Q2 2019 Earnings Call

August 5, 2019

Greetings and welcome to the guide Wire conference call.

Operator: Greetings, welcome to the Guidewire Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Curtis Smith, CFO for Guidewire. Please go ahead, sir.

At this time, all participants are in listen only mode.

Question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press Star Zero Wonder telephone keypad. As a reminder, this conference is being recorded it is my pleasure to introduce your host Curtis Smith CFO for Hotwire. Please go ahead Sir.

Good afternoon, and welcome to Guidewire Software's conference call to discuss our CEO transition.

Curtis Smith: Good afternoon. Welcome to Guidewire Software's Conference Call to discuss our CEO transition. My name is Curtis Smith. I am the Chief Financial Officer of Guidewire, and with me on the call are Marcus Ryu, Guidewire's Chairman of the Board and former Chief Executive Officer, as well as Mike Rosenbaum, our new Chief Executive Officer and board member. A complete disclosure of our announcement can be found in our press release issued today, as well as in our related Form 8-K filed with the SEC, both of which are available on the Investor Relations section of our website at ir.guidewire.com. As a reminder, today's call is being recorded, and a replay will be available following the conclusion of the call.

Curtis Smith: Good afternoon. Welcome to Guidewire Software's Conference Call to discuss our CEO transition. My name is Curtis Smith. I am the Chief Financial Officer of Guidewire, and with me on the call are Marcus Ryu, Guidewire's Chairman of the Board and former Chief Executive Officer, as well as Mike Rosenbaum, our new Chief Executive Officer and Board member. A complete disclosure of our announcement can be found in our press release issued today, as well as in our related Form 8-K filed with the SEC, both of which are available on the Investor Relations section of our website at ir.guidewire.com. As a reminder, today's call is being recorded, and a replay will be available following the conclusion of the call.

My name is Curtis Smith, I am the Chief financial Officer of Guidewire and with me on the call our Marcus Ryu Guidewires Chairman of the board and former Chief Executive Officer as well as my closing on our New Chief Executive Officer and Board member.

A complete disclosure of our announcement can be found in our press release issued today as well as in our related form 8-K filed with the SEC both of which are available on the Investor Relations section of our website at IR Dot Guidewire dotcom.

As a reminder, today's call is being recorded.

And a replay will be available following the conclusion of the call.

During the call we make forward looking statements pursuant to the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995 regarding trends strategies and anticipated performance of the business.

Curtis Smith: During the call, we make forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding trends, strategies, and anticipated performance of the business. These forward-looking statements are based on management's current views and expectations as of today and should not be relied upon as representing our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. Actual results may differ materially. Please refer to the risk factors in our most recent Form 10-K and 10-Qs filed with the SEC. Let me turn the call over to Marcus and Mike for their prepared remarks. Marcus, Mike, and I will then take your questions.

These forward looking statements are based on management's current views and expectations as of today and should not be relied upon as representing our views as of any subsequent date.

We disclaim any obligation to update any forward looking statements or outlook.

Actual results may differ materially.

Please refer to the risk factors in our most recent Form 10-K , and 10-Q filed with the SEC.

With that let me turn the call over to Marcus and Mike for their prepared remarks.

Marcus Mike and I will then take your questions.

Marcus Ryu: Thank you, Curtis. Thanks to everyone on the line joining us on short notice. Today, we announce that Mike Rosenbaum has been appointed as Guidewire's CEO and as a board member. I am becoming Guidewire's Chairman. Before Mike speaks to his motivations for joining and intentions for the future, I want to speak forthrightly to why this change is happening and my ongoing role with the company. Almost 18 years ago exactly, my co-founding partners and I started Guidewire with two ambitions: First, to apply world-class software engineering to the neglected mission-critical needs of a global industry. Second, to build an enduring culture of professionals unified by their commitment to integrity, rationality, and collegiality.

Marcus Ryu: Thank you, Curtis. Thanks to everyone on the line joining us on short notice. Today, we announce that Mike Rosenbaum has been appointed as Guidewire's CEO and as a board member. I am becoming Guidewire's Chairman. Before Mike speaks to his motivations for joining and intentions for the future, I want to speak forthrightly to why this change is happening and my ongoing role with the company. Almost 18 years ago exactly, my Co-Founding partners and I started Guidewire with two ambitions: First, to apply world-class software engineering to the neglected mission-critical needs of a global industry. Second, to build an enduring culture of professionals unified by their commitment to integrity, rationality, and collegiality.

Thank you Curtis and thanks to everyone on the line joining us on short notice.

Today, we announced that Mike Rosenbalm has been appointed as Guidewire CEO and as a board member I am becoming Guidewire as chairman.

Before Mike speaks to his motivations for joining and intentions for the future I want to speak forthrightly to wider changes happening and my ongoing role with the company.

Almost 18 years ago exactly my co founding partners and I started guidewire with two ambition.

First to apply World class software engineering to the neglected mission critical needs of the global industry.

And second is to build an enduring culture of professionals unified by their commitment to integrity rationality and collegiality.

Marcus Ryu: It has been the greatest privilege of my professional life to work alongside my Guidewire colleagues, steadfast in these goals through both the tremendous adversity of our early years and the challenges of scaling to be a global company within sight of $1 billion of revenue. Today, Guidewire enjoys far greater influence and opportunity than I could have imagined at the start. We are a technology provider of choice to the largest cross-section of insurers in the $2 trillion P&C industry, entrusted by them to enable the functions most constitutive of their businesses. We find ourselves at the heart of the digital initiatives that are driving IT investment for the industry, we are on the frontier of exploring and mining data in ways that are transforming industry practices.

It has been the greatest privilege of my professional life to work alongside my Guidewire colleagues steadfast in these goals through both the a tremendous diversity of our early years and the challenges of scaling to be a global company within sight of $1 billion of revenue.

Today, Guidewire enjoys far greater influence an opportunity than I could have imagined at the start we are a technology provider of choice to the largest cross section of insurers in the two trillion dollar PNC industry and trusted by them to enable the functions most constitutive of their businesses.

We find ourselves at the heart of the digital initiatives that are driving ICTI investment for the industry and we are on the frontier of exploring and mining data in ways that are transforming industry practices.

Marcus Ryu: We are the most trusted, best capitalized, most operationally capable organization to serve our market as it embraces the cloud for delivery of its core functions and storage of its data. The scale of the opportunity in this next chapter calls for the right leadership to maximize Guidewire's success within it. Three experience sets are especially apposite right now. First, product strategy: defining clear, ambitious, but feasible plans for a distributed development organization of over 700 engineers working on a complex product portfolio. Second, operational scale: serving hundreds of large enterprise customers with exacting service level expectations. Third, cloud technology: leveraging the full potential of public infrastructure and services to accelerate functional progress. In all three of these respects, I am surpassed by my successor, Mike Rosenbaum, who I believe is the ideal person to lead Guidewire's next chapter.

