is playing out the way we'd hoped it would and kind of in line with how we set our expectations. the model is playing out the way we'd hoped it would and kind of in line with how we set our expectations You're seeing the gross margin expansion, which is leveraging the platform investments that we have made. you're seeing the gross margin expansion which is leveraging the platform investments that we have made We look forward to continue to driving profitable growth. we look forward to continue to driving profitable growth This is a slide of our durable ARR growth. As you know, this growth engine is being driven by the cloud business. This is particularly exciting because over the last two years, we've seen that growth rate tick up into the upper teens. On the last earnings call, we talked about how that upper teens growth profile will be more durable for us as we look ahead. It's super exciting to be able to say those words in a forum like this. Moving off of our historical ambition of being a long, very durable mid-teens grower and thinking about how we move into an upper teens grower and the progress we're seeing in the cloud is driving that confidence that we have to be able to say that. This is a slide that we've shown over the years. This is a slide of our durable ARR growth. this is a slide of our durable arr growth As you know, this growth engine is being driven by the cloud business. as you know this growth engine is being driven by the cloud business This is particularly exciting because over the last two years, we've seen that growth rate tick up into the upper teens. this is particularly exciting because over the last two years we've seen that growth rate tick up into the upper teens On the last earnings call, we talked about how that upper teens growth profile will be more durable for us as we look ahead. on the last earnings call we talked about how that upper teens growth profile will be more durable for us as we look ahead It's super exciting to be able to say those words in a forum like this. it's super exciting to be able to say those words in a forum like this Moving off of our historical ambition of being a long, very durable mid-teens grower and thinking about how we move into an upper teens grower and the progress we're seeing in the cloud is driving that confidence that we have to be able to say that. moving off of our historical ambition of being a long very durable mid-teens grower and thinking about how we move into an upper teens grower and the progress we're seeing in the cloud is driving that confidence that we have to be able to say that This is a slide that we've shown over the years. this is a slide that we've shown over the years I think you all understand that the cloud ARR is driving our overall ARR growth. The InsuranceSuite Cloud customers are driving our cloud ARR. The chart on the right looks at our InsuranceSuite Cloud cohort and how they are growing. It has just been tremendous to see the progress that we've made there over the last six years. This is a slide that we've now shown a number of years. One of the things that's important to understand in terms of how we engage with our customers is that these are long and very strategic engagements. We typically sign five-year initial terms. We have certainly examples where we sign longer durated contracts than that. Typically, we sign five-year initial terms. It is very common for those contracts to ramp over that five-year period. That is spelled out in a fee table in the contract. I think you all understand that the cloud ARR is driving our overall ARR growth. i think you all understand that the cloud arr is driving our overall arr growth The InsuranceSuite Cloud customers are driving our cloud ARR. the insurancesuite cloud customers are driving our cloud arr The chart on the right looks at our InsuranceSuite Cloud cohort and how they are growing. the chart on the right looks at our insurancesuite cloud cohort and how they are growing It has just been tremendous to see the progress that we've made there over the last six years. it has just been tremendous to see the progress that we've made there over the last six years This is a slide that we've now shown a number of years. this is a slide that we've now shown a number of years One of the things that's important to understand in terms of how we engage with our customers is that these are long and very strategic engagements. one of the things that's important to understand in terms of how we engage with our customers is that these are long and very strategic engagements We typically sign five-year initial terms. we typically sign five-year initial terms We have certainly examples where we sign longer durated contracts than that. we have certainly examples where we sign longer durated contracts than that Typically, we sign five-year initial terms. typically we sign five-year initial terms It is very common for those contracts to ramp over that five-year period. it is very common for those contracts to ramp over that five-year period That is spelled out in a fee table in the contract. that is spelled out in a fee table in the contract This is a view of those cohorts by fiscal year and how the ramps have progressed. You may remember back in FY 2023, we spent some time talking about that kind of acceleration in year three. Last year was a little bit more linear. The other thing that's really exciting when you look at this page, clearly something changed about three years ago where we saw all of these curves just move up on the page. That is just a reflection of the platform maturing and the referenceability that we're getting out in the market that is allowing for customers and prospects to feel more confident in the destination and make bigger commitments. Coming out of last year, it was not certain that we would see this level of step up with respect to the FY 2025 cohort. The team has just done a tremendous job executing on this opportunity. It is great to see customers' willingness to make some large commitments. This is a view of those cohorts by fiscal year and how the ramps have progressed. this is a view of those cohorts by fiscal year and how the ramps have progressed You may remember back in FY 2023, we spent some time talking about that kind of acceleration in year three. you may remember back in fy 2023 we spent some time talking about that kind of acceleration in year three Last year was a little bit more linear. last year was a little bit more linear The other thing that's really exciting when you look at this page, clearly something changed about three years ago where we saw all of these curves just move up on the page. the other thing that's really exciting when you look at this page clearly something changed about three years ago where we saw all of these curves just move up on the page That is just a reflection of the platform maturing and the referenceability that we're getting out in the market that is allowing for customers and prospects to feel more confident in the destination and make bigger commitments. that is just a reflection of the platform maturing and the referenceability that we're getting out in the market that is allowing for customers and prospects to feel more confident in the destination and make bigger commitments Coming out of last year, it was not certain that we would see this level of step up with respect to the FY 2025 cohort. coming out of last year it was not certain that we would see this level of step up with respect to the fy 2025 cohort The team has just done a tremendous job executing on this opportunity. the team has just done a tremendous job executing on this opportunity It is great to see customers' willingness to make some large commitments. it is great to see customers' willingness to make some large commitments Those cohorts and those ramped agreements are very important in terms of how we think about the visibility of our model. ARR is the primary metric that we focus on internally. The components of building ARR are pretty simple. How much ARR is going to come from deals that we're going to sell in the year? That includes things like true ups and CPI, but all the kind of sales activity that we have in the year that will translate into ARR in the period. Then we have the ARR that comes off of the backlog. This is all the hard work we did in prior years, the realization of that ARR. You have to account for the attrition events that occur. We have very, very low attrition. Those cohorts and those ramped agreements are very important in terms of how we think about the visibility of our model. those cohorts and those ramped agreements are very important in terms of how we think about the visibility of our model ARR is the primary metric that we focus on internally. arr is the primary metric that we focus on internally The components of building ARR are pretty simple. the components of building arr are pretty simple How much ARR is going to come from deals that we're going to sell in the year? how much arr is going to come from deals that we're going to sell in the year That includes things like true ups and CPI, but all the kind of sales activity that we have in the year that will translate into ARR in the period. that includes things like true ups and cpi but all the kind of sales activity that we have in the year that will translate into arr in the period Then we have the ARR that comes off of the backlog. then we have the arr that comes off of the backlog This is all the hard work we did in prior years, the realization of that ARR. this is all the hard work we did in prior years the realization of that arr You have to account for the attrition events that occur. you have to account for the attrition events that occur We have very, very low attrition. we have very very low attrition Last year, we talked about having the lowest attrition rate on record since we released ARR as a metric. Just tremendous to see that progress. All of those things together yield a pretty predictable model and give us a lot of confidence in how we think about the growth rates as we look ahead. This is a new slide. One of the things that I wanted to bring into this room, we always tend to orient on the annual numbers and think about the longer-term. We understand that you all have to build quarterly models. It can be difficult at times to model some of the quarterly seasonality. A key driver into the quarterly seasonality is the ARR coming off of the backlog. I was going to say we're not in a six-month reporting cadence quite yet. I'm going to provide a little bit of quarterly disclosure here. Last year, we talked about having the lowest attrition rate on record since we released ARR as a metric. last year we talked about having the lowest attrition rate on record since we released arr as a metric Just tremendous to see that progress. just tremendous to see that progress All of those things together yield a pretty predictable model and give us a lot of confidence in how we think about the growth rates as we look ahead. all of those things together yield a pretty predictable model and give us a lot of confidence in how we think about the growth rates as we look ahead This is a new slide. this is a new slide One of the things that I wanted to bring into this room, we always tend to orient on the annual numbers and think about the longer- term. one of the things that i wanted to bring into this room we always tend to orient on the annual numbers and think about the longer- term We understand that you all have to build quarterly models. we understand that you all have to build quarterly models It can be difficult at times to model some of the quarterly seasonality. it can be difficult at times to model some of the quarterly seasonality A key driver into the quarterly seasonality is the ARR coming off of the backlog. a key driver into the quarterly seasonality is the arr coming off of the backlog I was going to say we're not in a six-month reporting cadence quite yet. i was going to say we're not in a six-month reporting cadence quite yet I'm going to provide a little bit of quarterly disclosure here. i'm going to provide a little bit of quarterly disclosure here What this looks at is it looks like this is the ARR that's coming off of the backlog this year and our expectation for the ARR that's coming off of the backlog and where we expect it to fall in the quarter. Takeaway is for the year, we're seeing very healthy growth of ARR coming off of the backlog. Q1, Q2, and Q4 are all going to see a nice tick up on a year-over-year basis. Q3 this year actually has a year-over-year decline. That is just a function of how those particular cohorts that were in Q3 fell. It turns out last year, we had a couple of deals that we signed where the ramping event doesn't really happen until year three. Nothing to read into that dynamic. What this looks at is it looks like this is the ARR that's coming off of the backlog this year and our expectation for the ARR that's coming off of the backlog and where we expect it to fall in the quarter. what this looks at is it looks like this is the arr that's coming off of the backlog this year and our expectation for the arr that's coming off of the backlog and where we expect it to fall in the quarter Takeaway is for the year, we're seeing very healthy growth of ARR coming off of the backlog. takeaway is for the year we're seeing very healthy growth of arr coming off of the backlog Q1, Q2, and Q4 are all going to see a nice tick up on a year-over-year basis. q1 q2 and q4 are all going to see a nice tick up on a year-over-year basis Q3 this year actually has a year-over-year decline. q3 this year actually has a year-over-year decline That is just a function of how those particular cohorts that were in Q3 fell. that is just a function of how those particular cohorts that were in q3 fell It turns out last year, we had a couple of deals that we signed where the ramping event doesn't really happen until year three. it turns out last year we had a couple of deals that we signed where the ramping event doesn't really happen until year three Nothing to read into that dynamic. nothing to read into that dynamic Just to note that when we looked at those cohorts, that jumped off the page as something that you all should be aware of as you build your models. Last year, I think we saw a little bit more volatility around quarterly earnings around some of these dynamics. This is our attempt to bring some of that into this room and to allow us to talk about this a little bit more. This is some kind of new view into the seasonality of the business this year. As we look at the overall gross margin, this has just been tremendous to watch and tremendous to be a part of. Many of you remember about three years ago, we came in here and said, hey, look, we've invested ahead of the demand curve. We've built out a cloud operations function. These early cloud cohorts are absolutely critical to our long-term success. We've invested ahead of that demand curve. Just to note that when we looked at those cohorts, that jumped off the page as something that you all should be aware of as you build your models. just to note that when we looked at those cohorts that jumped off the page as something that you all should be aware of as you build your models Last year, I think we saw a little bit more volatility around quarterly earnings around some of these dynamics. last year i think we saw a little bit more volatility around quarterly earnings around some of these dynamics This is our attempt to bring some of that into this room and to allow us to talk about this a little bit more. this is our attempt to bring some of that into this room and to allow us to talk about this a little bit more This is some kind of new view into the seasonality of the business this year. this is some kind of new view into the seasonality of the business this year As we look at the overall gross margin, this has just been tremendous to watch and tremendous to be a part of. as we look at the overall gross margin this has just been tremendous to watch and tremendous to be a part of Many of you remember about three years ago, we came in here and said, hey, look, we've invested ahead of the demand curve. many of you remember about three years ago we came in here and said hey look we've invested ahead of the demand curve We've built out a cloud operations function. we've built out a cloud operations function These early cloud cohorts are absolutely critical to our long-term success. these early cloud cohorts are absolutely critical to our long-term success We've invested ahead of that demand curve. we've invested ahead of that demand curve Now we've built the organization to support a billion dollars of ARR. We need to grow into that billion dollars of ARR. We have executed to that in a tremendous fashion. I think the platform investments were improving efficiency behind the scenes. The team did a really good job around discipline, around hiring, and how we think about cloud operations and the needs there. There was a lot of focus into how we manage our AWS environments and how we manage our cloud infrastructure to realize this page. As we look ahead, we'll see a little bit more growth in terms of headcount. We'll see a little bit more growth on the other costs and the infrastructure costs to support our cloud business. We will still be delivering very, very healthy incremental margins. We'll talk about that a little bit more on a coming slide. Now we've built the organization to support a billion dollars of ARR. now we've built the organization to support a billion dollars of arr We need to grow into that billion dollars of ARR. we need to grow into that billion dollars of arr We have executed to that in a tremendous fashion. we have executed to that in a tremendous fashion I think the platform investments were improving efficiency behind the scenes. i think the platform investments were improving efficiency behind the scenes The team did a really good job around discipline, around hiring, and how we think about cloud operations and the needs there. There was a lot of focus into how we manage our AWS environments and how we manage our cloud infrastructure to realize this page. the team did a really good job around discipline around hiring and how we think about cloud operations and the needs there. there was a lot of focus into how we manage our aws environments and how we manage our cloud infrastructure to realize this page As we look ahead, we'll see a little bit more growth in terms of headcount. as we look ahead we'll see a little bit more growth in terms of headcount We'll see a little bit more growth on the other costs and the infrastructure costs to support our cloud business. we'll see a little bit more growth on the other costs and the infrastructure costs to support our cloud business We will still be delivering very, very healthy incremental margins. we will still be delivering very very healthy incremental margins We'll talk about that a little bit more on a coming slide. we'll talk about that a little bit more on a coming slide We've talked about this a lot over the years. As we approach this transition, think about this as chapter two and how Mike thought about the cloud transition and unlocking the cloud transition. There were really three things that we had to manage through. The first is, can you build this? This is a very difficult use case. Establishing this cloud architecture was absolutely critical to our strategy and investing to make sure that we capture that platform to support our growth into the future. The second is, can we sell it? Can we continue to sell it at a high level? Can we have those win rates that we saw in the on-prem world, in the cloud world? The win rates that John showed today were just tremendous. The team has done a great job executing on that part of it. Then can we scale it? Can we deliver a software margin? I'm very proud of the progress that we have made there. We've talked about this a lot over the years. we've talked about this a lot over the years As we approach this transition, think about this as chapter two and how Mike thought about the cloud transition and unlocking the cloud transition. as we approach this transition think about this as chapter two and how mike thought about the cloud transition and unlocking the cloud transition There were really three things that we had to manage through. there were really three things that we had to manage through The first is, can you build this? the first is can you build this This is a very difficult use case. this is a very difficult use case Establishing this cloud architecture was absolutely critical to our strategy and investing to make sure that we capture that platform to support our growth into the future. establishing this cloud architecture was absolutely critical to our strategy and investing to make sure that we capture that platform to support our growth into the future The second is, can we sell it? the second is can we sell it Can we continue to sell it at a high level? can we continue to sell it at a high level Can we have those win rates that we saw in the on-prem world, in the cloud world? can we have those win rates that we saw in the on-prem world in the cloud world The win rates that John showed today were just tremendous. the win rates that john showed today were just tremendous The team has done a great job executing on that part of it. the team has done a great job executing on