Earnings Labs

Guidewire Software, Inc. (GWRE)

Q1 2026 Earnings Call· Wed, Dec 3, 2025

$139.82

+2.34%

Key Takeaways · AI generated
AI summary not yet generated for this transcript. Generation in progress for older transcripts; check back soon, or browse the full transcript below.

Same-Day

-2.17%

1 Week

-7.02%

1 Month

-12.88%

vs S&P

-14.03%

Transcript

Operator

Operator

Greetings, and welcome to the Guidewire Software, Inc. First Quarter Fiscal 2026 Financial Results Conference Call. As a reminder, this call is being recorded and will be posted on our Investor Relations page later today. I would like to now turn the call over to Alex Hughes, Vice President of Investor Relations. Thank you, Alex. You may begin.

Alex Hughes

Management

Thank you, Grace. Hello, everyone. With me today is Mike Rosenbaum, Chief Executive Officer, and Jeff Cooper, Chief Financial Officer. A complete disclosure of our results can be found in our press release issued today as well as in our related Form 8-Ks furnished to the SEC, both of which are available in the Investor Relations section of our website. Today's call is being recorded, and a replay will be available following its conclusion. Statements today include forward-looking ones regarding our financial results, products, customer demand, operations, the impact of local, national, and geopolitical events on our business, and other matters. These statements are subject to risks, uncertainties, and assumptions based on management's current expectations as of today and should not be relied upon as representing our views as of any subsequent date. Please refer to the press release and the risk factors and other documents we file with the SEC, including our annual report and quarterly reports on Forms 10-K and 10-Q for information on risks, uncertainties, and assumptions that may cause actual results to differ materially. We also will refer to certain non-GAAP financial measures to provide additional information to investors. All commentary on margins, profitability, and expenses are on a non-GAAP basis unless stated otherwise. A reconciliation of non-GAAP to GAAP measures is provided in our press release. Reconciliations and additional data are also posted in the supplement on our IR website. And with that, I'll now turn the call over to Mike.

Mike Rosenbaum

Management

Thanks, Alex, and good afternoon, everyone. Thanks for joining the call. We're off to a great start to our fiscal year, delivering results ahead of expectations across all key financial metrics. We're seeing continued momentum in our business. Five years ago, we launched Aspen, the first release of Guidewire Cloud Platform, with the goal of enabling property and casualty insurers to engage, innovate, and grow efficiently. Today, with NoSECCO, our fourteenth release, we're experiencing tremendous success across the industry and around the world. We continue to see accelerating adoption of our cloud products and services. Reflecting on this success, we got four important things right. We met insurers where they were in terms of their operational complexity and the investments they had already made. We designed agility and extensibility into the platform to unlock innovation. We invested in and fostered an ecosystem of partners to help drive our vision for a cloud-based core system powering the P&C industry. And we worked tirelessly to ensure every project and customer was successful. Our Q1 outcome and continued momentum are direct results of these decisions and hard work. Additionally, the timing of our platform maturity aligns us well and leaves us well-positioned for the advent of generative AI. The potential for generative AI in the P&C insurance industry marries extremely well with our platform's extensible design and now creates opportunities for us to unlock greater productivity, platform value, and new products that leverage our vertical data and business process expertise. We believe these elements together position us to dramatically improve insurer outcomes and fulfill our enduring mission of enabling insurers to innovate and grow efficiently. This means our platform can now go wider and deeper with a greater portfolio of applications and tools that harness data and AI. In October, we hosted Connections,…