And we are the most trusted best capitalize most operationally capable organization to serve our market as it embraces the cloud for delivery of its core functions and storage of its data.

The scale of the opportunity in this next chapter calls for the right leadership to maximize guidewire success within it.

Three experienced sets are especially opposite right now.

First product strategy defining clear ambitious, but feasible plans for a distributor development organization of over 700 engineers working on a complex product portfolio.

Second the operational scale, serving hundreds of large enterprise customers with exact exacting service level of expectation.

And third cloud technology, leveraging the full potential of public infrastructure and services to accelerate functional progress.

In all three of these respects I am surpassed by my successor, Mike Rosenbaum, who I believe is the ideal person to lead Guidewires next chapter.

Marcus Ryu: Since joining Salesforce more than a decade ago, he has driven many of their most notable product achievements. Most recently, Mike served as EVP Product, responsible for vision, product development, and customer success for the company's incomparably successful CRM offerings. During his tenure, Salesforce has become the paradigm example of a cloud application company, simultaneously driving both innovation and global scale. Beyond career credentials, I believe Mike evinces the ideal professional character to lead Guidewire, namely ambitious, but grounded in the real capabilities of technology, highly attuned to the needs of the customer, and focused on the success of the team rather than personal glory. He has already secured the confidence of the Guidewire leadership team, all of whom we expect to continue with the company post-transition. I should make clear here that this change is happening at my initiation, with the full collaboration of the Guidewire board.

Since joining salesforce more than a decade ago. He has driven many of their most notable product achievements. Most recently, Mike served as EVP product responsible for vision product development and customer success. The company is incomparably successful CRM offerings.

During his tenure Salesforce has become the paradigm example of a cloud application company simultaneously driving both innovation and global scale.

Beyond create career credentials I believe Mike events is the ideal professional character to lead guidewire, namely ambitious, but grounded in the real capabilities of technology highly attuned to the needs of the customer and focused on the success of the team rather than personal glory.

He has already secured the confidence of the Guidewire leadership team all of whom we expect to continue with the company post transition.

I should make clear here that this change is happening at my initiation with a full collaboration of the Guidewire Board I intend to continue my journey with Guidewire as Chairman, where in addition to leading the board I will be closely engaged with the business through the transition and indefinitely beyond my role will include contributing to strategy recruiting great talent, representing the company and industry settings, and most importantly, serving the many customers to whom I have made personal promises.

Marcus Ryu: I intend to continue my journey with Guidewire as chairman, where, in addition to leading the board, I will be closely engaged with the business through the transition and indefinitely beyond. My role will include contributing to strategy, recruiting great talent, representing the company in industry settings, and most importantly, serving the many customers to whom I have made personal promises. I will also be attending to personal obligations I won't elaborate upon here, except to say that I've underserved important people in my life due to the exigencies of serving as CEO to the utmost of my ability over the last decade. Finally, I want to underscore that this change is motivated by opportunity, not by challenge. We have just closed a year of remarkable progress and have momentum beyond our expectations at the start of the year.

I will also be attending to personal obligations I won't elaborate upon here, except to say that ive underserved important people in my life due to the exigencies of serving as CEO to the utmost of liability over the last decade.

Finally, I want to underscore that this change is motivated by opportunity not by challenge. We have just closed a year of remarkable progress and have momentum beyond our expectations at the start of the year. Our press release notes that we are affirming our previously provided guidance for total revenue and we are pleased to report that during the fourth quarter, we signed six new insurance, we cloud deals for a total of nine for the year ahead of our expectations I look forward to elaborating more fully on this progress on our Q4 earnings call, which Mike Curtis and I will conduct together I now turn the call over to Mike. So he can share his perspective on joining the team.

Marcus Ryu: Our press release notes that we are affirming our previously provided guidance for total revenue, and we are pleased to report that during the Q4, we signed 6 new InsuranceSuite Cloud deals, for a total of 9 for the year, ahead of our expectations. I look forward to elaborating more fully on this progress on our Q4 earnings call, which Mike, Curtis, and I will conduct together. I now turn the call over to Mike so he can share his perspective on joining the team.

Mike Rosenbaum: Thank you, Marcus. I'd like to start by saying I'm deeply honored to be given the opportunity to serve as Guidewire's CEO. As I said in today's announcement, I applaud what the Guidewire team has achieved and deeply appreciate its values and focused commitment to the P&C insurance industry. The success Guidewire and its customer community have achieved is remarkable, and I'm excited for the opportunity to work with Marcus and the entire team here at Guidewire to play my part in our community's future success. A little bit more about my background. As Marcus referenced, I have been part of the team at Salesforce for almost 14 years, and I'm very proud of what we accomplished during that time. Most recently, I led the product management and go-to-market strategy for Salesforce's core CRM product lines, Sales Cloud, Service Cloud, and the platform business.

Thank you Marcus I'd like I'd like to start by saying I'm deeply honored to be given the opportunity to serve as Guidewire CEO .

As I said in today's announcement I applaud what the Guidewire team has achieved and deeply appreciate its values and focused commitment to the PNC insurance industry. The success Guidewire and its customer community have achieved is remarkable and I'm excited for the opportunity to work with markets and the entire team here at Guidewire to play my part in our communities future success.

A little bit more about my background.

As markets referenced I have been part of the team at Salesforce for almost 14 years and I'm very proud of what we accomplished during that time. Most recently led product management and go to market strategy for Salesforce is core CRM product lines sales cloud service cloud in the platform business. My team led the launch of the Salesforce Lightning platform and next generation user experience framework prior to that I led Salesforce is platform organization and the App exchange ecosystem.

Mike Rosenbaum: My team led the launch of the Salesforce Lightning platform, a next-generation user experience framework, and prior to that, I led Salesforce's platform organization and the AppExchange ecosystem. Prior to Salesforce, I held various technology and marketing roles at Siebel Systems, and before that, spent 5 years serving in the U.S. Navy as an officer on a submarine. I joined Salesforce when the company had approximately 1,000 employees and $300 million in revenue, and consider myself very lucky to have played a part in the incredible growth to over 40,000 employees and $14 billion in revenue. Behind those growth statistics were a series of organizational and cultural changes that we evolved through that I think created the right environment for our success.

Prior to Salesforce I held various technology and marketing roles at Siebel systems and before that spent five years, serving in the U.S. Navy as an officer on a submarine.

I joined Salesforce when the company had approximately a thousand employees and 300 million in revenue and consider myself very lucky Lucky to have played a part in the incredible growth to over 40000 employees in 14 billion in revenue.

But behind those growth statistics, where a series of organizational and cultural changes that we evolved through and I think created the right environment for our success the evolution from a single product company to a multi product company and the evolution from an applications company to a platform company, we're transformations that as a product leader with centrally involved in driving.