that part of it Then can we scale it? then can we scale it Can we deliver a software margin? can we deliver a software margin I'm very proud of the progress that we have made there. i'm very proud of the progress that we have made there This is probably the last time I will show this slide because this is very much kind of the orientation around how we thought about the cloud transition. Maybe a little bit of a pat on the back. We feel very good about what we've accomplished. What is most exciting about this slide is really what it unlocks for us. When we think about the growth pillars, and this mirrors what John talked about. Many of these growth pillars are what John talked about. We still have a number of very exciting growth pillars ahead of the company. There's still a lot of work to do on migrations. We have approximately 150 on-prem customers. This is probably the last time I will show this slide because this is very much kind of the orientation around how we thought about the cloud transition. this is probably the last time i will show this slide because this is very much kind of the orientation around how we thought about the cloud transition Maybe a little bit of a pat on the back. maybe a little bit of a pat on the back We feel very good about what we've accomplished. we feel very good about what we've accomplished What is most exciting about this slide is really what it unlocks for us. what is most exciting about this slide is really what it unlocks for us When we think about the growth pillars, and this mirrors what John talked about. when we think about the growth pillars and this mirrors what john talked about Many of these growth pillars are what John talked about. many of these growth pillars are what john talked about We still have a number of very exciting growth pillars ahead of the company. we still have a number of very exciting growth pillars ahead of the company There's still a lot of work to do on migrations. there's still a lot of work to do on migrations We have approximately 150 on-prem customers. we have approximately 150 on-prem customers There's a long runway there. We hope to continue to accelerate that. There's meaningful work to do there as we continue to migrate our on-prem customer base to the cloud. Modernizations, there's still way too much of this industry running on antiquated systems. That is just the bread and butter of what we do, is kind of waking up every day to try to modernize this industry. New products, this has been the connections where we've really featured a lot of new products and new innovations. Very excited about the potential that that creates and the growth that that will afford us over time. The marketplace is something that continues to grow in a meaningful way. That ecosystem is very exciting. We have some interesting revenue share partners in there, and there's opportunity to grow that base as well. There's a long runway there. there's a long runway there We hope to continue to accelerate that. we hope to continue to accelerate that There's meaningful work to do there as we continue to migrate our on-prem customer base to the cloud. there's meaningful work to do there as we continue to migrate our on-prem customer base to the cloud Modernizations, there's still way too much of this industry running on antiquated systems. modernizations there's still way too much of this industry running on antiquated systems That is just the bread and butter of what we do, is kind of waking up every day to try to modernize this industry. that is just the bread and butter of what we do is kind of waking up every day to try to modernize this industry New products, this has been the connections where we've really featured a lot of new products and new innovations. new products this has been the connections where we've really featured a lot of new products and new innovations Very excited about the potential that that creates and the growth that that will afford us over time. very excited about the potential that that creates and the growth that that will afford us over time The marketplace is something that continues to grow in a meaningful way. the marketplace is something that continues to grow in a meaningful way That ecosystem is very exciting. that ecosystem is very exciting We have some interesting revenue share partners in there, and there's opportunity to grow that base as well. we have some interesting revenue share partners in there and there's opportunity to grow that base as well Finally, M&A is, you should expect us to be thoughtful and measured. This is an industry that there are interesting opportunities, but there's also a lot of horizontal opportunities that we tend to steer away from. You'll think about us looking more at adjacencies rather than consolidation plays. There's some really exciting stuff here, and this will be part of our strategy as we look ahead. Okay, I'll pause and let you all kind of consume this slide, as this is a slide that we update every year. I know there's a lot of focus on this, so maybe I'll give you a second to digest it. Then I wanted to walk through a couple of things. Okay, first off, the FY 2026 targets are the same as the Q4 call. We'll obviously address the full-year guide on the Q1 earnings call. Finally, M&A is, you should expect us to be thoughtful and measured. finally m&a is you should expect us to be thoughtful and measured This is an industry that there are interesting opportunities, but there's also a lot of horizontal opportunities that we tend to steer away from. this is an industry that there are interesting opportunities but there's also a lot of horizontal opportunities that we tend to steer away from You'll think about us looking more at adjacencies rather than consolidation plays. you'll think about us looking more at adjacencies rather than consolidation plays There's some really exciting stuff here, and this will be part of our strategy as we look ahead. there's some really exciting stuff here and this will be part of our strategy as we look ahead Okay, I'll pause and let you all kind of consume this slide, as this is a slide that we update every year. okay i'll pause and let you all kind of consume this slide as this is a slide that we update every year I know there's a lot of focus on this, so maybe I'll give you a second to digest it. i know there's a lot of focus on this so maybe i'll give you a second to digest it Then I wanted to walk through a couple of things. then i wanted to walk through a couple of things Okay, first off, the FY 2026 targets are the same as the Q4 call. okay first off the fy 2026 targets are the same as the q4 call We'll obviously address the full-year guide on the Q1 earnings call. we'll obviously address the full-year guide on the q1 earnings call We're super happy with the momentum we're seeing this quarter, but want to focus this conversation on the longer-term opportunity. The FY 2026 targets are the same. For the FY 2028 targets, we put some thought into these targets as we kind of approach today. Clearly, we were going to be above the $1.5 billion ARR goal that we had previously. I think all of you were expecting that, and all of you knew that we were going to be above that number. These new growth rates, we've shifted towards a growth rate range rather than $1 target, which I think is more appropriate. We originally established $1 target when we said, hey, what will the business look like at $1 billion, and what will the business look like at $1.5 billion? We're super happy with the momentum we're seeing this quarter, but want to focus this conversation on the longer-term opportunity. we're super happy with the momentum we're seeing this quarter but want to focus this conversation on the longer-term opportunity The FY 2026 targets are the same. the fy 2026 targets are the same For the FY 2028 targets, we put some thought into these targets as we kind of approach today. for the fy 2028 targets we put some thought into these targets as we kind of approach today Clearly, we were going to be above the $1.5 billion ARR goal that we had previously. clearly we were going to be above the $1.5 billion arr goal that we had previously I think all of you were expecting that, and all of you knew that we were going to be above that number. i think all of you were expecting that and all of you knew that we were going to be above that number These new growth rates, we've shifted towards a growth rate range rather than $1 target, which I think is more appropriate. these new growth rates we've shifted towards a growth rate range rather than $1 target which i think is more appropriate We originally established $1 target when we said, hey, what will the business look like at $1 billion, and what will the business look like at $1.5 billion? we originally established $1 target when we said hey what will the business look like at $1 billion and what will the business look like at $1.5 billion Now, kind of as we get closer to some of these targets, moving that to a growth orientation makes more sense. These new growth rates would imply around $1.7 billion of ARR, which is a material upward adjustment off of the $1.5 billion that we talked about previously. Very excited to see that. This elevated growth also impacts our revenue growth expectations. We put 15%-16% CAGR for total revenue, and then revenue ex-services. If you remove services from that equation, it's about 17%-18%. The revenue ex-services should grow roughly in line with ARR. Gross margin expectations are largely the same, with a slight uptick in total gross margins as a result of the higher software mix associated with our new growth rates. Now, kind of as we get closer to some of these targets, moving that to a growth orientation makes more sense. now kind of as we get closer to some of these targets moving that to a growth orientation makes more sense These new growth rates would imply around $1.7 billion of ARR, which is a material upward adjustment off of the $1.5 billion that we talked about previously. these new growth rates would imply around $1.7 billion of arr which is a material upward adjustment off of the $1.5 billion that we talked about previously Very excited to see that. very excited to see that This elevated growth also impacts our revenue growth expectations. this elevated growth also impacts our revenue growth expectations We put 15% - 16% CAGR for total revenue, and then revenue ex-services. we put 15% - 16% cagr for total revenue and then revenue ex-services If you remove services from that equation, it's about 17% - 18%. if you remove services from that equation it's about 17% - 18% The revenue ex-services should grow roughly in line with ARR. the revenue ex-services should grow roughly in line with arr Gross margin expectations are largely the same, with a slight uptick in total gross margins as a result of the higher software mix associated with our new growth rates. gross margin expectations are largely the same with a slight uptick in total gross margins as a result of the higher software mix associated with our new growth rates However, the gross profit dollar, while the gross margin numbers are largely the same, the gross profit dollars are elevated given the higher revenue base that this model assumes. As we see numerous opportunities for growth, we do see opportunities to invest more. As a result, we've adjusted our operating cash flow. Our operating and cash flow margin targets are down a bit in this model. In this plan, much of the incremental gross profit dollars are being reinvested in the business. Just doing some simple math for you all, if you look at the midpoints of these ranges, our updated numbers project a little bit over $100 million in incremental gross profit dollars in FY 2028, but our plan shows about $30 million of incremental operating cash flow dollars in FY 2028. We're going to be reinvesting some of these elevated growth rates, reinvesting back in the business. However, the gross profit dollar, while the gross margin numbers are largely the same, the gross profit dollars are elevated given the higher revenue base that this model assumes. however the gross profit dollar while the gross margin numbers are largely the same the gross profit dollars are elevated given the higher revenue base that this model assumes As we see numerous opportunities for growth, we do see opportunities to invest more. as we see numerous opportunities for growth we do see opportunities to invest more As a result, we've adjusted our operating cash flow. as a result we've adjusted our operating cash flow Our operating and cash flow margin targets are down a bit in this model. our operating and cash flow margin targets are down a bit in this model In this plan, much of the incremental gross profit dollars are being reinvested in the business. in this plan much of the incremental gross profit dollars are being reinvested in the business Just doing some simple math for you all, if you look at the midpoints of these ranges, our updated numbers project a little bit over $100 million in incremental gross profit dollars in FY 2028, but our plan shows about $30 million of incremental operating cash flow dollars in FY 2028. just doing some simple math for you all if you look at the midpoints of these ranges our updated numbers project a little bit over $100 million in incremental gross profit dollars in fy 2028 but our plan shows about $30 million of incremental operating cash flow dollars in fy 2028 We're going to be reinvesting some of these elevated growth rates, reinvesting back in the business. we're going to be reinvesting some of these elevated growth rates reinvesting back in the business We think that there's tremendous potential right now with everything that's going on in the world to invest more in this business. That's a reflection of the opportunity that we believe exists to keep this upper teens growth rate over a fairly long durated period. Those are the primary changes and adjustments that we've made to the FY 2028 targets. We still believe very strongly in the 80/40 plan. We released this plan last year. This is still a guiding light for us. This is the right framework to think about how we will eventually evolve Guidewire. We're going to lean towards focusing on growth over accelerating the timeline to this right now with all the opportunity that exists. We will always kind of have this in the back of our minds as our framework. You'll see us calibrate a little bit more towards growth than rushing towards this plan. We still think this is the right way to think about the long-term terminal margins for Guidewire. We think that there's tremendous potential right now with everything that's going on in the world to invest more in this business. we think that there's tremendous potential right now with everything that's going on in the world to invest more in this business That's a reflection of the opportunity that we believe exists to keep this upper teens growth rate over a fairly long durated period. that's a reflection of the opportunity that we believe exists to keep this upper teens growth rate over a fairly long durated period Those are the primary changes and adjustments that we've made to the FY 2028 targets. those are the primary changes and adjustments that we've made to the fy 2028 targets We still believe very strongly in the 80/40 plan. we still believe very strongly in the 80/40 plan We released this plan last year. we released this plan last year This is still a guiding light for us. this is still a guiding light for us This is the right framework to think about how we will eventually evolve Guidewire. this is the right framework to think about how we will eventually evolve guidewire We're going to lean towards focusing on growth over accelerating the timeline to this right now with all the opportunity that exists. we're going to lean towards focusing on growth over accelerating the timeline to this right now with all the opportunity that exists We will always kind of have this in the back of our minds as our framework. we will always kind of have this in the back of our minds as our framework You'll see us calibrate a little bit more towards growth than rushing towards this plan. you'll see us calibrate a little bit more towards growth than rushing towards this plan We still think this is the right way to think about the long-term terminal margins for Guidewire. we still think this is the right way to think about the long-term terminal margins for guidewire I will touch quickly on capital allocation. We maintain a very strong balance sheet, so about $1.5 billion in cash and cash equivalents on the balance sheet today. In FY 2026, we expect about $360 million in cash flow from operations, about $28 million in CapEx and capitalized software development costs. It puts us in a very healthy position with respect to our overall capitalization. This is important for us right now. I think where we are as a business, for a long time, M&A wasn't a focus. With the investments we've made in the platform, it's the right time for us to make sure that we're keeping those strategic avenues open for us. I think you will see us maintain a strong balance sheet this year. I will touch quickly on capital allocation. i will touch quickly on capital allocation We maintain a very strong balance sheet, so about $1.5 billion in cash and cash equivalents on the balance sheet today. we maintain a very strong balance sheet so about $1.5 billion in cash and cash equivalents on the balance sheet today In FY 2026, we expect about $360 million in cash flow from operations, about $28 million in CapEx and capitalized software development costs. in fy 2026 we expect about $360 million in cash flow from operations about $28 million in capex and capitalized software development costs It puts us in a very healthy position with respect to our overall capitalization. it puts us in a very healthy position with respect to our overall capitalization This is important for us right now. this is important for us right now I think where we are as a business, for a long time, M&A wasn't a focus. i think where we are as a business for a long time m&a wasn't a focus With the investments we've made in the platform, it's the right time for us to make sure that we're keeping those strategic avenues open for us. with the investments we've made in the platform it's the right time for us to make sure that we're keeping those strategic avenues open for us I think you will see us maintain a strong balance sheet this year. i think you will see us maintain a strong balance sheet this year We always do have regular conversations with our board, think about capital return options. We will continue to do that. Unlikely to have a meaningful stock share repurchase program this year. As we look ahead, ultimately, I expect us to get to a place where we have a programmatic approach to how we think about capital return and stock repurchases. That's kind of it for me. I wanted to just quickly finish on the highlights. We're really thrilled about how this business has progressed over the last four years as we've worked through this cloud transition. There are all these new opportunities for us that even at the start of this transition that we had no idea that would be presenting themselves. A tremendous time at Guidewire and super excited about the future and what's to come. I will tick quickly through the GAAP to non-GAAP reconciliations and then I will invite the rest of the management team up on the stage for Q&A. Come on up. Thank you. We'll get that. We always do have regular conversations with our board, think about capital return options. we always do have regular conversations with our board think about capital return options We will continue to do that. we will continue to do that Unlikely to have a meaningful stock share repurchase program this year. unlikely to have a meaningful stock share repurchase program this year As we look ahead, ultimately, I expect us to get to a place where we have a programmatic approach to how we think about capital return and stock repurchases. as we look ahead ultimately i expect us to get to a place where we have a programmatic approach to how we think about capital return and stock repurchases That's kind of it for me. that's kind of it for me I wanted to just quickly finish on the highlights. i wanted to just quickly finish on the highlights We're really thrilled about how this business has progressed over the last four years as we've worked through this cloud transition. we're really thrilled about how this business has progressed over the last four years as we've worked through this cloud transition There are all these new opportunities for us that even at the start of this transition that we had no idea that would be presenting themselves. there are all these new opportunities for us that even at the start of this transition that we had no idea that would be presenting themselves A tremendous time at Guidewire and super excited about the future and what's to come. a tremendous time at guidewire and super excited about the future and what's to come I will tick quickly through the GAAP to non-GAAP reconciliations and t hen I will invite the rest of the management team up on the stage for Q&A. i will tick quickly through the gaap to non-gaap reconciliations and t hen i will invite the rest of the management team up on the stage for q&a Come on up. come on up Thank you. thank you We'll get that. we'll get that