Jeff Cooper

Management

Thanks, Mike. We are off to a great start. Q1 saw record sales activity for a first quarter and a clean beat across ARR, revenue, and profitability expectations. We continue to be thrilled with the momentum we're seeing in the business. ARR ended at $1.063 billion, up 21% year over year on a constant currency basis and ahead of our expectations. Total revenue was $333 million, up 27% year over year, reflecting strong performance across all segments. We continue to see strong subscription and support revenue growth as customers migrate to cloud and new insurers adopt our cloud products. In the first quarter, subscription and support revenue grew 31% to $222 million. Counterintuitively, license revenue grew 12% to $42 million. In general, we expect license revenue to decline as we continue to migrate customers to cloud and drive subscription revenue growth. However, in the first quarter, licensing benefited from a large annual term license renewal after the end of a multiyear commitment entered into in 2020. As a reminder, revenue related to multiyear term license contracts is generally recognized upfront, and as a result, no additional license revenue is recognized until the committed term expires. Professional services revenue finished well above our expectations at $68 million, reflecting high utilization and effective collaboration with our SI partners. Now let me turn to profitability for the first quarter, which we'll discuss on a non-GAAP basis unless stated otherwise. Gross profit was $219 million, up 32% year over year, with a gross margin of 66%. Subscription and support gross margin reached 73%, continuing to track ahead of expectations. And professional services margin improved to 23%. We are seeing higher services demand and have a healthy backlog that we are executing against, which will require a bit more investment and utilization of subcontractors for…

Alex Hughes

Operator

Great. Thanks, Jeff. Our first question is going to come from Dylan Becker of William Blair. Hey, guys.

Dylan Becker

Analyst

Hey, Dylan. Appreciate it here. Maybe, Mike, starting with you, we've talked a lot about the idea of operational agility, and it's evident with the new products and PricingCenter and UnderwritingCenter. Maybe wondering if you could dig a level deeper and give us some or maybe a sense of what those opportunities look like and maybe if there's an unlock as you go deeper in that domain to kind of tether and attach more momentum across the existing core suite? Maybe thinking PolicyCenter in particular as that feels like a logical area of kind of attachment between those two segments.

Mike Rosenbaum

Management

Well, sure. For sure, the strategy around both of these products is to target our customer base. And I think that the integration that we're building and the fact that they're built or being built to run on our platform and seamlessly connect with the applications, but also the data platform, is a real important differentiator for these products and something that helps drive the agility that you were talking about. But if you want to sort of understand why this matters for an insurance company, these companies are, number one, sometimes trying to grow, sometimes trying to expand with new products, and also always trying to just get their prices right. And the more flexibility we can provide them about modeling and estimating with their actuarial teams what the right structures are for pricing the insurance products and getting those things into actual production deployment, the more effective an insurance company they can be. Now that gives them flexibility to, like I said, expand into new markets or add or change the existing products that they have. I think it's been pretty frustrating, I think, for the industry in general just to have such a long lag time between the concept that you need to make a price change to where you can actually affect that price in market, and that's what PricingCenter is designed to help alleviate. I think it's going to have a direct impact, a very direct and positive impact on our customer base and the customers that choose to deploy that with us. On the underwriting side, the thing that's super exciting here is just giving the industry in general this ability to respond more quickly and more effectively to submissions that they receive from brokers. It's a real frustration across the board. You talk to every insurance company, and they have great teams of underwriters. But dealing with all the manual paperwork and reading a document and assessing risk, it just takes so much time. And modern systems, especially with generative AI, are going to make a big improvement in terms of the operational efficiency of these underwriting departments. And so that's kind of how it affects the industry and how I think we're well-positioned to be able to attach it to new PolicyCenter, but also to existing PolicyCenter implementations.

Dylan Becker

Analyst

There we go. Sorry. I was stuck on mute there. No. That's very helpful. Thank you, Mike. And then maybe, switching over to Jeff. If we think about the incremental investment you called out on services, obviously, there's a lot of opportunity, it sounds like, here. How should we think about the outsized momentum you're seeing on the services front? Is that a good indication of some of the subscription momentum that's expected to come as you're doing more of this process change work? And really maybe indicative of the underlying demand environment and how sustainable that is at the end of the day? Thank you.