Mike Rosenbaum: The evolution from a single-product company to a multi-product company, and the evolution from an applications company to a platform company, were transformations that, as a product leader, I was centrally involved in driving. I'm incredibly excited to have the opportunity to bring my knowledge from this experience here to Guidewire, where I believe it will be particularly applicable. Turning to Guidewire, it's clear that the company is widely recognized as the leading software provider to the P&C insurance industry. Marcus and the team have built a great company with incredibly strong cultural values and a real sense of commitment to customers that resonated with me. These factors were a big part of my decision to join... We are well situated to become an industry standard platform and long-term market leader as we drive our transition to a cloud delivery model.

I'm incredibly excited to have the opportunity to bring my knowledge from this experience here to Guidewire, where I believe it will be particularly applicable.

Turning to Guidewire.

It's clear that the company is widely recognized as a leading software provider to the PNC insurance industry.

Markets and the team have built a great company with incredibly strong cultural values in a real sense of commitment to customers that resonated with me.

These factors were a big part of my decision to join.

We are well situated to become an industry standard platform and long term market leader as we drive our transition to a cloud delivery model.

Mike Rosenbaum: I'm tremendously excited about that opportunity, and I'm confident that my experience, specifically as it relates to cloud businesses and platforms, will ensure that we are successful in our mission. I look forward to working with Marcus and the rest of the leadership team and to meeting you at our annual Analyst Day in September at our new headquarters in San Mateo. I'll turn the call back over to Curtis now.

Im tremendously excited about that opportunity and I am confident that my experience specifically as it relates to cloud businesses and platforms will ensure that we are successful in our mission.

I look forward to working with markets and the rest of the leadership team and to meeting you at our annual Investor Day in September at our new headquarters in San Mateo.

I will turn the call back over to Curtis now.

Thank you.

Operator: Thank you. As a reminder, since we are in our quiet period, we will only be responding to questions related to this executive change. Operator, you can now open the call for questions.

Curtis Smith: Thank you. As a reminder, since we are in our quiet period, we will only be responding to questions related to this executive change. Operator, you can now open the call for questions.

As a reminder, since we are in a quiet period, we will only be responding to questions related to this executive change.

Operator, you can now open the call for questions.

Operator: Thank you. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment please, while we poll for questions. Our first question today is coming from Ken Wong from Guggenheim Securities. Your line is now live.

Thank you, we'll now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one of your telephone keypad, a confirmation told would indicate your line is in the question queue.

You May press star two if you'd like to have a question from the Q.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one.

One moment please poll for questions.

Our first question today is coming from Ken Wong from Guggenheim Securities. Your line is now live.

Hey, Thanks, a lot for taking my question and markets. This one's for you.

Ken Wong: Hey, thanks a lot for taking my question. Marcus, this one's for you. I mean, look, you're still very comfortably in your formidable years. Can you maybe just help us understand why now, in terms of the timing for this transition?

I mean like you are still very comfortable in your formidable years can can you maybe just help us understand why now in terms of the timing for this transition.

Yes.

Marcus Ryu: Yeah, the, as I tried to elaborate in the prepared remarks, there's really an opportunity for Guidewire to lead in the next chapter. It requires, you know, a different set of skills and experiences than, as rich as the Guidewire experience has been for me, than, you know, than I've accumulated over my time here. There's an opportunity to really accelerate the company's path from this point. There's a lot that I want to continue contributing. I have a huge number of relevant customer relationships, industry relationships, and the like. That can be complemented now by, you know, by a great new leader who, you know, who's actually seen what excellence looks like in the areas that we're, you know, most aspiring to excel at.

As I tried to elaborate in the prepared remarks, there's really an opportunity for guidewire to lead the next chapter it requires.

A different set of skills and experiences than as rich as the Guidewire experience has been for me than than I have accumulated over my time here and Theres, an opportunity to really accelerate the company's path from this point.

There's a lot that I want to continue contributing.

I have a huge number of relevant customer relationships industry relationships and the like.

But that can be complemented now bye.

By a great new leader, who.

Who's actually.

Seen what excellence looks like in the areas that we are.

Most inspiring to excel at.

Marcus Ryu: That's the main motivation for the timing here. I don't have another professional ambition that I'm, you know, that I'm out to pursue. I still want to do my utmost for the company's success.

And so that that's the main motivation for the timing here I don't have another professional ambition that I'm.

You know that I'm out to pursue.

I still want to do my utmost for the company's success.

Got it got it and Mike.

Ken Wong: Got it. Got it. Mike, this one's for you. You know, as you think about your skill set and what you've seen in your early days at Guidewire, what are some areas you think you can potentially improve upon? I'm not sure if you've had much time to think about what your first 90 days might look like, but any initial thoughts there would be great.

Just one for you.

As you think about your skill set and what you've seen in the early days that Guidewire. What are some areas. You think you can potentially improve upon and im not sure. If you had much time to think about what's your first 90 days might look like but any initial thoughts there would be great.

Sure. Thanks for the question.

Mike Rosenbaum: Sure. Thanks for the question. First of all, I guess I'd say it's day one, right?

First of all I guess, I'd say, it's staying one right and so.

Ken Wong: Mm-hmm.

Mike Rosenbaum: My priority, my focus for the next 90 days is to learn as much as I can about the company, about the customers, and about the industry. My perspective coming in is that there's a tremendous amount of potential here, especially as it relates, as we've discussed, and it is very clear in terms of the strategy of Guidewire, about the transition to a cloud delivery model. I think, you know, when I think a lot about value and value delivery to customers. What I've seen from my experience at Salesforce is just how powerful a cloud delivery model can be for all the constituents in the community that represents a company like Guidewire, and that's what I'm excited about.

My my priority My focus for the next 90 days is to learn as much as I can about the company and about the customers and about the industry.

Mike My perspective coming in is that there is a tremendous amount of potential here.

Especially as it relates as Weve as Weve discussed it is very clear and sort of the strategy of guidewire about the transition to cloud delivery model and I think.

When I think about I think a lot about that value and value delivery to customers and what I've seen from my experience at Salesforce is just how powerful.

A cloud delivery model can be for all the constituents in the community that represents a company like Guidewire and that's what I'm excited about.

Ken Wong: Got it. Great! I'll pass the torch, but, yeah, congrats to both of you guys.

Got it great I'll pass the torch, but congrats to both of you guys.

Thank you.

Marcus Ryu: Thank you.

Thank you. Our next question is coming from Sterling Auty from Jpmorgan. Your line is now live.

Operator: Thank you. Our next question is coming from Sterling Auty from J.P. Morgan. Your line is now live.

Operator: Thank you. Our next question is coming from Sterling Auty from JPMorgan. Your line is now live.