Speaker 9: Hey, Rishi. Hey, Rishi. hey rishi

Speaker 12: I'm in charge. I'm in charge. i'm in charge

Speaker 9: All right. Perfect. You can hear me loud and clear? All right. all right Perfect. perfect You can hear me loud and clear? you can hear me loud and clear

Speaker 12: Hey, it's new. Hey, it's new. hey it's new

Speaker 9: All right. All right. all right

Speaker 12: Thank you. Thanks so much for this. Really appreciate all the details. Great to see the momentum of the business. Maybe I want to ask just a deeper dive in thinking about AI and the longer-term implications on the business. Mike, I know you've been taking AI seriously since day one. It's clearly resonating with customers and partners that we've been talking to with connections. Really great to see that. Obviously, the keynote yesterday outlined that. Maybe just a two-parter. Number one, as we think about the priority of investments in AI, can you outline what does that look like and picking and choosing your spots where you want Guidewire Software to be the one doing it versus allowing partners to do it and other vendors and working with them and having that interoperability? Thank you. thank you Thanks so much for this. thanks so much for this Really appreciate all the details. really appreciate all the details Great to see the momentum of the business. great to see the momentum of the business Maybe I want to ask just a deeper dive in thinking about AI and the longer-term implications on the business. maybe i want to ask just a deeper dive in thinking about ai and the longer-term implications on the business Mike, I know you've been taking AI seriously since day one. mike i know you've been taking ai seriously since day one It's clearly resonating with customers and partners that we've been talking to with connections. it's clearly resonating with customers and partners that we've been talking to with connections Really great to see that. really great to see that Obviously, the keynote yesterday outlined that. obviously the keynote yesterday outlined that Maybe just a two-parter. maybe just a two-parter Number one, as we think about the priority of investments in AI, can you outline what does that look like and picking and choosing your spots where you want Guidewire Software to be the one doing it versus allowing partners to do it and other vendors and working with them and having that interoperability? number one as we think about the priority of investments in ai can you outline what does that look like and picking and choosing your spots where you want guidewire software to be the one doing it versus allowing partners to do it and other vendors and working with them and having that interoperability Now maybe taking it to the financial model, Jeff, appreciate the raised ARR targets and obviously investing for growth. As we think about the cost of inferencing, layering that into the model, how do we even think about that impact on gross margins and maybe some of the incremental engineering dollars you need to put to work on AI to productize this and really kind of transform yourselves into more of an AI-first company over the next couple of years? I know there's a lot there. Any color there would be helpful. Thank you. Now maybe taking it to the financial model, Jeff, a ppreciate the raised ARR targets and obviously investing for growth. now maybe taking it to the financial model jeff, a ppreciate the raised arr targets and obviously investing for growth As we think about the cost of inferencing, layering that into the model, how do we even think about that impact on gross margins and maybe some of the incremental engineering dollars you need to put to work on AI to productize this and really kind of transform yourselves into more of an AI-first company over the next couple of years? as we think about the cost of inferencing layering that into the model how do we even think about that impact on gross margins and maybe some of the incremental engineering dollars you need to put to work on ai to productize this and really kind of transform yourselves into more of an ai-first company over the next couple of years I know there's a lot there. i know there's a lot there Any color there would be helpful. any color there would be helpful Thank you. thank you

Speaker 9: Okay, great question. I think you asked me to prioritize this. I don't know if I'm going to get it exactly right, but I'll try. From a product perspective, there is a very clear opportunity in underwriting and commercial lines underwriting. This space is just materializing right in front of us. We want to attack that in two ways. One is just outside of AI, we think that there's a real opportunity for UnderwritingCenter to be the backbone for how this should work in the industry with our Advanced Product Designer, insurance products, do what we've done for ClaimCenter and PolicyCenter for underwriting, and then really create what I'd like to say in hindsight will be our first AI-native application that without AI doesn't make any sense. There's a very clear opportunity there for us. Okay, great question. okay great question I think you asked me to prioritize this. i think you asked me to prioritize this I don't know if I'm going to get it exactly right, but I'll try. i don't know if i'm going to get it exactly right but i'll try From a product perspective, there is a very clear opportunity in underwriting and commercial lines underwriting. from a product perspective there is a very clear opportunity in underwriting and commercial lines underwriting This space is just materializing right in front of us. this space is just materializing right in front of us We want to attack that in two ways. we want to attack that in two ways One is just outside of AI, we think that there's a real opportunity for UnderwritingCenter to be the backbone for how this should work in the industry with our Advanced Product Designer, insurance products, do what we've done for ClaimCenter and PolicyCenter for underwriting, and then really create what I'd like to say in hindsight will be our first AI-native application that without AI doesn't make any sense. one is just outside of ai we think that there's a real opportunity for underwritingcenter to be the backbone for how this should work in the industry with our advanced product designer insurance products do what we've done for claimcenter and policycenter for underwriting and then really create what i'd like to say in hindsight will be our first ai-native application that without ai doesn't make any sense There's a very clear opportunity there for us. there's a very clear opportunity there for us Second, I want to make sure we are doing exactly what our customers need us to do in terms of facilitating their use of AI inside their enterprise. That doesn't necessarily create a direct product opportunity for us, but it helps us, I hope, sell more core systems. I think that is the second most important thing we can do. That's all the things that we talked about in the keynote the other day. We like to take this platform-first approach to building product. We say, hey, we need an underwriting product. What platform services do we need? Okay, let's build those platform services. Let's make those platform services available to partners, available to customers. That's the second most important thing we could do. Maybe the third most important thing we could do is use AI ourselves for our development organization. If we do that and we execute that and we get Diego should comment on this. If we get the unlock that we think might be possible, the entirety of our company will accelerate. I think we do all those things, and we're going to create a lot of shareholder value. Second, I want to make sure we are doing exactly what our customers need us to do in terms of facilitating their use of AI inside their enterprise. second i want to make sure we are doing exactly what our customers need us to do in terms of facilitating their use of ai inside their enterprise That doesn't necessarily create a direct product opportunity for us, but it helps us, I hope, sell more core systems. that doesn't necessarily create a direct product opportunity for us but it helps us i hope sell more core systems I think that is the second most important thing we can do. i think that is the second most important thing we can do That's all the things that we talked about in the keynote the other day. that's all the things that we talked about in the keynote the other day We like to take this platform-first approach to building product. we like to take this platform-first approach to building product We say, hey, we need an underwriting product. we say hey we need an underwriting product What platform services do we need? what platform services do we need Okay, let's build those platform services. okay let's build those platform services Let's make those platform services available to partners, available to customers. let's make those platform services available to partners available to customers That's the second most important thing we could do. that's the second most important thing we could do Maybe the third most important thing we could do is use AI ourselves for our development organization. maybe the third most important thing we could do is use ai ourselves for our development organization If we do that and we execute that and we get Diego should comment on this. if we do that and we execute that and we get diego should comment on this If we get the unlock that we think might be possible, the entirety of our company will accelerate. if we get the unlock that we think might be possible the entirety of our company will accelerate I think we do all those things, and we're going to create a lot of shareholder value. i think we do all those things and we're going to create a lot of shareholder value