Jeff Cooper

Management

I think Q1 in particular was benefiting from a couple larger programs that the teams have been working hard on. I think the services organization has done a great job partnering with the SIs to meet the demand environment that we're experiencing. It's hard to read through to just our services revenue line and take that as an indication of overall demand for what we're trying to accomplish because it really is spread across the entire ecosystem. And we do that very purposefully. I think one thing that we are there's a couple areas where we're making investments. We do believe that over time, generative AI can help us bring down the cost of implementation. And that can have a pretty meaningful pull-through to demand for our products. So we're investing in that, and we're excited about the early potential that we're seeing there. And then there's also new product areas. You know, our services organization often has to act as the tip of the spear around new products. So investing to make sure that we're ready for that demand, and then we'll work in concert with our partners to enable them as we work through that early demand that we see with some of these newer products. So that's what's driving a lot of the investments we're making, and we feel very good about those investments. It is shifting a little bit. You know, we are seeing some higher services revenue expectations this year than maybe we would have thought a couple years ago. And we think that that's generally healthy.

Alex Hughes

Operator

Great. Thanks, Dylan. Our next question is going to come from Alexei Gogolev of JPMorgan.

Alexei Gogolev

Analyst

Thank you, Alex. Hello, everyone. Mike, in recent quarters, you had a number of very large customers migrate to the cloud. Are you seeing more consumption of all three key products simultaneously rather than business line by business line, and what is driving the change in the consumption pattern?

Mike Rosenbaum

Management

I'll start by answering the second half of your question. I think what we're seeing is the benefits of the actualization of a lot of great hard work in close partnership with our tier-one customer base around what it would take to convince them that we could deliver a cloud at scale that was reliable and secure enough for their mission-critical workloads. We have worked tirelessly over many, many years at many releases to earn that trust, and you're seeing that now pay off in these deals materialize. Now with respect to migrations, a lot of that relates to either what they're already running with Guidewire and their commitment to move that to the cloud. I would say more often than not, it involves the complete landscape of what they're running with us, just because it makes sense to negotiate the whole thing all at once. Very often, if it makes sense for them strategically to look at another component of their architecture, say claims if they're running policy or policy if they're running claims, that is very often the case. But we only see a few of these every quarter, so it's tough to say that there's a pattern emerging. The biggest pattern that I'd say is now very clearly happening is that we are showing that we can run this at scale for the largest insurance companies in the world, and we're earning that trust. And we're kicking off these incredible programs with these companies. We're excited to deliver on them. And I think it's going to be a great thing for the industry. It's going to be a great thing for these customers. It's going to be a great thing for Guidewire. These are commitments that we expect to last for decades. And we're very happy that we've been able to earn this trust, and we're excited to step up and deliver on behalf of these customers.

Alexei Gogolev

Analyst

Thank you, Mike. And, Jeff, if I could, maybe ask you on the ARR guidance. Exactly a year ago, you kept ARR guidance unchanged. This year, you're raising it after Q1. I'm just wondering if there are any components in your current growth guidance where you may be prudently, but still somewhat conservative, and what might those components be?

Jeff Cooper

Management

Yeah. No. I appreciate the question. It is atypical for us to raise our outlook at the end of Q1. You know, we kind of think about our progress towards some of our annual targets. This Q1 was a little bit unique in terms of the size and scope and the deal activity we were able to close in Q1. So I think there are elements of that that informed how we thought about adjusting the guidance. Obviously, we took a deep look at the pipeline and feel confident in the strength of the pipeline. The third component is we made an acquisition in ProNavigator, and we expect that to add about $4 million. So that's part of the incremental raise is related to that acquisition of ProNavigator. And then, you know, finally, just some of the early market feedback. It's still very early, so these won't contribute in large ways. But some of the feedback we're getting on the newer products is exciting, and that gives us a little bit of confidence as we think about the guide for this year.

Alex Hughes

Operator

Alexei. Our next question comes from Ken Wong of Oppenheimer and Company.