Yes. Thank you very much Marc this is Ben one held for Ron Congratulations on the founding and the operation and execution over your tenure I do want to follow on in terms of the the why now question, yes, as a founder every step of your journey and it's going to be one where there is going to be other people that have more experience and the things that you're about to do I still want that kind of drove back what was the impetus that made you decide that now is the right time to make the switch to someone with a different skill set.

Operator: Yeah, thank you very much. Marcus, it's been one hell of a run. Congratulations on the founding and the operation and execution over your tenure. I do want to follow on in terms of the why now question. You know, as a founder, every step of your journey is going to be one where there's going to be other people that have more experience in the things that you're about to do. I still want to kind of drill back, what was the impetus that made you decide that now is the right time to make the switch to someone with a different skill set? Anything coming from customers, anything from the industry, or any other inputs, that would be helpful.

Sterling Auty: Yeah, thank you very much. Marcus, it's been one hell of a run. Congratulations on the founding and the operation and execution over your tenure. I do want to follow on in terms of the why now question. You know, as a founder, every step of your journey is going to be one where there's going to be other people that have more experience in the things that you're about to do. I still want to kind of drill back, what was the impetus that made you decide that now is the right time to make the switch to someone with a different skill set? Anything coming from customers, anything from the industry, or any other inputs, that would be helpful.

Coming from customers anything from the industry or any other inputs that would be helpful.

Marcus Ryu: Sure. Thanks, Sterling, and thanks for your steadfast, you know, insight and support over the years, as well. You know, one of the qualities that I personally prize and that we try to, that we really value as a company is self-awareness and recognizing, you know, where one is strong and where one needs to improve. I'd say for, you know, for many years, you know, before the IPO and after the IPO, I would wake up and look in the mirror and say: Is anyone better equipped to lead this company than I am? I would say enthusiastically, No, I am the right person.

Sure Thanks, Sterling and thanks for your steadfast.

Insight and support over the years as well.

One of the qualities that I personally pricing that we try to.

And we will evaluate the company itself awareness and recognizing.

Well, one is strong the world needs to improve.

I'd say from for many years before the before the IPO and after the IPO I would wake up and look in the mirror and say is anyone better equipped to lead this company than I am and I was I would say enthusiastically no I have the right person onboard to do this.

Marcus Ryu: I'm born to do this. I would say some seeds of doubt started to creep in in the last, let's say, two years, I don't have a precise date, when realizing that the character of the tasks ahead of the company were different for this next chapter. I'm a believer that great companies that survive over decades have to reinvent themselves, sometimes in very fundamental ways, in order to continue thriving and achieve the next horizon of growth. It's clear to me that, you know, now it's a very different matter, you know, to win 100 customers or one customer than 100 customers than it is to get 1,000.

I would say some seeds of doubt started to creep in in the last let's say two years I don't have a precise date when realizing that that that the character of the tasks ahead of the company where we're different.

For this next chapter.

I'm, a believer that great companies that survive over decades have to reinvent themselves, sometimes and very fundamental ways in order to continue driving and achieve the next horizon of growth and it's it's clear to me that now it's a very different matter to win 100 customers one customer than 100 customers than it is to get a thousand.

Marcus Ryu: That with a very different division of labor, that we are committing ourselves to in the cloud, that software technology has also evolved in all kinds of dramatic ways, you know, during the time the company has existed. That there are all these other facets to, that the company will have to excel at for us to fulfill our potential, and that I could not say with absolute confidence I was the right person in every one of these for the company. The last thing I would ever want is to be a limiting factor on the company's achievement. At the same time, as I said earlier, you know, there's a tremendous amount of continuity and knowledge that just comes from having walked the walk.

That too we have a very different division of labor.

That we are committing ourselves to in the cloud that software technology has also evolved in all kinds of dramatic ways.

During the time the company has existed that they're all these other facets to that the company will have to accelerate for us to fulfill our potential and I could not say with absolute confidence I was the right person in every one of these.

For the company and the last thing I would ever want is to be a limiting factor.

On the Companys achievement.

At the same time as I said earlier, there is a tremendous amount of continuity and knowledge that just comes from having walk the walk and.

Marcus Ryu: I wanna make sure that the company continues to benefit from that, and hence my open-ended commitment to do my utmost as chairman, to see that, you know, that the company thrives in every sense.

I wanted to make sure that I want to make sure that the company continues to benefit from that and hence my open ended commitment to do my utmost as chairman.

To see that.

The company.

Thrives in every sense.

That makes sense and one follow up Mike for you.

Rishi Jaluria: Well, that makes sense. One follow-up, Mike, for you. You know, you're coming from a company that is the epitome of born in the cloud, and I think some of the things that Marcus was articulating is something we're seeing very common in some of the software companies, which is: How do you avoid the innovator's dilemma? I just wonder, as you took a look at the technology stack at Guidewire, what your initial thoughts were.

Sterling Auty: Well, that makes sense. One follow-up, Mike, for you. You know, you're coming from a company that is the epitome of born in the cloud, and I think some of the things that Marcus was articulating is something we're seeing very common in some of the software companies, which is: How do you avoid the innovator's dilemma? I just wonder, as you took a look at the technology stack at Guidewire, what your initial thoughts were.

You are coming from a company that had to be born in the cloud and I think some of the things on markets was articulating thats something were seeing very common in some of the software companies, which is how do you avoid the innovators dilemma.

And I just wonder as you took a look at the technology stack Guidewire what your initial thoughts were.

Oh, thanks for the question so.

Mike Rosenbaum: Thanks for the question. I think that the perspective I have right now is that not every industry, not every use case makes sense to be, as you say, born in the cloud, right? There are certain use cases and certain enterprise workloads that make sense to be delivered via a cloud model. There's a sort of timeline or continuum that those workloads and those applications and those use cases will follow as they transition to cloud.

I think that.

The perspective I have right now is that.

Not every industry not every use case.

Makes sense to be as you say born in the cloud right Theres certain use cases, and certain enterprise workloads that makes sense to be delivered via cloud model.

And there is a sort of a timeline or can.

Continue on that those workloads and those applications and those use cases.

We'll follow as they transition to the cloud.

Mike Rosenbaum: Now is a particularly interesting time in our industry, I believe, especially as it relates to public cloud infrastructure and cloud platforms like AWS and Azure and GCP, in that it creates an environment around which a customer community like Guidewire's and a software platform like Guidewire's can logically be run in a cloud-based environment, in a very different way than when Salesforce was founded. I think that creates a great opportunity for this company and also its, specifically its customer base, as we work on that transformation. I would also say that, you know, the challenge is that we need to do both things at the same time.

Now is a particularly interesting time in our industry I believe, especially as it relates to public cloud infrastructure and cloud platforms like eight of you asked in Azure and GCP in that it creates an environment around which.