Speaker 6: Yeah. I mean, just on the modeling side, it's very early. I would say right now our approach to AI, as Mike hinted at, is more on an investment side, rolling it out to the development organization, ensuring we're investing in those tools and capabilities before we see the productivity gains. Right now, we're more on the investment cycle. As we think about how it's going to impact the revenue and gross margin model into the future, it's still too early for me to comment on that yet. Yeah. yeah I mean, just on the modeling side, it's very early. i mean just on the modeling side it's very early I would say right now our approach to AI, as Mike hinted at, is more on an investment side, rolling it out to the development organization, ensuring we're investing in those tools and capabilities before we see the productivity gains. i would say right now our approach to ai as mike hinted at is more on an investment side rolling it out to the development organization ensuring we're investing in those tools and capabilities before we see the productivity gains Right now, we're more on the investment cycle. right now we're more on the investment cycle As we think about how it's going to impact the revenue and gross margin model into the future, it's still too early for me to comment on that yet. as we think about how it's going to impact the revenue and gross margin model into the future it's still too early for me to comment on that yet

Speaker 2: Great. Thank you very much. Adam Hotchkiss with Goldman Sachs. I'd love to tag on to the last question and ask it in a little bit of a different way. You're launching a significant number of new products. This is obviously a completely new time for the company. Your win rates continue to be really impressive and improving. When we think about that part of the market that is still living on these legacy and antiquated systems, and you bring all of these new products to market, and that innovation gap relative to those legacy systems seemingly is accelerating, what have you been observing in your prospect conversations around their willingness to move into the cloud and be with Guidewire today, maybe versus where we were one to two years ago? Great. great Thank you very much. thank you very much Adam Hotchkiss with Goldman Sachs. adam hotchkiss with goldman sachs I'd love to tag on to the last question and ask it in a little bit of a different way. i'd love to tag on to the last question and ask it in a little bit of a different way You're launching a significant number of new products. you're launching a significant number of new products This is obviously a completely new time for the company. this is obviously a completely new time for the company Your win rates continue to be really impressive and improving. your win rates continue to be really impressive and improving When we think about that part of the market that is still living on these legacy and antiquated systems, and you bring all of these new products to market, and that innovation gap relative to those legacy systems seemingly is accelerating, what have you been observing in your prospect conversations around their willingness to move into the cloud and be with Guidewire today, maybe versus where we were one to two years ago? when we think about that part of the market that is still living on these legacy and antiquated systems and you bring all of these new products to market and that innovation gap relative to those legacy systems seemingly is accelerating what have you been observing in your prospect conversations around their willingness to move into the cloud and be with guidewire today maybe versus where we were one to two years ago

Speaker 3: One of the things that I've noticed definitely in a lot of prospect conversations, because of some of the new capabilities that we're talking about, like PricingCenter as an example, it's a much easier entry point for them to work with us rather than thinking about the totality of moving all the way to PolicyCenter, which I don't mean for that to sound truly as massive as it might. It really is a significant lift for them to think about even for perhaps a small line of business. Just that alone is a major decision for a carrier to make, and it's a decision point that doesn't come up terribly frequently. One of the things that I've noticed definitely in a lot of prospect conversations, because of some of the new capabilities that we're talking about, like PricingCenter as an example, it's a much easier entry point for them to work with us rather than thinking about the totality of moving all the way to PolicyCenter, which I don't mean for that to sound truly as massive as it might. one of the things that i've noticed definitely in a lot of prospect conversations because of some of the new capabilities that we're talking about like pricingcenter as an example it's a much easier entry point for them to work with us rather than thinking about the totality of moving all the way to policycenter which i don't mean for that to sound truly as massive as it might It really is a significant lift for them to think about even for perhaps a small line of business. it really is a significant lift for them to think about even for perhaps a small line of business Just that alone is a major decision for a carrier to make, and it's a decision point that doesn't come up terribly frequently. just that alone is a major decision for a carrier to make and it's a decision point that doesn't come up terribly frequently The thing that I like so much about PricingCenter and UnderwritingCenter, people can start to work with us around much smaller and more narrow use cases, perhaps starting out with particular lines of business, and then start to see what that experience is like. Of course, Paige was mentioning, we have spoken about it on Mainstage too. PricingCenter and UnderwritingCenter don't require InsuranceSuite to sit under them. We think that it's a significantly better experience, and there's a lot more that we can do leveraging the entire capabilities of InsuranceSuite. I think those, to me, are some really interesting ways about starting to think about working with carriers in smaller steps rather than expecting them to make a full decision to move straight away from a mainframe as an example. The thing that I like so much about PricingCenter and UnderwritingCenter, people can start to work with us around much smaller and more narrow use cases, perhaps starting out with particular lines of business, and then start to see what that experience is like. the thing that i like so much about pricingcenter and underwritingcenter people can start to work with us around much smaller and more narrow use cases perhaps starting out with particular lines of business and then start to see what that experience is like Of course, Paige was mentioning, we have spoken about it on Mainstage too. of course paige was mentioning we have spoken about it on mainstage too PricingCenter and UnderwritingCenter don't require InsuranceSuite to sit under them. pricingcenter and underwritingcenter don't require insurancesuite to sit under them We think that it's a significantly better experience, and there's a lot more that we can do leveraging the entire capabilities of InsuranceSuite. we think that it's a significantly better experience and there's a lot more that we can do leveraging the entire capabilities of insurancesuite I think those, to me, are some really interesting ways about starting to think about working with carriers in smaller steps rather than expecting them to make a full decision to move straight away from a mainframe as an example. i think those to me are some really interesting ways about starting to think about working with carriers in smaller steps rather than expecting them to make a full decision to move straight away from a mainframe as an example

Speaker 9: I'll add one thing to that. If we zoom out from the product set for a second and think about the seat that the decision makers are sitting in inside of carriers, the pressure on them has amplified quite a bit. Some of it's very unstructured in the way it's come at them from a get a hurry up and go after agentic architecture, hurry up and deploy agents. What I'll say is in the conversations driving the customers and the very real condition right now is the distance between winners and losers is both increasing in the gap. The pace at which that gap is created is very real. Pricing is probably first and foremost amongst those.The idea of sweating the asset and kicking the can down the road, that's really still very much a conversation we have to have and navigate for business case and prioritization and sequence. The pressure to act is increasing more so than I've seen in the past 20 years. I'll add one thing to that. i'll add one thing to that If we zoom out from the product set for a second and think about the seat that the decision makers are sitting in inside of carriers, the pressure on them has amplified quite a bit. if we zoom out from the product set for a second and think about the seat that the decision makers are sitting in inside of carriers the pressure on them has amplified quite a bit Some of it's very unstructured in the way it's come at them from a get a hurry up and go after agentic architecture, hurry up and deploy agents. some of it's very unstructured in the way it's come at them from a get a hurry up and go after agentic architecture hurry up and deploy agents What I'll say is in the conversations driving the customers and the very real condition right now is the distance between winners and losers is both increasing in the gap. what i'll say is in the conversations driving the customers and the very real condition right now is the distance between winners and losers is both increasing in the gap The pace at which that gap is created is very real. the pace at which that gap is created is very real Pricing is probably first and foremost amongst those. pricing is probably first and foremost amongst those The idea of sweating the asset and kicking the can down the road, that's really still very much a conversation we have to have and navigate for business case and prioritization and sequence. the idea of sweating the asset and kicking the can down the road that's really still very much a conversation we have to have and navigate for business case and prioritization and sequence The pressure to act is increasing more so than I've seen in the past 20 years. the pressure to act is increasing more so than i've seen in the past 20 years

Speaker 8: Thanks, everyone. Ken Wong, Oppenheimer. Question for Diego, one for John. Mike, both you and Diego characterize this Connections as being one of the biggest product focus Connections you guys have had in a while. Yet on stage earlier today, Diego, you mentioned how this was just an appetizer. As you look towards the announcements next year, it's going to be much bigger. I guess are you able to elaborate on that? For John, you mentioned more financial progress with expansions than migrations. I guess how much of that is just a lot of the migrations are kind of recent big wins and there's a lag in terms of the financial impact? Or is it just the expansion activity has just been so good? Thanks, everyone. thanks everyone Ken Wong, Oppenheimer. ken wong oppenheimer Question for Diego, one for John. question for diego one for john Mike, both you and Diego characterize this Connections as being one of the biggest product focus Connections you guys have had in a while. mike both you and diego characterize this connections as being one of the biggest product focus connections you guys have had in a while Yet on stage earlier today, Diego, you mentioned how this was just an appetizer. yet on stage earlier today diego you mentioned how this was just an appetizer As you look towards the announcements next year, it's going to be much bigger. as you look towards the announcements next year it's going to be much bigger I guess are you able to elaborate on that? i guess are you able to elaborate on that For John, you mentioned more financial progress with expansions than migrations. for john you mentioned more financial progress with expansions than migrations I guess how much of that is just a lot of the migrations are kind of recent big wins and there's a lag in terms of the financial impact? i guess how much of that is just a lot of the migrations are kind of recent big wins and there's a lag in terms of the financial impact Or is it just the expansion activity has just been so good? or is it just the expansion activity has just been so good

Speaker 4: Of course, we're going to tell you now everything we're launching next year. It's exactly how these things work. What I was trying to convey is that we've been working for many years in enabling the infrastructure. There is a lot of work that you do under the water that you don't see, and that is critical, especially when you think in terms of digital. Digital as an aspect of a library, as an aspect of infrastructure to deploy, as an aspect of infrastructure to monitor the deployment, infrastructure to monitor the service of the deployment. There are all those kinds of things that you do once, and you need to do it in a way that is resilient for scale. Of course, we're going to tell you now everything we're launching next year. of course we're going to tell you now everything we're launching next year It's exactly how these things work. it's exactly how these things work What I was trying to convey is that we've been working for many years in enabling the infrastructure. what i was trying to convey is that we've been working for many years in enabling the infrastructure There is a lot of work that you do under the water that you don't see, and that is critical, especially when you think in terms of digital. there is a lot of work that you do under the water that you don't see and that is critical especially when you think in terms of digital Digital as an aspect of a library, as an aspect of infrastructure to deploy, as an aspect of infrastructure to monitor the deployment, infrastructure to monitor the service of the deployment. digital as an aspect of a library as an aspect of infrastructure to deploy as an aspect of infrastructure to monitor the deployment infrastructure to monitor the service of the deployment There are all those kinds of things that you do once, and you need to do it in a way that is resilient for scale. there are all those kinds of things that you do once and you need to do it in a way that is resilient for scale When you work on that at the beginning, it doesn't really show because at the same time, you need to build the first app or the first capability on top of this infrastructure. Typically, when you do that as a project, you can cut a lot of corners and just focus on delivering quickly the capability. When you do that as a platform, you basically need to make sure that you do all the things that, as I said, they are not as sexy, but they are the things that then enable you to grow from or grow or stay, grow the cogs or grow the percentage of the cogs. All those things have been done across a few years, and you didn't see it, but now all these are coming to fruition. When you work on that at the beginning, it doesn't really show because at the same time, you need to build the first app or the first capability on top of this infrastructure. when you work on that at the beginning it doesn't really show because at the same time you need to build the first app or the first capability on top of this infrastructure Typically, when you do that as a project, you can cut a lot of corners and just focus on delivering quickly the capability. typically when you do that as a project you can cut a lot of corners and just focus on delivering quickly the capability When you do that as a platform, you basically need to make sure that you do all the things that, as I said, they are not as sexy, but they are the things that then enable you to grow from or grow or stay, grow the cogs or grow the percentage of the cogs. when you do that as a platform you basically need to make sure that you do all the things that as i said they are not as sexy but they are the things that then enable you to grow from or grow or stay grow the cogs or grow the percentage of the cogs All those things have been done across a few years, and you didn't see it, but now all these are coming to fruition. all those things have been done across a few years and you didn't see it but now all these are coming to fruition In the last year, when we started to build new stuff, we started to get all the benefit of the infrastructure serving us. Even the acquisition of Quanti, John made it a point that it was running on GWCP almost on the point of acquisition, and that was because GWCP had, we had to build some infrastructure and some capability that then becomes very useful to kind of do something fairly different than what it was originally, how to say, envisioned for. When I laugh today and say this is just the beginning, it's because depending on the decision that Jeff was alluding to, we can invest more. If we make a decision of investing more, assuming that we have the right target on investing more, that we have good ideas, assuming we have good ideas, now we start to have the financial support, and we have an infrastructure that will enable us to accelerate in that direction. My comment was on a readiness of everything that we've done is unlocking an opportunity that we didn't have before because before, we needed to make sure that the infrastructure was, first of all, capable to support what we needed to support. In the last year, when we started to build new stuff, we started to get all the benefit of the infrastructure serving us. in the last year when we started to build new stuff we started to get all the benefit of the infrastructure serving us Even the acquisition of Quanti, John made it a point that it was running on GWCP almost on the point of acquisition, and that was because GWCP had, we had to build some infrastructure and some capability that then becomes very useful to kind of do something fairly different than what it was originally, how to say, envisioned for. even the acquisition of quanti john made it a point that it was running on gwcp almost on the point of acquisition and that was because gwcp had we had to build some infrastructure and some capability that then becomes very useful to kind of do something fairly different than what it was originally how to say envisioned for When I laugh today and say this is just the beginning, it's because depending on the decision that Jeff was alluding to, we can invest more. when i laugh today and say this is just the beginning it's because depending on the decision that jeff was alluding to we can invest more If we make a decision of investing more, assuming that we have the right target on investing more, that we have good ideas, assuming we have good ideas, now we start to have the financial support, and we have an infrastructure that will enable us to accelerate in that direction. if we make a decision of investing more assuming that we have the right target on investing more that we have good ideas assuming we have good ideas now we start to have the financial support and we have an infrastructure that will enable us to accelerate in that direction My comment was on a readiness of everything that we've done is unlocking an opportunity that we didn't have before because before, we needed to make sure that the infrastructure was, first of all, capable to support what we needed to support. my comment was on a readiness of everything that we've done is unlocking an opportunity that we didn't have before because before we needed to make sure that the infrastructure was first of all capable to support what we needed to support