Ken Wong

Analyst

Fantastic. Thanks for taking my question. Maybe building on that last note, and this could be for Mike or Jeff. On the interest for UnderwritingCenter and PricingCenter, how should we think about the timeline for adoption there? Like, would it mirror something like PolicyCenter, which was a heavier lift and did require customers to take a kind of a longer look at it? Or could it be closer to something like ClaimCenter where there was much faster adoption in the early days? What's the feedback you've been getting? What are some of the stumbling blocks that could stall that particular path to migration?

Mike Rosenbaum

Management

Yeah. Thanks, Ken. I would say it's slightly different. I think there's an opportunity for us to position this a little bit more incrementally or greenfield than maybe ClaimCenter or PolicyCenter where you're very clearly replacing a system of record. Certainly, there's something that we're replacing. But I think that the go-to-market motion, while new for us, I think it'll evolve to be its own kind of unique and maybe a little bit faster than either of those other two core products. Now we still got some work to do to prove that out. But as Jeff said, the initial response and the receptivity to the architecture and the concept and what we're setting out to do has been very positive and certainly giving us enough interaction with customers and prospects to be able to validate that we're on the right track. And, you know, so I would say just to kind of repeat what I said is, like, I expect it to be slightly faster. It's certainly not going to be something that's super fast, and these are big decisions for companies to make. But it doesn't have to be a sort of all-or-nothing complete replacement of something the way these big core system, core system of record implementation and decisions are.

Ken Wong

Analyst

Fantastic. Super helpful, Mike. And Jeff, just on the subscription and support gross margins, saw a really nice uptick this quarter. Is that just kind of further efficiency gains or is there some timing of AWS credits or any other one-time items that we should be aware of?

Jeff Cooper

Management

There was a very small contribution of some one-time items that did impact the quarter, but not in a significant way. Those are becoming less and less meaningful. I think it was just good progress that we've made in driving efficiency. And we're pleased to be able to raise the guide for the year as well. So the team has done a lot of work here across the finance organization, engineering organization, and customer success to help us tackle the efficiencies there. And so I think that's what you're seeing.

Ken Wong

Analyst

Fantastic. Thanks a lot, Jeff.

Alex Hughes

Operator

Great. Our next question comes from Michael Cohen of Wells Fargo.

Michael Cohen

Analyst

Hey. Thanks very much. Appreciate you taking the questions. I mean, the growth rates of the business continued to trend higher. I mean, it's a seasonally lighter period, but you're clearly reaping some of the rewards of the last year. Just maybe help us stack rank the drivers of what you're seeing and if that at all shifts based on early feedback coming out of Connections. And, Jeff, is there anything from a seasonal perspective we should be mindful of as we're just kind of rolling some of the numbers forward from a sequential basis on the top line?

Mike Rosenbaum

Management

Yeah. I'll give you a perspective on drivers. So we're very happy with the pace of migration activity. And we continue to be very, very happy with the competitive win rates and just general demand for core deals in the industry worldwide. So those two things together just give us a lot of baseline confidence in the business. And as you can imagine, these sorts of deals are very considered, which gives us a lot of visibility into the forward pipeline and gives us the confidence as we did this quarter to raise the guide based on the perspective around the fiscal year. And then you add on top of that the growing momentum in these new products, and like I said, the reception that we got at Connections to these new products was phenomenal. It creates a lot of excitement in the customer base, but also our sales organization and gives us an opportunity to line up this sort of new vector of growth for the company. And so that's basically how I would stack things up. Migration, general demand for core systems, win rates going in our direction, building momentum quarter over quarter, and then these new products giving us even more confidence in what we can produce as we proceed through the year.

Jeff Cooper

Management

And the only thing I'd add on the seasonality is just to reinforce what we talked about at our analyst day at Connections. The one dynamic we're seeing this year is a little bit of a headwind with respect to ARR coming off of the backlog in Q3. So we communicated that to you all at analyst day and wanted to reinforce that message. Nothing new coming out of Q1 to highlight.

Michael Cohen

Analyst

Great job. Let's start it here. Thank you.