A customer community like Guidewires and a software platform like Guidewires can logically be Ron.

In a cloud based environment in a very different way than one salesforce was founded.

I think that creates a great opportunity for this company and also it's specifically its customer base.

As we work on that transformation.

But I would also say that.

The challenge is that we need to do both things at the same time.

Mike Rosenbaum: There's a tremendous amount of important work that we need to do to ensure that the self-managed or traditionally delivered software use cases in our customer base are still taken care of and served going forward. I think that's our challenge, and that's my challenge to go execute on. As Marcus Ryu said, I would just reiterate, in partnership with him. I know you didn't ask it, but I just wanted to reiterate how excited I am that he's remaining on as Chairman, and that the leadership team is staying, and I fully expect this to be a very smooth transition.

There is a tremendous amount of important work that we need to do to ensure that the self managed store traditionally delivered software.

Use cases in our customer base are still taking care of and served going forward and so I think thats, our challenge and Thats My challenge to go execute on.

And as market said I would just reiterate in partnership with him.

I know you didn't ask it but I just wanted to reiterate how excited I am that he's remaining on its chairman and that the leadership team is staying and I fully expect this to be a very smooth transition. So.

Great. Thank you and congratulations on the appointment of Mike.

Rishi Jaluria: Great. Thank you, and congratulations on the appointment, Mike.

Sterling Auty: Great. Thank you, and congratulations on the appointment, Mike.

Mike Rosenbaum: Thank you very much.

Thank you very much.

Thank you. Our next question is coming from Michael churn from Deutsche Bank. Your line is now live.

Operator: Thank you. Our next question is coming from Michael Turrin from Deutsche Bank. Your line is now live.

Hey, there, thanks, and good afternoon, Marcus and evaluating candidates and thinking about what the right skill set could be for your replacement can you talk or expand a bit more on your views and weighing the balance between domain expertise, which is a pretty narrow funnel around PNC insurance and then broader experience with respect to scaling into the cloud.

Michael Turrin: Hey there. Thanks, and good afternoon. Marcus, in evaluating candidates and thinking about what the right skill set could be for your replacement, can you talk or expand a bit more on your views in weighing the balance between domain expertise, which is a pretty narrow funnel around P&C insurance, and then broader experience with respect to scaling into the cloud?

Marcus Ryu: Sure. You know, there was a broad set of criteria, you know, many of which, I think you would easily guess, you know, for. We had a very high bar. There was no specific urgency or deadline, although there was a goal of having this change happen at the break between fiscal years to afford my successor, you know, the maximum purview over an entire business year and its budget cycle and the like.

Sure there was a broad set of criteria many of which I think you would easily guess four we had a very high bar. There was no. There was no specific urgency or deadline, though that was the goal of having this change happen at the break.

Between fiscal years to afford my successor, the maximum purview over the over an entire business here and its budget cycle and the like.

Marcus Ryu: In terms of qualities and strengths, I would say we weighted, and in terms of my vote on it, of course, it was a board decision, was very heavily weighted towards a product strategy, and had technology orientation as opposed to a sales or go-to-market orientation. It's not to say that Guidewire has completely cracked the code on how to sell to our target market, but, you know, 18 years of specialization in serving one industry does give us some insight on how to sell and how, you know, those buying behaviors and how to build a sales organization successful at serving them. That wasn't the competency that we were going to overweight in the process.

But in terms of in terms of quality and strength.

I would say we waited.

And in terms of my vote on it of course, it was a board decision, but was very heavily weighted towards a product strategy.

And and how technology orientation as opposed to.

Let's just let's say a sales our go to market orientation, it's not to say that guidewires completely cracked the code on how to sell tool to our target market, but.

18 years of specialization in serving one industry does give us some insight on on how to sell and how those buying behaviors and how to build a sales organization successful at serving them.

And that that Wasnt, the competency that we were going to overweight.

In the in the process the the criterion that mattered a lot more as who could bring insight vision team mobilization product strategy customer orientation. So that we could have the winning platform for the long term in this next horizon.

Marcus Ryu: The criterion that mattered a lot more is: Who could bring insight, vision, team mobilization, product strategy, customer orientation, so that we could have the winning platform for the long term in this next horizon? It was natural to look at, you know, the most successful cloud company of our time, you know, as a place. Of course, it was ultimately about an individual that really had that potential, and we found that absolutely in Mike.

And.

It was natural to look at the most successful cloud company of our time.

As a as a place but of course it was ultimately about an individual that really.

Has that potential and we found that.

Absolutely and Mike.

Makes sense and then looking across the team as it stands today are there any other roles or additions you're currently contemplating.

Michael Turrin: Makes sense. Are there any other roles or additions you're currently contemplating?

No I, let me jump in there no I'm one of the things like I said I mentioned in a second ago I'm, particularly excited about the fact that the entire leadership team is committed to staying on and I think that that will just help us.

Mike Rosenbaum: No. Let me jump in there. No, one of the things, like I said, I mentioned it a second ago, I'm particularly excited about the fact that the entire leadership team is committed to staying on. I think that that will just help us continue to execute on this mission.

Continued to execute on this mission.

Thanks, Good luck to both of you.

Michael Turrin: Thanks. Good luck to both of you.

Marcus Ryu: Thank you very much.

Thanks very much.

Thank you. Our next question today is coming from Rishi Jaluria from D.A. Davidson. Your line is now live.

Operator: Thank you. Our next question today is coming from Rishi Jaluria from D.A. Davidson. Your line is now live.

Rishi Jaluria: Hey, guys. Thank you so much for taking my questions. One for Marcus Ryu and then a follow-up for Mike Rosenbaum. Marcus Ryu, first, congrats on all you've done. I think it's truly incredible to have, you know, Guidewire be one of the kind of standouts of what a successful vertical software company can look like at scale. I'm gonna be sad to see you go, but I want to go back to one of the comments you made in your prepared remarks, which was that this is coming from a place of opportunity, not a place of weakness....

Hey, guys. Thank you so much for taking my questions. One from markets and then follow up for Mike Mark just first congrats on the all you've done I think it's it's truly incredible to have.

This be guidewire being one of the kind of stand outside of out what a successful vertical software company can look like at scale.

Thats going to be sad to see you go but I want to go back to one of the comments you made in your prepared remarks, which was that this is coming from a place of opportunity not a place of weakness maybe if you could expand a little bit on that and just help us understand.

Rishi Jaluria: Maybe if you could expand a little bit on that and just help us understand, you know, why you're optimistic and maybe, you know, shoot down a little bit of the pessimism of, oh, this is happening because of some weakness in the underlying business or anything like that.

Why you're optimistic and maybe.

Shut down a little bit the pessimism about Oh this is happening because of some weakness in the underlying business or anything like that.