Speaker 7: I'll make a quick comment on that. Then I'll get to the other questions. The other one is underwriting in itself. The comment around the appetizer was really around UnderwritingCenter. UnderwritingCenter, there are going to be multiple pathways to get to the capabilities that make up UnderwritingCenter. There are going to be some people like me who might skip straight to dessert. Some people might actually just eat the salad. For commercial carriers, there are going to be multiple ways to consume UnderwritingCenter. If we think about between now and next year, us making all those components thread thoughtfully together and open those pathways, as Christina Colby said, some more bite-sized chunks or some more one course at a time type chunks to get on the pattern. I'll make a quick comment on that. i'll make a quick comment on that Then I'll get to the other questions. then i'll get to the other questions The other one is underwriting in itself. the other one is underwriting in itself The comment around the appetizer was really around UnderwritingCenter. the comment around the appetizer was really around underwritingcenter UnderwritingCenter, there are going to be multiple pathways to get to the capabilities that make up UnderwritingCenter. underwritingcenter there are going to be multiple pathways to get to the capabilities that make up underwritingcenter There are going to be some people like me who might skip straight to dessert. there are going to be some people like me who might skip straight to dessert Some people might actually just eat the salad. some people might actually just eat the salad For commercial carriers, there are going to be multiple ways to consume UnderwritingCenter. for commercial carriers there are going to be multiple ways to consume underwritingcenter If we think about between now and next year, us making all those components thread thoughtfully together and open those pathways, as Christina Colby said, some more bite-sized chunks or some more one course at a time type chunks to get on the pattern. if we think about between now and next year us making all those components thread thoughtfully together and open those pathways as christina colby said some more bite-sized chunks or some more one course at a time type chunks to get on the pattern Back to the expansion piece, the math around it really is more around pure expansion, not having anything to do with the large migrations. If you look at the number of customers around the world that are really on the larger end of the market and think about how many of them are single X centers, ClaimCenter or PolicyCenter, a few just BillingCenter, but Policy and Billing oftentimes in concert, but where there's still a lot of estate to go by either line of business, geography, or X center. The thing that is becoming more and more true in these conversations, two things, sorry. The first thing that's becoming more and more true is because of the platform and data and things like ProNavigator, the ability to thread decisions through the enterprise and run the enterprise estate on the platform.Putting more freight on the platform is really starting to prove out in the business case. That idea of a customer being full suite rather than singular product is starting to make more sense in that conversation. Sometimes it's a migration, Ken, that opens up that expansion. Sometimes it's expansion to cloud and then the migration later. All of those really are kind of really truly new estate for us. I'm excited to continue to go after that because I think that's still yet a relatively large estate. Back to the expansion piece, the math around it really is more around pure expansion, not having anything to do with the large migrations. back to the expansion piece the math around it really is more around pure expansion not having anything to do with the large migrations If you look at the number of customers around the world that are really on the larger end of the market and think about how many of them are single X centers, ClaimCenter or PolicyCenter, a few just BillingCenter, but Policy and Billing oftentimes in concert, but where there's still a lot of estate to go by either line of business, geography, or X center. if you look at the number of customers around the world that are really on the larger end of the market and think about how many of them are single x centers claimcenter or policycenter a few just billingcenter but policy and billing oftentimes in concert but where there's still a lot of estate to go by either line of business geography or x center The thing that is becoming more and more true in these conversations, two things, sorry. the thing that is becoming more and more true in these conversations two things sorry The first thing that's becoming more and more true is because of the platform and data and things like ProNavigator, the ability to thread decisions through the enterprise and run the enterprise estate on the platform. the first thing that's becoming more and more true is because of the platform and data and things like pronavigator the ability to thread decisions through the enterprise and run the enterprise estate on the platform Putting more freight on the platform is really starting to prove out in the business case. putting more freight on the platform is really starting to prove out in the business case That idea of a customer being full suite rather than singular product is starting to make more sense in that conversation. that idea of a customer being full suite rather than singular product is starting to make more sense in that conversation Sometimes it's a migration, Ken, that opens up that expansion. sometimes it's a migration ken that opens up that expansion Sometimes it's expansion to cloud and then the migration later. sometimes it's expansion to cloud and then the migration later All of those really are kind of really truly new estate for us. all of those really are kind of really truly new estate for us I'm excited to continue to go after that because I think that's still yet a relatively large estate. i'm excited to continue to go after that because i think that's still yet a relatively large estate

Speaker 5: Thank you. Dylan Becker with William Blair. Maybe for Diego or John to start. Obviously, we're layering on more product. We're talking about kind of more value accruing to the customer base. On the implementation side, how are you thinking about automating more components of that process, creating and tailoring maybe a standardized roadmap to make that easier where customers realize value faster? That's one. Mike, for you on the slide around kind of the aggregate mix or share of the dollar and spend, I think it's like 25% that goes to administrative cost. Within that, where do you see kind of the biggest segments of opportunities if we're looking at it in a $3 trillion overall base? Minor improvements can be massively valuable. Thank you. thank you Dylan Becker with William Blair. dylan becker with william blair Maybe for Diego or John to start. maybe for diego or john to start Obviously, we're layering on more product. obviously we're layering on more product We're talking about kind of more value accruing to the customer base. we're talking about kind of more value accruing to the customer base On the implementation side, how are you thinking about automating more components of that process, creating and tailoring maybe a standardized roadmap to make that easier where customers realize value faster? on the implementation side how are you thinking about automating more components of that process creating and tailoring maybe a standardized roadmap to make that easier where customers realize value faster That's one. that's one Mike, for you on the slide around kind of the aggregate mix or share of the dollar and spend, I think it's like 25% that goes to administrative cost. mike for you on the slide around kind of the aggregate mix or share of the dollar and spend i think it's like 25% that goes to administrative cost Within that, where do you see kind of the biggest segments of opportunities if we're looking at it in a $3 trillion overall base? within that where do you see kind of the biggest segments of opportunities if we're looking at it in a $3 trillion overall base Minor improvements can be massively valuable. minor improvements can be massively valuable

Speaker 4: OK. I'll take a product angle or a technology angle. When we talk about APD, when we talk about digital, when we talk about all those things, you have to go back and look at what was the bigger cost of implementing Guidewire in general before cloud. The biggest cost was implementing integration, big chunk. There was, of course, implementing the product model. Then it was implementing digital. If you look at these three things, we came with APD. We came with a new integration framework that does not require GOSTO anymore. We came with the JDP and the Jutro digital platform. Those three things have reduced a lot the cost of implementation, a lot of the sort of success that you've seen Guidewire having, especially on the net new deal. OK. ok I'll take a product angle or a technology angle. i'll take a product angle or a technology angle When we talk about APD, when we talk about digital, when we talk about all those things, you have to go back and look at what was the bigger cost of implementing Guidewire in general before cloud. when we talk about apd when we talk about digital when we talk about all those things you have to go back and look at what was the bigger cost of implementing guidewire in general before cloud The biggest cost was implementing integration, big chunk. the biggest cost was implementing integration big chunk There was, of course, implementing the product model. there was of course implementing the product model Then it was implementing digital. then it was implementing digital If you look at these three things, we came with APD. if you look at these three things we came with apd We came with a new integration framework that does not require GOSTO anymore. we came with a new integration framework that does not require gosto anymore We came with the JDP and the Jutro digital platform. we came with the jdp and the jutro digital platform Those three things have reduced a lot the cost of implementation, a lot of the sort of success that you've seen Guidewire having, especially on the net new deal. those three things have reduced a lot the cost of implementation a lot of the sort of success that you've seen guidewire having especially on the net new deal At some point, if you really look at our history in the last five years, the model initially was expecting us to be faster in migration and not so, how to say, successful on net new deal. The net new deal started to come kind of at some point even surprise us a little bit. The reason they surprised us was because of those innovations on digital, on APD, and on the integration. We have today a product that is way more efficient to be implemented compared to what it was. With that said, with Gen AI and with the technology that is coming, we think that we're just scratching the surface on that, especially on things that typically require a lot of manpower for things that are fairly, fairly pedestrian. Like, oh, you need to refactor X, Y, Z. At some point, if you really look at our history in the last five years, the model initially was expecting us to be faster in migration and not so, how to say, successful on net new deal. at some point if you really look at our history in the last five years the model initially was expecting us to be faster in migration and not so how to say successful on net new deal The net new deal started to come kind of at some point even surprise us a little bit. the net new deal started to come kind of at some point even surprise us a little bit The reason they surprised us was because of those innovations on digital, on APD, and on the integration. the reason they surprised us was because of those innovations on digital on apd and on the integration We have today a product that is way more efficient to be implemented compared to what it was. we have today a product that is way more efficient to be implemented compared to what it was With that said, with Gen AI and with the technology that is coming, we think that we're just scratching the surface on that, especially on things that typically require a lot of manpower for things that are fairly, fairly pedestrian. with that said with gen ai and with the technology that is coming we think that we're just scratching the surface on that especially on things that typically require a lot of manpower for things that are fairly fairly pedestrian Like, oh, you need to refactor X, Y, Z. like oh you need to refactor x y z You need to adjust this implementation to modernize it in some aspect and so on. I think that it's a huge opportunity for us to continue to eventually evolve a product that will also have the ambition to go downstream. You saw the initial slide from Mike on Tier 1 to the product was originally kind of conceived for Tier 1, 2/3. Now we start to have some economy of scale that we can start to consider some of the specific configuration to go to Tier 4 and even further down. 100% what you're saying, we have seen improvement. The last thing I want to close is what we talked on yesterday about Jutro Studio is one more of this evolution of saying, hey, you don't need to implement InsuranceSuite and then implement digital. We're going to go into a direction in which you do one implementation and that implementation serves both master. That, again, is in the direction of speeding up and accelerating implementation. You need to adjust this implementation to modernize it in some aspect and so on. you need to adjust this implementation to modernize it in some aspect and so on I think that it's a huge opportunity for us to continue to eventually evolve a product that will also have the ambition to go downstream. i think that it's a huge opportunity for us to continue to eventually evolve a product that will also have the ambition to go downstream You saw the initial slide from Mike on Tier 1 to the product was originally kind of conceived for Tier 1, 2/ 3. you saw the initial slide from mike on tier 1 to the product was originally kind of conceived for tier 1 2/ 3 Now we start to have some economy of scale that we can start to consider some of the specific configuration to go to Tier 4 and even further down. 100% what you're saying, we have seen improvement. now we start to have some economy of scale that we can start to consider some of the specific configuration to go to tier 4 and even further down 100% what you're saying we have seen improvement The last thing I want to close is what we talked on yesterday about Jutro Studio is one more of this evolution of saying, hey, you don't need to implement InsuranceSuite and then implement digital. the last thing i want to close is what we talked on yesterday about jutro studio is one more of this evolution of saying hey you don't need to implement insurancesuite and then implement digital We're going to go into a direction in which you do one implementation and that implementation serves both master. we're going to go into a direction in which you do one implementation and that implementation serves both master That, again, is in the direction of speeding up and accelerating implementation. that again is in the direction of speeding up and accelerating implementation