Alex Hughes

Operator

Thank you. Great. Thanks, Michael. Our next question comes from Adam Hotchkiss at Goldman Sachs.

Adam Hotchkiss

Analyst

Great. Thanks so much for taking the questions. I wanted to ask another one on AI. You think about some of the non-core software vendors that have come out with AI use cases for insurance. And I think we've all seen headlines of those in the last number of quarters. Maybe just talk about what your philosophy is in terms of competing versus partnering or allowing access to some of these third-party AI use cases? And just more broadly, your sort of view and stance towards competitors from an AI perspective?

Mike Rosenbaum

Management

Yeah. I appreciate the question. And for those of you who are closely following us, this was one of the key messages that we attempted to articulate very clearly at the Connections user conference. The most important thing for you to understand about Guidewire as an investor or as a customer or as a partner is that our job, our mission is to be the core system of record for the P&C insurance industry worldwide. And we need to be an open platform. We need to invite these InsurTechs to build against our system of record if that is something that they want to do. We want our customers to feel confident that a decision to move to Guidewire does not curtail them, does not constrain them at all. Now, obviously, we are going to build first-party generative AI capabilities and features and products on top of our platform. And we'll offer those to our customers. But this is a space that is moving and evolving so quickly that it just doesn't make strategic sense for us to not take an open approach. And so what you're going to see from us is this kind of philosophy that the most important thing is to win the core. The most important thing is to invite the innovation in and around our core, continue to create a strong ecosystem, and use everything in our power to deliver as a first-party generative AI-powered features and capabilities that bring our customers more value based on their investment in Guidewire. That's going to come from us, and it's also going to come from the ecosystem. And so I tend not to think of these companies or these headlines really as competition to Guidewire as much as an opportunity for us to really lift all boats in the industry. There is so much potential for generative AI in this industry that it's not going to be a winner-takes-all kind of situation with respect to GenAI and automating workflows and making the insurance industry more efficient. There are going to be many companies and many people and many organizations that benefit from that effort over time, and our goal is to foster that innovation in the industry, not compete with it.

Adam Hotchkiss

Analyst

That's really helpful. Thanks, Mike. And then I wanted to talk about just at your existing customers, propensity or increasing propensity to actually move more quickly across lines of business. I think we talk a lot about the three suites and the increase in full suite adoption a lot, but maybe the part that gets missed is the willingness and the rapidity in which customers are willing to move more wall-to-wall across policy types. So Mike, maybe just talk a little bit about how that's evolving, particularly post you put up with Liberty Mutual, that would be helpful. Thanks.

Mike Rosenbaum

Management

Sure. The way that that discussion or decision happens in our customer base is really all about business priorities. Something is driving the effort to modernize the core system. There's a business objective that is driving the decision to be on a more agile, modern platform. And so, especially when we have already established a successful implementation and a successful foothold, it becomes logical that that customer will eventually move the other lines of business that are not yet on Guidewire to Guidewire. What we try to do is align ourselves to the business objective that they have for that line of business, whether or not it's expanding to another, let's say, state very often in some of our US-based insurance companies, or whether or not it's modernizing pricing, modernizing packaging, adding new distribution channels. It's those kinds of business priorities that align to the necessity to have a modern platform, and that's what creates the deal cycle that we can go attack or fulfill almost based on the successful track record that we've already established. And this is kind of why I stress with everybody why you hear me talk about it in the remarks every quarter. It's like, the most important thing for us is every single one of our customer projects is successful. And if we can make sure that we're successful, that there is an attitude that the next program that they decide to do, logically, they would do it on Guidewire because we're the ones that they can trust, and the program's going to succeed. So, hopefully, that gives you a sense of how it's like a business-driven expansion to the other lines of business.

Alex Hughes

Operator

Great. Thanks, Adam. Our next question goes to Parker Lane. Please, Stifel.