Marcus Ryu: Yeah, thanks for the question, Rishi. Just to not to be pedantic about it, but when you say I am not leaving, you don't have to be sad about my going. I'm, you know, I've always, if you were ever with me in a company, a company meeting or a customer meeting, you would hear after my introduction, I always say Guidewire has been serving the P&C industry as my life's work, and I would say that just as sincerely today as yesterday. That's still the case. You know, the company has tremendous opportunity ahead of us.

Yes. Thanks for the question ratio just to not to be pedantic about it but when you say I am not leaving so you don't have to be said about only going.

I am.

I've always if youre ever with me in a company of company meeting or a customer meeting you would hear after my introduction I always say guidewires and serving the PNC industry life's work and I would say that just as.

Justice sincerely today as yesterday.

Thats still the case and the company has tremendous opportunity ahead of us I would say with without any.

Marcus Ryu: I would say, without any qualification, that we have a bigger opportunity and are better equipped to, you know, to capture it today than at any point since the company's founding. That's just absolutely the case. First, the scale of the opportunity is larger. It's clear that we can play even more strategic role because of the huge, you know, division of labor that the cloud now affords us, and this year was especially exciting in that regard. You know, I'm used to our customers saying, you know, you're the most strategic vendor we have. Now they're saying that with even greater intensity, because it's not just a matter of providing the platform, but delivering a reliable business service, which is constitutive of them just doing business.

Any qualification that that we are we have a bigger opportunity and are better equipped to.

To to capture it today than at any point.

Since the company's founding this is absolutely the case first the scale of the opportunity is larger its clear that we can play.

On a more strictly even more strategic role because of the huge division of labor.

That that the cloud now affords us and this year was especially exciting in that regard I am used to our our customers, saying you are the most strategic vendor we have.

Now, they're saying that with even greater intensity, because it's not just a matter of providing the platform, but but delivering a reliable business service, which is a constitutive than just doing business.

Marcus Ryu: That opportunity, of course, if we get it right, is rewarded with much larger economic value. The opportunity is larger, and our resources are greater than ever before. I mean, we have the largest and most capable software development organization completely focused on this one industry. We're very well capitalized, and we are a magnet for talent for those that favor this kind of work. So it would be crazy to trade our hand with anyone else pursuing that opportunity. Now it's just a matter of maximizing our chances, and the speed at which we capture it, and that's what this change is about.

And that that opportunity of course, if we get it right is rewarded with much larger economic value.

So the opportunity is larger.

And our resources are greater than than ever before we have the largest and most capable software development organization completely focused on this one industry, we're very well capitalized.

And we are a magnet for talent for those.

[laughter] that favor this kind of work.

So I would not it would be crazy to trade, our hand with anyone else pursuing that opportunity and.

And that was just a matter of maximizing our chances.

And the speed at which we capture it and Thats what this change is about.

Got it. Thank you that's really helpful.

Rishi Jaluria: Got it. Thank you. That's really helpful. Mike, you know, welcome aboard. We're looking forward to working with you, and obviously have a really strong background and strong reputation, so really excited about that. Maybe I think, help us understand from your perspective, I mean, you know, Guidewire had this partnership with Salesforce, and I'm sure you know, you probably encountered that during your time when you were EVP Product at Salesforce. Maybe if you could share some perspective from kind of that integration and partnership, you know, what sort of insights you had or what sort of kind of takeaways you had out of that. Thanks.

And then and then Mike welcome aboard was looking forward to working with you and I'll just have a really strong background and strong reputation so really excited about that.

Maybe I think help us understand from your perspective.

When you know Guidewire had this partnership with Salesforce and I'm sure you probably encounter that during your time when it when your EBITDA profit that Salesforce, maybe if you could share some perspective from some kind of that integration and partnership.

What what sort of insight you had or what sort of kind of take place you add on to that thanks.

Yes sure. Thanks.

Mike Rosenbaum: Yes, sir. Thanks. Yeah, as you're probably or possibly aware, Salesforce over the past few years has been more and more focused on industry-specific use cases and even products. Very importantly, we spent a great deal of time developing what we called solution maps for each individual industry that we were targeted. I think that, you know, the relationship with Guidewire, as it relates to that incredibly important connection between core systems and the mission-critical systems that Guidewire provides with the CRM systems designed to recruit and service new customers in the insurance industry, there's probably no better example of an industry-specific partnership than this one. I think, you know, I'm looking forward to accentuating that, as I said. You know, I would...

Yes, so as you are probably or possibly aware salesforce over the past few years has been more and more focused on industry specific used cases, and even products, but very importantly.

We spend a great deal of time developing.

We called solution maps for each individual industry that we were targeted and I think that the relationship with Guidewire.

As it relates to that incredibly important connection between core systems and the mission critical systems that Guidewire provides with.

The CRM systems designed to recruit and service.

New customers in the insurance industry that is probably Theres, probably no better example of an industry specific partnership and this one.

And I think I'm looking forward to accentuating, Matt as I said, but I would you know I think.

Mike Rosenbaum: You know, I think that that mindset around that connection and that integration just speaks to the overall potential I see here at Guidewire, which is that, you know, these systems should be, you know, easier, right? I think that the approach to technology should never be the burden that prevents people from executing business strategies. I think that that common philosophy of Salesforce and Guidewire really resonated with me, and I think speaks to the potential for that relationship going forward.

That that mindset around that connection and that integration just speaks to the overall potential I see here at Guidewire, which is that.

These these systems should be easier right and I think that the approach to technical technology should never be the burden that prevents people from executing our business strategies and I think that that common philosophy of Salesforce and Guidewire really resonated with me and I think speaks to the potential for that relationship going forward.

Great Thats really helpful. Thank you Marcus Thank you Mike.

Rishi Jaluria: Great. That's really helpful. Thank you, Marcus. Thank you, Mike.

Mike Rosenbaum: Thank you.

Thank you.

Marcus Ryu: Mm-hmm.

Thank you. Our next question is coming from Chris Merwin from Goldman Sachs. Your line is now live.

Operator: Thank you. Our next question is coming from Chris Merwin from Goldman Sachs. Your line is now live.

Chris Merwin: Okay, great. Thanks very much. Mike, you're joining a company now that's in the midst of a business transition. It's off to a very strong start, obviously, but still fairly early days. Maybe, can you just talk a bit about, you know, your initial thoughts on how to manage a transition like that, going to the cloud, and specifically how to manage it from a customer and a product perspective?

Okay, great. Thanks very much.

So Mike you're joining the company now that's in the midst of a business transition it's off to a very strong start obviously, but still fairly early days. So maybe can you just talk a bit about.

Your initial thoughts on how to manage a transition like that go into the cloud.

And specifically how to manage it from a customer and a product perspective.

Yes, this might sound.