Speaker 3: I'll just add to that maybe from a project standpoint. I think if you look at a number of the migration, well, the majority of the migration projects to cloud that have happened in the past few years, a lot of the time is spent truly in heavy lifting. A lot of the things that Diego was talking about, you're not necessarily even scratching the surface. It could be sort of removing a lot of the habits of the past and creating a meaningful test harness that helps you to be able to take advantage of things going forward. I would say very similar to the patterns when someone would have actually been migrating from one version of on-prem to another version of on-prem, but it's the last one. People put the effort into that. I'll just add to that maybe from a project standpoint. i'll just add to that maybe from a project standpoint I think if you look at a number of the migration, well, the majority of the migration projects to cloud that have happened in the past few years, a lot of the time is spent truly in heavy lifting. i think if you look at a number of the migration well the majority of the migration projects to cloud that have happened in the past few years a lot of the time is spent truly in heavy lifting A lot of the things that Diego was talking about, you're not necessarily even scratching the surface. a lot of the things that diego was talking about you're not necessarily even scratching the surface It could be sort of removing a lot of the habits of the past and creating a meaningful test harness that helps you to be able to take advantage of things going forward. it could be sort of removing a lot of the habits of the past and creating a meaningful test harness that helps you to be able to take advantage of things going forward I would say very similar to the patterns when someone would have actually been migrating from one version of on-prem to another version of on-prem, but it's the last one. i would say very similar to the patterns when someone would have actually been migrating from one version of on-prem to another version of on-prem but it's the last one People put the effort into that. people put the effort into that In addition to a lot of the things that Diego was describing relative to now being able to take advantage of the new features, we have been investing to take out a lot of that just effort and the heavy lifting, which caused things to be more emphasized around sort of this concept of lift and shift. The idea we're going to move it to cloud, then we can start to adopt the new features later, specifically by being able to take out a lot of the testing effort, which in some cases I think can take maybe 30% to even 40% of a project's time and perhaps not even necessarily get to the full surface of all of the application capability. Being able to do that now means that you can start to think about the adoption of all of the capabilities that Diego was describing. In addition to a lot of the things that Diego was describing relative to now being able to take advantage of the new features, we have been investing to take out a lot of that just effort and the heavy lifting, which caused things to be more emphasized around sort of this concept of lift and shift. in addition to a lot of the things that diego was describing relative to now being able to take advantage of the new features we have been investing to take out a lot of that just effort and the heavy lifting which caused things to be more emphasized around sort of this concept of lift and shift The idea we're going to move it to cloud, then we can start to adopt the new features later, specifically by being able to take out a lot of the testing effort, which in some cases I think can take maybe 30% to even 40% of a project's time and perhaps not even necessarily get to the full surface of all of the application capability. the idea we're going to move it to cloud then we can start to adopt the new features later specifically by being able to take out a lot of the testing effort which in some cases i think can take maybe 30% to even 40% of a project's time and perhaps not even necessarily get to the full surface of all of the application capability Being able to do that now means that you can start to think about the adoption of all of the capabilities that Diego was describing. being able to do that now means that you can start to think about the adoption of all of the capabilities that diego was describing Historically, those have been things that people did as sort of a fast follow-on, if you will. That presents the question that you also asked, which is, is there a standard value map that talks about how do you prioritize those things? We put a lot of work into identifying what we think those can be potentially for any carrier. There genuinely is no standard that we've been able to determine, which I think is actually a great thing. It allows us to be able to decide those aspects that we're going to transform are going to deliver the most immediate business value based upon that specific carrier's priorities. It could be, as Diego was describing with Jutro, much better digital experiences and something that helps them to get closer to their customer so much faster. It could be something that they're looking to actually improve bottom line and looking at loss ratio instead. At least by having maybe some consistent possibilities for measures, we can start to talk about benchmarks that we've seen elsewhere. It really does need to be something that we tailor. It's actually a huge advantage that we get to tailor it. I know you had then a. Historically, those have been things that people did as sort of a fast follow-on, if you will. historically those have been things that people did as sort of a fast follow-on if you will That presents the question that you also asked, which is, is there a standard value map that talks about how do you prioritize those things? that presents the question that you also asked which is is there a standard value map that talks about how do you prioritize those things We put a lot of work into identifying what we think those can be potentially for any carrier. we put a lot of work into identifying what we think those can be potentially for any carrier There genuinely is no standard that we've been able to determine, which I think is actually a great thing. there genuinely is no standard that we've been able to determine which i think is actually a great thing It allows us to be able to decide those aspects that we're going to transform are going to deliver the most immediate business value based upon that specific carrier's priorities. it allows us to be able to decide those aspects that we're going to transform are going to deliver the most immediate business value based upon that specific carrier's priorities It could be, as Diego was describing with Jutro, much better digital experiences and something that helps them to get closer to their customer so much faster. it could be as diego was describing with jutro much better digital experiences and something that helps them to get closer to their customer so much faster It could be something that they're looking to actually improve bottom line and looking at loss ratio instead. it could be something that they're looking to actually improve bottom line and looking at loss ratio instead At least by having maybe some consistent possibilities for measures, we can start to talk about benchmarks that we've seen elsewhere. at least by having maybe some consistent possibilities for measures we can start to talk about benchmarks that we've seen elsewhere It really does need to be something that we tailor. it really does need to be something that we tailor It's actually a huge advantage that we get to tailor it. it's actually a huge advantage that we get to tailor it I know you had then a. i know you had then a

Speaker 9: Yeah. I'll give you a quick answer to the second half of your question. Think about it like, and this is super high level, but let's get 100 basis points out of claims processing without degrading customer experience, maybe even improving it. Let's get 100 basis points out of the expenses associated with underwriting and accepting and managing submissions and choosing which risks to take. Hopefully, we do a better job selecting the right risks. Both of those things are completely reasonable given the state of the platform and the state of the technology that we see right now. It's not going to happen next week. If you get 200 basis points out of that slide, it's pretty impactful. Yeah. yeah I'll give you a quick answer to the second half of your question. yeah i'll give you a quick answer to the second half of your question Think about it like, and this is super high level, but let's get 100 basis points out of claims processing without degrading customer experience, maybe even improving it. think about it like and this is super high level but let's get 100 basis points out of claims processing without degrading customer experience maybe even improving it Let's get 100 basis points out of the expenses associated with underwriting and accepting and managing submissions and choosing which risks to take. let's get 100 basis points out of the expenses associated with underwriting and accepting and managing submissions and choosing which risks to take Hopefully, we do a better job selecting the right risks. hopefully we do a better job selecting the right risks Both of those things are completely reasonable given the state of the platform and the state of the technology that we see right now. both of those things are completely reasonable given the state of the platform and the state of the technology that we see right now It's not going to happen next week. it's not going to happen next week If you get 200 basis points out of that slide, it's pretty impactful. if you get 200 basis points out of that slide it's pretty impactful

Speaker 1: Aaron Kimson with Citizens. Thank you guys for the question. On UnderwritingCenter, is it something where you envision you'll start down market and then prove it out like the cloud? Or something where there are 10-12 other vendors in that space today all saying they have a workbench, whether they really do or they don't? You're going to go straight to your larger customers there. Aaron Kimson with Citizens. aaron kimson with citizens Thank you guys for the question. thank you guys for the question On UnderwritingCenter, is it something where you envision you'll start down market and then prove it out like the cloud? on underwritingcenter is it something where you envision you'll start down market and then prove it out like the cloud Or something where there are 10 - 12 other vendors in that space today all saying they have a workbench, whether they really do or they don't? or something where there are 10 - 12 other vendors in that space today all saying they have a workbench whether they really do or they don't You're going to go straight to your larger customers there. you're going to go straight to your larger customers there

Speaker 9: We're going to go to the customers that want to work with us there. I think we're not going to have any trouble finding one or two or three or 10. There's probably 100 that are all looking at this in one way or another. I want to be clear. Our goal isn't to say we're going to deliver the workbench because people think of that as the structure. Our goal is to find the right customers to work with to deliver the agentic system that facilitates underwriting in the insurance industry. In the process, I want to establish UnderwritingCenter as the backbone for doing that. I think up market, down market, we're going to find the sweet spot. We've got so many people interested in talking to us already. It's been less than 24 hours. We're going to find some good customers to work with here. We're going to go to the customers that want to work with us there. we're going to go to the customers that want to work with us there I think we're not going to have any trouble finding one or two or three or 10. i think we're not going to have any trouble finding one or two or three or 10 There's probably 100 that are all looking at this in one way or another. there's probably 100 that are all looking at this in one way or another I want to be clear. i want to be clear Our goal isn't to say we're going to deliver the workbench because people think of that as the structure. our goal isn't to say we're going to deliver the workbench because people think of that as the structure Our goal is to find the right customers to work with to deliver the agentic system that facilitates underwriting in the insurance industry. our goal is to find the right customers to work with to deliver the agentic system that facilitates underwriting in the insurance industry In the process, I want to establish UnderwritingCenter as the backbone for doing that. in the process i want to establish underwritingcenter as the backbone for doing that I think up market, down market, we're going to find the sweet spot. i think up market down market we're going to find the sweet spot We've got so many people interested in talking to us already. we've got so many people interested in talking to us already It's been less than 24 hours. it's been less than 24 hours We're going to find some good customers to work with here. we're going to find some good customers to work with here

Speaker 4: I think line of business and interaction with the brokerage community is going to be much more of a driver than size. I think line of business and interaction with the brokerage community is going to be much more of a driver than size. i think line of business and interaction with the brokerage community is going to be much more of a driver than size

Speaker 10: Thanks, team. Mohit Gogia with Jefferies. I wanted to just unpack the growth algorithm for you over the next few years. I think expansion seems like obviously will be a major part of that. As you think about expanding your share of the customer wallet, I was speaking to one of your customers on the show floor. I was reminded that you are fortunate to have an end market that is flush with cash. I was told that if a strategic partner. Thanks, team. thanks team Mohit Gogia with Jefferies. mohit gogia with jefferies I wanted to just unpack the growth algorithm for you over the next few years. i wanted to just unpack the growth algorithm for you over the next few years I think expansion seems like obviously will be a major part of that. i think expansion seems like obviously will be a major part of that As you think about expanding your share of the customer wallet, I was speaking to one of your customers on the show floor. as you think about expanding your share of the customer wallet i was speaking to one of your customers on the show floor I was reminded that you are fortunate to have an end market that is flush with cash. i was reminded that you are fortunate to have an end market that is flush with cash I was told that if a strategic partner. i was told that if a strategic partner

Speaker 9: Who is that? Who is that? who is that

Speaker 10: I was told that if a strategic partner like Guidewire can create value, there is always cash that can be spent. That will drive your growth. Cloud was a big piece of expanding that customer share of the wallet. As you look towards the next few years, how you're thinking about new products, organic or inorganic, I'm assuming there is an organic price increase that is part of the equation too. There is AI monetization, which as software investors, there is some sort of skepticism around how much can different software vendors monetize AI. Just help me understand as to how you think about expanding that share of the wallet. I was told that if a strategic partner like Guidewire can create value, there is always cash that can be spent. i was told that if a strategic partner like guidewire can create value there is always cash that can be spent That will drive your growth. that will drive your growth Cloud was a big piece of expanding that customer share of the wallet. cloud was a big piece of expanding that customer share of the wallet As you look towards the next few years, how you're thinking about new products, organic or inorganic, I'm assuming there is an organic price increase that is part of the equation too. as you look towards the next few years how you're thinking about new products organic or inorganic i'm assuming there is an organic price increase that is part of the equation too There is AI monetization, which as software investors, there is some sort of skepticism around how much can different software vendors monetize AI. there is ai monetization which as software investors there is some sort of skepticism around how much can different software vendors monetize ai Just help me understand as to how you think about expanding that share of the wallet. just help me understand as to how you think about expanding that share of the wallet