Parker Lane

Analyst

Guys. Thanks for taking the question. Mike, just wanted to double down on generative AI here. How often are you hearing in your conversations with insurers that this is a primary catalyst for their desire to move to the cloud or adopt cloud solutions outright? And do you think it's accelerating the timeline for those that would have been looking maybe five years in the future? Are they now starting to sort of compress that timeline in anticipation of their peers adopting some of these generative AI tools?

Mike Rosenbaum

Management

I do think it's a driver, and I do think it's a factor. And I do think it's helping us, especially around the migration discussion. I think it's becoming more and more clear that being on a cloud platform, being on Guidewire Cloud is going to put these companies in a better position. I wouldn't say it's necessarily the primary driver. In that, there's a lot of experimentation going on. There's a lot of activity going on in the customer base. And because the core programs, the core projects often take so long, it's more like the long-term view is we're going to be better on Guidewire, but often there's other activity around generative AI that's happening independent of Guidewire just because there's a necessity for really every company in the world to be learning how to use these tools and seeing what's out there and how they might impact them. So definitely, it's a positive. Definitely, it's driving that conversation and increasing the velocity of the migration and modernization. I just wouldn't necessarily say it's like maybe not the primary driver. It's more like a long-term positive influence.

Parker Lane

Analyst

Makes sense. And, Jeff, one for you. Just on the pipeline that you see here over the remaining three quarters of the year, anything to call out about the North American versus international split? I think you mentioned five North American deals and three international this quarter. Expecting a pretty even split, skewing in either direction, anything there would be good.

Jeff Cooper

Management

Yeah. I think that in general, we're pretty pleased with the breadth of the demand. So seeing healthy demand in Europe, we made some investments, and we're optimistic about the demand in the pipeline in Asia Pac. North America continues to do really well. So nothing specific to highlight right now, and we feel confident that the pipeline is pretty broad-based and global.

Parker Lane

Analyst

Great. Thanks for taking the questions.

Alex Hughes

Operator

Thanks, Parker. Our next question comes from Rishi Jaluria's team at RBC.

Max

Analyst

Hey, guys. This is Max on for Rishi. Thanks for taking the question. As we think about the generative AI and the agentic AI features that are being embedded within the PricingCenter and the UnderwritingCenter, maybe could you just remind us how those features are currently being monetized and how that could change or evolve over time? And then just a follow-up to that, as usage and adoption of these new features scales, could that potentially have an impact on gross margins over time? And maybe what does that look like?

Mike Rosenbaum

Management

The baseline approach we have for pricing almost everything at Guidewire is based on a percentage of direct written premium, and we try very much to build, define, and articulate the value proposition of a Guidewire product to an insurance customer as a ratio to their direct written premium. And we feel very, very we've been very successful establishing that baseline with ClaimCenter, PolicyCenter, and BillingCenter. And our expectation is that that will also work for PricingCenter, UnderwritingCenter, and other products that we sell at Guidewire. I think this is a key characteristic of our approach and partnership with our customers that the cost of these products generally scales at often improving economies as the customer grows. But it scales with their growth. And so our incentives are aligned. And the generative AI, think of generative AI as being key capabilities or features that are embedded within those new centers. Such that they're not really specifically priced. We'll obviously have to create constraints because in some circumstances, these things can be expensive to support at scale. But in general, we feel comfortable that the DWP-based pricing models that we have for our other products will apply to these generative AI-based products. And, certainly, your comment about the potential impact on gross margin is something we think about and factor into the structures that we create for not just the new GenAI products, but also the core cloud platform itself. We have constraints established that protect us from those kinds of impacts. I would say, though, on the generative AI component of this, the improved efficiencies of these models sort of quarter over quarter and year over year are astounding. So the circumstances that exist today in terms of how much these things cost to run, I have every expectation that they will improve over time. Just as they have over the past couple of years, and that's kind of how we're thinking about designing for the use and embedding of these features within our products.

Max

Analyst

Very helpful. Thanks for the question.

Mike Rosenbaum

Management

Thank you very much, Max.