Mike Rosenbaum: Yeah, I, this might sound, I don't know, glib, but it's just a simple matter of executing operationally, you know, as perfectly as we possibly can each and every day. You know, you may not perceive this, but we've done plenty of transitions and transformations, but, you know, at Salesforce over the years, and have a great deal of experience, you know, designing, building teams to execute, and then operationally executing on those transitions. I, you know, you sort of turn it all into logical steps that a motivated team of great professionals can go off and execute. That's my management philosophy, and I see all of those things, set up to be executed here at Guidewire. I'm personally actually very motivated by that.

Glib, but it's just a simple matter of executing operationally.

Now as perfectly as we possibly can each and every day.

You may not proceed with this but we've done plenty of transitions and transformations, but you know at salesforce over the years.

And have a great deal experience of experience.

Designing.

Building teams to execute and then operationally executing on those transitions.

It's fair to turn it all into logical steps that a motivated team of great professionals can go off and execute that's my management philosophy and I see all of those things set up to be executed here guidewire.

So I'm personally actually very motivated by that.

Mike Rosenbaum: I think, I would love for us to say that, you know, we're the best example of a, you know, a core mission-critical system that's running in the cloud, in the world. I'm excited to work with the team here at Guidewire to make that happen.

And I think I would love for us to say that.

We are the best example of that.

Our core mission critical system, that's running in the cloud and the world.

And I'm excited to work with the team here guidewire to make that happen.

Great well, thanks, a lot congrats to both.

Chris Merwin: Great. Well, thanks, and congrats to you both.

Thank you Chris.

Marcus Ryu: Thank you, Chris.

Thank you. Our next question is coming from Tyler Radke from Citi. Your line is now live.

Operator: Thank you. Our next question is coming from Tyler Radke from Citi. Your line is now live.

Hey, Thank you good afternoon, so markets, obviously I think it all agree very highly regarded by.

Tyler Radke: Hey, thank you. Good afternoon. Marcus, obviously, I think we could all agree, you're very highly regarded by, you know, customers, investment community, and, you know, your employees. I guess, what are some of the areas that you see Mike, you know, could almost, you know, drive even incremental improvement relative to kind of the, you know, the course the company has been on? What are some of the areas, I guess, you see that, you know, differentiated him versus, you know, some of the other candidates that you had in mind? Thank you.

Customers investment community.

Your employees I guess, what are some of the areas.

Hi, Mike.

Okay.

Good almost.

Driving even incremental improvement relative to kind of it.

The you know the course the company has been on and what are some of the areas I guess, you see that differentiated him versus some of the other candidates.

Thank you.

Yeah, Thanks prominently and I tried to highlight a few of them in my prepared remarks, I think goes into the first of them is really product strategy. Ultimately we are a technology company and you cannot market and sell your way past a product it's not the best and we've always believed that and it's at the absolute heart of any.

Marcus Ryu: Yeah. Thanks, Tyler. I tried to highlight a few of them in my prepared remarks. I think, you know, the first of them is really product strategy. Ultimately, we are a technology company, you cannot market and sell your way past a product that's not the best. We've always believed that, it's at the absolute heart of any, you know, any long-term success for us, is having the best product. Our product portfolio has gotten substantially more complicated over time. The expectations of it have grown, the size of the team that we have is, you know, dramatically larger than it was a few years ago.

Any long term long term success for us as having the best product.

Our product portfolio has gotten substantially more complicated overtime the expectations of it have grown.

And then the size of the team that we have is.

It was dramatically larger than it was a few years ago and so.

Marcus Ryu: You know, knowing how to make that great organization function smoothly, have clarity about what they're pursuing, making the really foundational technology decisions correctly, making those right calls, that's excellence in product strategy. I have no hesitation, no false modesty in saying that Mike will do a better job with that than I, because of his background, you know, and his experience and his professional focus on it. You know, the other two operational scale, having experience with tens of thousands of customers as opposed to hundreds of customers. You know, there are not tens of thousands of insurance companies, we have a very large customer base now, and it's not just about personal relationships.

Knowing how to make that great organization function smoothly have clarity about what they're pursuing making the the really foundational technology decisions correctly, making making those right calls.

That's that's excellence and product strategy and I have no hesitation, no false modesty, and saying that Mike will do a better job with that than the NIE because of his background.

His experience and his his professional focus on it.

The other two operational scale.

Having experience with tens of thousands of customers or tens of thousands of customers as opposed to hundreds of customers.

There are not tens of thousands of insurance companies, but we have a very large customer base now and it's not just about personal relationships. It's about an institutional capability to serve all of those customers very well every single day.

Marcus Ryu: It's about an institutional capability to serve all of those customers very well every single day, especially when you're delivering a mission-critical service in the cloud. Then there's the cloud itself, where we are learning very, very fast. Our capabilities as a cloud company look dramatically different, dramatically more capable than we were 12 months ago, and they will be 12 months hence. Getting that right, not missing a step while we're making, signing on very large new customers for, you know, in large relationships, that's absolutely essential, and I think Mike's experience here will also be invaluable.

Especially when you are delivering a mission critical service in the cloud.

And then there's the cloud itself.

Where we are learning very very fast our capabilities as a cloud company look dramatically different.

Dramatically more capable than we were 12 months ago, and they will be 12 months hence.

But getting that right not missing a step while we're making signing on very large new customers for large relationships.

That's absolutely essential and I think Mike's experience here, we'll also be invaluable.

Great and maybe a follow up for Mike.

Tyler Radke: Great. Maybe a follow-up for Mike, you touched on it a little bit earlier, but obviously Salesforce had a partnership with Guidewire and also kind of had their own vertical solutions, the Financial Services Cloud, and maybe even some deeper level of expertise in the insurance sector. I guess, what are kind of maybe the 2 or 3 biggest areas you think the two companies can work together going forward? You know, is there opportunity to kind of further strengthen the partnership that's out there today? Thank you.

You touched on a little bit earlier, but obviously that.

Salesforce had.

Our partnership with Guidewire and also had there.

John .

Vertical solutions financial services cloud and maybe even.

Deeper level.

Expertise in the insurance sector I guess, what are what are kind of maybe the two or three big areas you think the two companies.

We had booked other going forward and as you know is there opportunity to kind of further strengthen the partnership that's out there today. Thanks.

Yeah. Thanks. Thanks for the question. So I think as you think about you know salesforce evolving in Guidewire evolving it has to do with just making sure that joint customers can implement the products together as effectively and easily.

Mike Rosenbaum: Yeah, thanks. Thanks for the question. I think as you think about, you know, Salesforce evolving and Guidewire evolving, it has to do with just making sure that joint customers can implement the products together as effectively and easily as we can possibly deliver. I think that's the most important thing. That's the, you know, in my opinion, the definition of a good technology partnership, is that you make it a logical choice, that mutual customers would, you know, choose you because of that partnership and that integration. I think in the future, there's a lot of different areas of, you know, as it relates to the Salesforce technology platform that offer potential, and those are all worth pursuing and looking at.