Speaker 4: I'll talk about expansion of share just for a second, and then monetization of AI, you guys can talk about it. On the expansion of wallet, this is something that in the slide that I showed that we're moving up the strategic roadmapping agenda and the strategic intention agenda from applications to CIO to COO to CFO to CEO to board. Right at the time when that pressure is coming in the exact reverse order at a very nice time for us, we think working with customers in a way to unlock some of these, the beauty of some of these more ambiguous problems to solve, like UnderwritingCenter, is if we can solve them, there's a lot more value to create, and there is a lot more value to capture. This is not an intensely competed procurement-driven price speed-up conversation. There's one pathway to PolicyCenter. I'll talk about expansion of share just for a second, and then monetization of AI, you guys can talk about it. i'll talk about expansion of share just for a second and then monetization of ai you guys can talk about it On the expansion of wallet, this is something that in the slide that I showed that we're moving up the strategic roadmapping agenda and the strategic intention agenda from applications to CIO to COO to CFO to CEO to board. on the expansion of wallet this is something that in the slide that i showed that we're moving up the strategic roadmapping agenda and the strategic intention agenda from applications to cio to coo to cfo to ceo to board Right at the time when that pressure is coming in the exact reverse order at a very nice time for us, we think working with customers in a way to unlock some of these, the beauty of some of these more ambiguous problems to solve, like UnderwritingCenter, is if we can solve them, there's a lot more value to create, and there is a lot more value to capture. right at the time when that pressure is coming in the exact reverse order at a very nice time for us we think working with customers in a way to unlock some of these the beauty of some of these more ambiguous problems to solve like underwritingcenter is if we can solve them there's a lot more value to create and there is a lot more value to capture This is not an intensely competed procurement-driven price speed-up conversation. this is not an intensely competed procurement-driven price speed-up conversation There's one pathway to PolicyCenter. there's one pathway to policycenter Pathway to PolicyCenter is we're replacing a policy admin system. This is a really big thing to solve for, and it has its kind of own cycle. When we start to solve for how do we enter and exit markets better, what's the risk selection and pricing and underwriting capabilities, you need to do that to unlock value from expert underwriting and pathways to market. That's a whole different conversation. Yes, it will be price. There will be a price discovery. Yes, there will be a negotiation on it. We're solving for the very large side of that dollar that Mike talked about, which is the indemnity and exposure conversation. That's a conversation that we have to learn to navigate better, but we have pathways now to capture far more value. I'd like to know who's flush with cash. The simple fact is one of the things we will go after on this is there are a lot of categories that they're already spending in, and we're in a very unique spot to go after those in a very efficient way, efficient for us from a capture perspective, but also efficient for them from a standpoint of not satisfying a dozen different companies to solve 12 different problems. Pathway to PolicyCenter is we're replacing a policy admin system. pathway to policycenter is we're replacing a policy admin system This is a really big thing to solve for, and it has its kind of own cycle. this is a really big thing to solve for and it has its kind of own cycle When we start to solve for how do we enter and exit markets better, what's the risk selection and pricing and underwriting capabilities, you need to do that to unlock value from expert underwriting and pathways to market. when we start to solve for how do we enter and exit markets better what's the risk selection and pricing and underwriting capabilities you need to do that to unlock value from expert underwriting and pathways to market That's a whole different conversation. that's a whole different conversation Yes, it will be price. yes it will be price There will be a price discovery. there will be a price discovery Yes, there will be a negotiation on it. yes there will be a negotiation on it We're solving for the very large side of that dollar that Mike talked about, which is the indemnity and exposure conversation. we're solving for the very large side of that dollar that mike talked about which is the indemnity and exposure conversation That's a conversation that we have to learn to navigate better, but we have pathways now to capture far more value. that's a conversation that we have to learn to navigate better but we have pathways now to capture far more value I'd like to know who's flush with cash. i'd like to know who's flush with cash The simple fact is one of the things we will go after on this is there are a lot of categories that they're already spending in, and we're in a very unique spot to go after those in a very efficient way, efficient for us from a capture perspective, but also efficient for them from a standpoint of not satisfying a dozen different companies to solve 12 different problems. the simple fact is one of the things we will go after on this is there are a lot of categories that they're already spending in and we're in a very unique spot to go after those in a very efficient way efficient for us from a capture perspective but also efficient for them from a standpoint of not satisfying a dozen different companies to solve 12 different problems

Speaker 9: I should rehearse my answer to this. I have to be pretty, I don't know, you guys can judge me, I guess, how artful I am in responding to this. I think outside of AI, we have a tremendous growth opportunity ahead of us at Guidewire. We have to, and I think we will, successfully migrate 100% of our on-premises customer base to our cloud. We are completely committed to doing that. You saw, we're all excited about the AI features and everything else. We also develop these systems to provision them an environment, test their code base, move their code base to the cloud, help them migrate from their old product model to advanced product models. We're doing all of this work to get those customers to our cloud system. That's a growth opportunity. We have the baseline growth opportunity and the modernization potential in the industry. I should rehearse my answer to this. i should rehearse my answer to this I have to be pretty, I don't know, you guys can judge me, I guess, how artful I am in responding to this. i have to be pretty i don't know you guys can judge me i guess how artful i am in responding to this I think outside of AI, we have a tremendous growth opportunity ahead of us at Guidewire . i think outside of ai we have a tremendous growth opportunity ahead of us at guidewire We have to, and I think we will, successfully migrate 100% of our on-premises customer base to our cloud. we have to and i think we will successfully migrate 100% of our on-premises customer base to our cloud We are completely committed to doing that. we are completely committed to doing that You saw, we're all excited about the AI features and everything else. you saw we're all excited about the ai features and everything else We also develop these systems to provision them an environment, test their code base, move their code base to the cloud, help them migrate from their old product model to advanced product models. we also develop these systems to provision them an environment test their code base move their code base to the cloud help them migrate from their old product model to advanced product models We're doing all of this work to get those customers to our cloud system. we're doing all of this work to get those customers to our cloud system That's a growth opportunity. that's a growth opportunity We have the baseline growth opportunity and the modernization potential in the industry. we have the baseline growth opportunity and the modernization potential in the industry Now we have this potential in PricingCenter. We have this potential in UnderwritingCenter, even if the agentic AI comes from somebody else. I think that there is a tremendous opportunity for us to grow the company. Even underwriting investment thesis for the company right now, the AI, it is unclear. Let's say, how do we monetize that? I say basically before, I think I very logically said, hey, what if we get 100 basis points here and 100 basis points there? That kind of triples the addressable market for us. We're going after another component of the value chain in the industry that we serve that is far beyond the IT spend currently allocated to core systems. That's how I think about it. That's how we're trying to run the company. We're going to do our job. We're going to move our customer base to the cloud. We're going to win the modernization opportunity at the same win rates that we've been winning up till now, maintain 100% reference-ability, earn the trust, as Daniel said, every single time. I think that the AI potential will manifest over time. Now we have this potential in PricingCenter. now we have this potential in pricingcenter We have this potential in UnderwritingCenter, even if the agentic AI comes from somebody else. we have this potential in underwritingcenter even if the agentic ai comes from somebody else I think that there is a tremendous opportunity for us to grow the company. i think that there is a tremendous opportunity for us to grow the company Even underwriting investment thesis for the company right now, the AI, it is unclear. even underwriting investment thesis for the company right now the ai it is unclear Let's say, how do we monetize that? let's say how do we monetize that I say basically before, I think I very logically said, hey, what if we get 100 basis points here and 100 basis points there? i say basically before i think i very logically said hey what if we get 100 basis points here and 100 basis points there That kind of triples the addressable market for us. that kind of triples the addressable market for us We're going after another component of the value chain in the industry that we serve that is far beyond the IT spend currently allocated to core systems. we're going after another component of the value chain in the industry that we serve that is far beyond the it spend currently allocated to core systems That's how I think about it. that's how i think about it That's how we're trying to run the company. that's how we're trying to run the company We're going to do our job. we're going to do our job We're going to move our customer base to the cloud. we're going to move our customer base to the cloud We're going to win the modernization opportunity at the same win rates that we've been winning up till now, maintain 100% reference-ability, earn the trust, as Daniel said, every single time. we're going to win the modernization opportunity at the same win rates that we've been winning up till now maintain 100% reference-ability earn the trust as daniel said every single time I think that the AI potential will manifest over time. i think that the ai potential will manifest over time

Speaker 7: The only thing I want to add here is as we think about the targets and the financial model underpinning that, to get to the targets we outlined in FY 2028, that is still very much primarily the cloud transition story playing out and the increased acceleration that we're seeing in modernization and the fat part of the migration curve that is still very much ahead of us over the next three years. How we make that upper teens durable for a decade is kind of as PricingCenter, as UnderwritingCenter, as some of these new capabilities come into the fray. There are multiple ways that we can get to those targets in FY 2028. One of them could include none of this stuff that we're talking about today. Obviously, we're going to execute, and we believe that that will show up in the financial model before FY 2028. I just wanted to make sure that that was understood in those targets. The only thing I want to add here is as we think about the targets and the financial model underpinning that, to get to the targets we outlined in FY 2028, that is still very much primarily the cloud transition story playing out and the increased acceleration that we're seeing in modernization and the fat part of the migration curve that is still very much ahead of us over the next three years. the only thing i want to add here is as we think about the targets and the financial model underpinning that to get to the targets we outlined in fy 2028 that is still very much primarily the cloud transition story playing out and the increased acceleration that we're seeing in modernization and the fat part of the migration curve that is still very much ahead of us over the next three years How we make that upper teens durable for a decade is kind of as PricingCenter, as UnderwritingCenter, as some of these new capabilities come into the fray. how we make that upper teens durable for a decade is kind of as pricingcenter as underwritingcenter as some of these new capabilities come into the fray There are multiple ways that we can get to those targets in FY 2028. there are multiple ways that we can get to those targets in fy 2028 One of them could include none of this stuff that we're talking about today. one of them could include none of this stuff that we're talking about today Obviously, we're going to execute, and we believe that that will show up in the financial model before FY 2028. obviously we're going to execute and we believe that that will show up in the financial model before fy 2028 I just wanted to make sure that that was understood in those targets. i just wanted to make sure that that was understood in those targets

Speaker 4: Going back to my point of work that is under the water that you don't see immediately, but you will see a little bit later, we've been working a lot to make the product more, how to say, extensible in different countries. Mike did show a slide into which as long as there is one customer, the country was yellow. That is kind of a good way to mark a lot of country yellow. There is a difference between you have one customer and you own the country, so to speak. A huge direction for us of growth is still in some of those countries to sort of penetrate to a point of owning the entire country, and not in every yellow country we are in that place. Historically, the product was trustable, and it was capable to deliver what needed to be delivered. Going back to my point of work that is under the water that you don't see immediately, but you will see a little bit later, we've been working a lot to make the product more, how to say, extensible in different countries. going back to my point of work that is under the water that you don't see immediately but you will see a little bit later we've been working a lot to make the product more how to say extensible in different countries Mike did show a slide into which as long as there is one customer, the country was yellow. mike did show a slide into which as long as there is one customer the country was yellow That is kind of a good way to mark a lot of country yellow. that is kind of a good way to mark a lot of country yellow There is a difference between you have one customer and you own the country, so to speak. there is a difference between you have one customer and you own the country so to speak A huge direction for us of growth is still in some of those countries to sort of penetrate to a point of owning the entire country, and not in every yellow country we are in that place. a huge direction for us of growth is still in some of those countries to sort of penetrate to a point of owning the entire country and not in every yellow country we are in that place Historically, the product was trustable, and it was capable to deliver what needed to be delivered. historically the product was trustable and it was capable to deliver what needed to be delivered You cannot scale horizontally across all the customers. Going back to the question about cost of implementation, there was a cost of implementation that was maybe prohibitive for many customers. Now everything that we're doing from an extensibility perspective, implementation perspective, and also the fact that the pressure top-down CIO and so on is opening up doors in countries that is going to be part of our strategy. On top of that, there are a few countries that are not even yellow yet that is kind of creating that extra angle. Keep in mind, we have the best product on the market. That is sort of still a gigantic runway to sort of penetrate independently from anything else that we've been discussing in new product. You cannot scale horizontally across all the customers. you cannot scale horizontally across all the customers Going back to the question about cost of implementation, there was a cost of implementation that was maybe prohibitive for many customers. going back to the question about cost of implementation there was a cost of implementation that was maybe prohibitive for many customers Now everything that we're doing from an extensibility perspective, implementation perspective, and also the fact that the pressure top-down CIO and so on is opening up doors in countries that is going to be part of our strategy. now everything that we're doing from an extensibility perspective implementation perspective and also the fact that the pressure top-down cio and so on is opening up doors in countries that is going to be part of our strategy On top of that, there are a few countries that are not even yellow yet that is kind of creating that extra angle. on top of that there are a few countries that are not even yellow yet that is kind of creating that extra angle Keep in mind, we have the best product on the market. keep in mind we have the best product on the market That is sort of still a gigantic runway to sort of penetrate independently from anything else that we've been discussing in new product. that is sort of still a gigantic runway to sort of penetrate independently from anything else that we've been discussing in new product