Alex Hughes

Operator

Thanks, Max. Next question comes from Aaron Kimson of Citizens Bank.

Aaron Kimson

Analyst

Great. Thanks, guys. Jeff, I want to try and dig into the growth algorithm a little. If I understand correctly, John commented at the analyst day that last fiscal year expansions with existing customers drove more net new revenue than migrations. You have the nice slide on the analyst day deck that outlines cloud migrations, modernizations, new products, marketplace, and potential M&A as growth drivers. When we think about the 17% to 18% ARR CAGR through FY '28, can you help us ballpark what each of the organic components could contribute and look like that for migrations as a percentage of growth over time?

Jeff Cooper

Management

So there's a lot in that question. Right? Look, I mean, the way I generally think about this and the way we look at this is that there's a variety of different levers that we have at our disposal as we think about achieving the growth algorithm that you just talked about. Obviously, migrations and it's hard to it's even really hard to decouple migrations from expansions because migrations often come along with expansions into new areas and new modules. And so migrations right now are certainly contributing in a very healthy fashion. We have a long runway still to go in terms of migrating our install base to our cloud products, and we're doing a great job of executing against that. As we migrate, we've also seen a very healthy expansion. Mike commented on this, but just that impulse to commit more rather than less in this environment has been very healthy. So if you're a ClaimCenter on-prem customer thinking about migrating to the cloud, adopting PolicyCenter at the point of migration is a trend that we've seen a bit more of. There's still a lot of white space out there in terms of legacy systems, and the team does a good job just doing the blocking and tackling of winning new customers. And there are a number of new customers that we expect to add this year, and I expect that to continue in a healthy pattern. And then some of these new product areas, that will take a little bit of time to incubate but very excited about the potential that exists there. So I'm not going to get into the exact percentages we're expecting from each of those component areas, but I think the takeaway is that it's pretty broad-based when we think about the algorithm that will drive that growth. And there's a variety of different growth levers that we can pull.

Aaron Kimson

Analyst

Yeah. That was an ambitious question. I appreciate that. And then on the new products, I guess, specifically UnderwritingCenter, can you talk a little bit about UnderwritingCenter for personal versus commercial and how you think about that? Are they essentially two separate sub-modules from a developer perspective? And does it make sense to invest more heavily in one than the other first?

Mike Rosenbaum

Management

Yeah. The same underlying framework, different use cases. And I think you almost could consider personal. Each line of business in commercial will have slightly different requirements and a slightly different approach. And personal versus commercial is one way to segment it, but there's going to be a lot of nuance to how this actually gets built and rolled out and which lines of business it'll be most useful for at the beginning and versus over time. We're certainly approaching it like we do everything at Guidewire from a platform-first perspective, and so try to share as much componentry across all of those use cases as possible. And then, with advanced product designer, we can model the product for that specific line of business, personal or commercial or whichever commercial line of business we're talking about. And then with respect to the tweaking and training of the prompts and the approach we take to the models and the text of documents we have to ingest in order to feed into the business workflows, each of those will be tweaked by line of business. Our choice of where to invest in the sequencing of the investment is a lot a little bit to do with what things we need to focus on in order to, like, think stress test the whole system, but also which customers we've had the opportunity to work with in order to really test this out in conjunction with a real use case. So that's how we're currently thinking about it. But the objective overall is for there to be one underwriting platform that's going to work across lines of business. And the complex commercial lines as well as all the commercial lines business. Super question. Thank you.

Alex Hughes

Operator

Thanks, Aaron. Well, that's our last question. So I'll turn it over to you, Mike. Final comment?

Mike Rosenbaum

Management

No, just thanks, everybody, for joining. I'd just reiterate, we couldn't be happier with the start to the fiscal year and the momentum that we're seeing with cloud. Very significant amount of runway left in the core business for the company and positive visibility into the pipeline, and we're excited to increase our focus quarter over quarter on these new products. And excited to share more about that progress with you in future quarters and conversations throughout the rest of the year. So thanks again, everybody, for joining.