Speaker 11: Hey, it's Parker Lane from Stifel here. Jeff, maybe on the financial targets you have, you talked about the investment you're going to make of the incremental gross profit dollars through 2028. Maybe zoom in on what the key priorities are there. I know Mike talked about development velocity picking up in an AI world. How do we reconcile development velocity picking up with maybe also increased investment? Is it just a matter of delivering more innovation than you ever have before? Are you going to start seeing some of those efficiencies in your R&D process as well? Hey, it's Parker Lane from Stifel here. hey it's parker lane from stifel here Jeff, maybe on the financial targets you have, you talked about the investment you're going to make of the incremental gross profit dollars through 2028. jeff maybe on the financial targets you have you talked about the investment you're going to make of the incremental gross profit dollars through 2028 Maybe zoom in on what the key priorities are there. maybe zoom in on what the key priorities are there I know Mike talked about development velocity picking up in an AI world. i know mike talked about development velocity picking up in an ai world How do we reconcile development velocity picking up with maybe also increased investment? how do we reconcile development velocity picking up with maybe also increased investment Is it just a matter of delivering more innovation than you ever have before? is it just a matter of delivering more innovation than you ever have before Are you going to start seeing some of those efficiencies in your R&D process as well? are you going to start seeing some of those efficiencies in your r&d process as well

Speaker 6: Yeah. I mean, I think right now some of the tooling and capabilities we're rolling out to the development organization is more in the investment cycle phase rather than the realization of some of those gains that we expect to take. The investment is now that we have this cloud platform, now that we've done all the work kind of underneath the layer of water that was invisible that allows us to infuse more innovation into the industry, that's where the investment is going to be going. It's primarily in R&D. I wish Diego Devalle wasn't on the stage and hearing all this. I have to constrain him a little bit. A lot of it will be going towards the R&D efforts. There will be some sales and marketing investments, like new personas, some new motions that we have to support. We benefit from operating in a vertical where we know our customers very, very well. We should see some nice leverage on that side. Then G&A, you've got the finance guys. You need to be paid too a little bit. There's not a lot of growth going into the G&A function. We can continue to scale that. We generally have the structure in place that we need. Yeah. yeah I mean, I think right now some of the tooling and capabilities we're rolling out to the development organization is more in the investment cycle phase rather than the realization of some of those gains that we expect to take. i mean i think right now some of the tooling and capabilities we're rolling out to the development organization is more in the investment cycle phase rather than the realization of some of those gains that we expect to take The investment is now that we have this cloud platform, now that we've done all the work kind of underneath the layer of water that was invisible that allows us to infuse more innovation into the industry, that's where the investment is going to be going. the investment is now that we have this cloud platform now that we've done all the work kind of underneath the layer of water that was invisible that allows us to infuse more innovation into the industry that's where the investment is going to be going It's primarily in R&D. it's primarily in r&d I wish Diego Devalle wasn't on the stage and hearing all this. i wish diego devalle wasn't on the stage and hearing all this I have to constrain him a little bit. i have to constrain him a little bit A lot of it will be going towards the R&D efforts. a lot of it will be going towards the r&d efforts There will be some sales and marketing investments, like new personas, some new motions that we have to support. there will be some sales and marketing investments like new personas some new motions that we have to support We benefit from operating in a vertical where we know our customers very, very well. we benefit from operating in a vertical where we know our customers very very well We should see some nice leverage on that side. we should see some nice leverage on that side Then G&A, you've got the finance guys. then g&a you've got the finance guys You need to be paid too a little bit. you need to be paid too a little bit There's not a lot of growth going into the G&A function. there's not a lot of growth going into the g&a function We can continue to scale that. we can continue to scale that We generally have the structure in place that we need. we generally have the structure in place that we need

Speaker 9: This is not a scientific comment. It kind of connects what Jeff said to what Diego said. I want you to understand we have a backlog of functional insurance requirements by country, by line of business. There are many lines of business and countries where in the old world, it did not make economic sense for us to invest and build out that product feature because we would only sell it to one customer. If we can get these models to work and facilitate an increase in velocity for creating those solutions, suddenly those things are going to be logical for us to deliver. That is going to unlock those countries. That is going to unlock those lines of business. That is going to accelerate the implementations. I give this speech all the time to our developers. If we can make our developers more productive, I do not want to make the company more efficient. I want to build more insurance product. That is going to help us accelerate. This is not a scientific comment. this is not a scientific comment It kind of connects what Jeff said to what Diego said. it kind of connects what jeff said to what diego said I want you to understand we have a backlog of functional insurance requirements by country, by line of business. i want you to understand we have a backlog of functional insurance requirements by country by line of business There are many lines of business and countries where in the old world, it did not make economic sense for us to invest and build out that product feature because we would only sell it to one customer. there are many lines of business and countries where in the old world it did not make economic sense for us to invest and build out that product feature because we would only sell it to one customer If we can get these models to work and facilitate an increase in velocity for creating those solutions, suddenly those things are going to be logical for us to deliver. if we can get these models to work and facilitate an increase in velocity for creating those solutions suddenly those things are going to be logical for us to deliver That is going to unlock those countries. that is going to unlock those countries That is going to unlock those lines of business. that is going to unlock those lines of business That is going to accelerate the implementations. that is going to accelerate the implementations I give this speech all the time to our developers. i give this speech all the time to our developers If we can make our developers more productive, I do not want to make the company more efficient. if we can make our developers more productive i do not want to make the company more efficient I want to build more insurance product. i want to build more insurance product That is going to help us accelerate. that is going to help us accelerate

Speaker 13: Thanks. Joe up there. To predict out to FY 2028, there's a bookings assumption therein. The best I can estimate, it doesn't seem like you need anywhere close to the type of fully ramped ARR growth you've been doing to get to the 17%, 18% CAGR endpoint. Without getting too exact, is that directionally fair? Thanks. thanks Joe up there. joe up there To predict out to FY 2028, there's a bookings assumption therein. to predict out to fy 2028 there's a bookings assumption therein The best I can estimate, it doesn't seem like you need anywhere close to the type of fully ramped ARR growth you've been doing to get to the 17%, 18% CAGR endpoint. the best i can estimate it doesn't seem like you need anywhere close to the type of fully ramped arr growth you've been doing to get to the 17% 18% cagr endpoint Without getting too exact, is that directionally fair? without getting too exact is that directionally fair

Speaker 4: Yeah. I mean, look, the fully ramped number and growth rates on the fully ramped number is one that always makes me a little bit uncomfortable. We had a huge deal with Liberty Mutual that drives a fully ramped outcome. You're going to see that number bounce around a little bit. I think you're picking up on the point that I was just making. Those targets are very realizable in just the core motion that we're going through today and allowing for some of this new innovation that we're talking about to provide upside to some of those numbers. I think you're thinking about it directionally right. I haven't done that math, but it sounds directionally right. Yeah. yeah I mean, look, the fully ramped number and growth rates on the fully ramped number is one that always makes me a little bit uncomfortable. i mean look the fully ramped number and growth rates on the fully ramped number is one that always makes me a little bit uncomfortable We had a huge deal with Liberty Mutual that drives a fully ramped outcome. we had a huge deal with liberty mutual that drives a fully ramped outcome You're going to see that number bounce around a little bit. you're going to see that number bounce around a little bit I think you're picking up on the point that I was just making. i think you're picking up on the point that i was just making Those targets are very realizable in just the core motion that we're going through today and allowing for some of this new innovation that we're talking about to provide upside to some of those numbers. those targets are very realizable in just the core motion that we're going through today and allowing for some of this new innovation that we're talking about to provide upside to some of those numbers I think you're thinking about it directionally right. i think you're thinking about it directionally right I haven't done that math, but it sounds directionally right. i haven't done that math but it sounds directionally right

Speaker 13: Just as a follow-up, since you're winning almost 100% of DWP decisions, what does that say about the pipeline, not just over the next year, I suppose, but over years? Is there maybe an argument that the movement off mainframe to modernize, if you can show that AI improves speed to value, customers are talking about accelerating their growth by adopting your solutions quicker? Does that pick up the pace? That's actually a bigger feeder of pipeline than maybe you've been seeing? Just as a follow-up, since you're winning almost 100% of DWP decisions, what does that say about the pipeline, not just over the next year, I suppose, but over years? just as a follow-up since you're winning almost 100% of dwp decisions what does that say about the pipeline not just over the next year i suppose but over years Is there maybe an argument that the movement off mainframe to modernize, if you can show that AI improves speed to value, customers are talking about accelerating their growth by adopting your solutions quicker? is there maybe an argument that the movement off mainframe to modernize if you can show that ai improves speed to value customers are talking about accelerating their growth by adopting your solutions quicker Does that pick up the pace? does that pick up the pace That's actually a bigger feeder of pipeline than maybe you've been seeing? that's actually a bigger feeder of pipeline than maybe you've been seeing

Speaker 4: On a qualitative basis, that's the conversation, getting the conversation around what does it take to win in tomorrow's market rather than the avoidance of potential risk in a longstanding mainframe environment. On a qualitative basis, absolutely. On a quantitative basis, I'll say that in the very near-term, we feel really good about the pipeline coverage that we have. Some of that's traditional, and some of that is really kind of the longstanding mainframe dislocation of the mainframe entrenchment. If we think about that, it really ties very closely to the geographic component. As you go from North America around the world, there are some geographies that just have a larger footprint and more entrenched mainframe footprint. On a qualitative basis, that's the conversation, getting the conversation around what does it take to win in tomorrow's market rather than the avoidance of potential risk in a longstanding mainframe environment. on a qualitative basis that's the conversation getting the conversation around what does it take to win in tomorrow's market rather than the avoidance of potential risk in a longstanding mainframe environment On a qualitative basis, absolutely. on a qualitative basis absolutely On a quantitative basis, I'll say that in the very near- term, we feel really good about the pipeline coverage that we have. on a quantitative basis i'll say that in the very near- term we feel really good about the pipeline coverage that we have Some of that's traditional, and some of that is really kind of the longstanding mainframe dislocation of the mainframe entrenchment. some of that's traditional and some of that is really kind of the longstanding mainframe dislocation of the mainframe entrenchment If we think about that, it really ties very closely to the geographic component. if we think about that it really ties very closely to the geographic component As you go from North America around the world, there are some geographies that just have a larger footprint and more entrenched mainframe footprint. as you go from north america around the world there are some geographies that just have a larger footprint and more entrenched mainframe footprint As we continue to develop the things that Mike just mentioned, that gives us more ability to talk about really predictability of programs and then the value of being on the cloud in Germany and in Japan, that is precisely important for operating in the context of those countries. In the long measure of time, yes, mathematically in the very near-term and for a long time forward, qualitatively, that's the story that we want to continue to make true. As we continue to develop the things that Mike just mentioned, that gives us more ability to talk about really predictability of programs and then the value of being on the cloud in Germany and in Japan, t hat is precisely important for operating in the context of those countries. as we continue to develop the things that mike just mentioned that gives us more ability to talk about really predictability of programs and then the value of being on the cloud in germany and in japan, t hat is precisely important for operating in the context of those countries In the long measure of time, yes, mathematically in the very near- term and for a long time forward, qualitatively, that's the story that we want to continue to make true. in the long measure of time yes mathematically in the very near- term and for a long time forward qualitatively that's the story that we want to continue to make true

Speaker 9: Hey, [Mike]. Great. Thank you, everybody. I think we'll wrap it up there. It's been a great dialogue. We'll head outside for a cocktail hour. Hey, [Mike] . hey [mike] Great. great Thank you, everybody. thank you everybody I think we'll wrap it up there. i think we'll wrap it up there It's been a great dialogue. it's been a great dialogue We'll head outside for a cocktail hour. we'll head outside for a cocktail hour

Speaker 7: OK. Super. Thanks, everybody, very much. OK. ok Super. super Thanks, everybody, very much. thanks everybody very much

Speaker 6: Thank you. Thank you. thank you