As we can possibly deliver I think that's the most important thing that's that in my opinion. The definition of a good technology partnership is that you make it a logical choice that mutual customers would choose you because of that partnership and that integration.

I think in the future there is a lot of different areas of.

As it relates to the sales force technology platform that offer potential.

And those are all worth pursuing and looking at.

Mike Rosenbaum: I think it's mostly about executing the vision behind that integrated offering, that joint integrated offering. If I could, you know, I know you asked Marcus why they picked me, but I thought it'd be interesting just to tell you. I think that there's a really important characteristic of this, at least for me, and that's cultural fit. When I got to know through the leadership team, the board, and especially Marcus, the culture of this company, I really felt like there was going to be a match here, and that I was going to fit in, and that my approach and the way that I like to work and the way that I like to lead teams and organizations is really going to work.

But I think it's mostly about executing division behind that integrated offering that joint integrated offering.

And if I could.

No, yes markets why they picked me, but I thought it'd be interesting just to tell you I think that theres. The really important characteristic of this at least for me and Thats cultural fit.

When I got to know.

Through the leadership team and the board and the specialty markets. The culture of this company I really felt like there was going to be a match here and that I was going to fit in that.

My approach and the way that I'd like to work in the way that I'd like to lead.

Teams and organizations is really going to work and.

Mike Rosenbaum: this is an incredible organization with an incredible culture, that's really focused on customer success, and serving this industry, that absolutely resonated with me. I think will, you know, it'll help me effectively lead this organization going forward.

This is an incredible organization with an incredible culture, that's that's really really focused on customer success.

And serving this industry that that absolutely resonated with me.

And I think we'll.

Well it will help me.

Effectively lead this organization going forward.

Great. Thank you and best of luck.

Tyler Radke: Great. Thank you, and best of luck.

Thank you.

Mike Rosenbaum: Thank you.

Operator: Thank you. Our next question today is coming from Pat Walravens from JMP Securities. Your line is now live.

Thank you. Our next question today is coming from Pat Walravens from JMP Securities. Your line is allies.

Hey, this is Joe on for Pat. Thank you for taking my question.

Marcus Ryu: Hey, this is Joey on for Pat. Thank you for taking our question. We were wondering when this decision was ultimately made. Thank you. Well, there's different points at which you could date it. I guess the, you know, the trite answer was that it was made on Friday, which is when the offer was formally accepted by Mike. I know there had been discussions, and a very kind of extended and open-ended search process that contemplated the possibility of, you know, of not having a successor and of continuing on the current path.

[Analyst] (JMP Securities): Hey, this is Joey on for Pat. Thank you for taking our question. We were wondering when this decision was ultimately made. Thank you.

We are wondering when this decision was ultimately made thank you.

Well, there's different points of which you could you could data.

Marcus Ryu: Well, there's different points at which you could date it. I guess the, you know, the trite answer was that it was made on Friday, which is when the offer was formally accepted by Mike. I know there had been discussions, and a very kind of extended and open-ended search process that contemplated the possibility of, you know, of not having a successor and of continuing on the current path.

I guess the.

Try to answer was that it was made on Friday, which is when the.

Let me offer was.

We formally accepted by Mike.

There have been discussions.

And the very kind of extended an open ended.

Search process that had contemplated the possibility of.

Not having a successor in a continuing on the current path.

Marcus Ryu: It was a very high bar that the board set appropriately, and well, I speak for the whole board now in saying that we were ecstatic at finding someone who cleared it by such a wide margin in Mike.

So it was a very high bar that the board set appropriately and Im just.

I speak for the whole board now in saying that we were ecstatic in finding someone who who cleared it by such a wide margin and Mike.

Thank you.

Mike Rosenbaum: Thank you.

Thank you. Our next question is coming from Matt Vanvliet from Stifel. Your line is now live.

Operator: Thank you. Our next question is coming from Matt Van Vliet from Stifel. Your line is now live.

Operator: Thank you. Our next question is coming from Matt VanVliet from Stifel. Your line is now live.

Yes, hi, thanks on for Tom Roderick today.

Matt Van Vliet: Yes. Hi, thanks on for Tom Roderick today. Mike, welcome to the team, and Marcus, congratulations on what you've built to this point and how you'll continue to shepherd the growth of the company. I guess, dovetailing a little bit on the Salesforce partnership, obviously, that's been very beneficial to both sides, it appears. Mike, curious on what you feel like, having a little bit more of an outside perspective and coming from a company that had a lot of broad partnerships around various pieces of the business, how that might approach, or that approach might be different as you look at other areas of the overall P&C market that Guidewire is serving, and how that might change a decision between, you know, partnerships versus internal build-out.

Matt VanVliet: Yes. Hi, thanks on for Tom Roderick today. Mike, welcome to the team, and Marcus, congratulations on what you've built to this point and how you'll continue to shepherd the growth of the company. I guess, dovetailing a little bit on the Salesforce partnership, obviously, that's been very beneficial to both sides, it appears. Mike, curious on what you feel like, having a little bit more of an outside perspective and coming from a company that had a lot of broad partnerships around various pieces of the business, how that might approach, or that approach might be different as you look at other areas of the overall P&C market that Guidewire is serving, and how that might change a decision between, you know, partnerships versus internal build-out.

Yes, Mike welcome the team and Marcus Congratulations on what you've built to this point and how you will continue to support the growth of the company.

I guess.

Dovetailing a little bit on the Salesforce partnership obviously, that's that's been very beneficial to both sides. It appears but quite curious on what you feel like I'm, having a little bit more of an outside perspective and coming from a company that had a lot of broad partnerships around various pieces of the business how that my approach or the approach might be different as you look at other areas of the overall PNC market that that guidewires surveying and how that might change your decision between you know partnerships versus internal build out.

Matt Van Vliet: How, you know, maybe, Marcus, you view the ability to bring in some outside talent to maybe approach different situations with a little bit different viewpoint.

And how.

Matt VanVliet: How, you know, maybe, Marcus, you view the ability to bring in some outside talent to maybe approach different situations with a little bit different viewpoint.

Maybe mark is your view the ability to bring in some outside talent to maybe approach different situations with a little bit different viewpoint.

Sure, let me to say, a few things and I'll turn it to Mike.

Marcus Ryu: Sure. Let me just say a few things, and I'll turn it to Mike. You know, I think we have really industry-focused CRM on our own was probably not a winning proposition. That there was so much core system work still to do in the transition to the cloud that was, that seemed to us inevitable, that it would have been the wrong decision to embark on a whole new, you know, a whole new functional domain, where there was already such a clear, and identified and increasingly adopted leader in Salesforce. That, I think, strategic hypothesis has been proven out over the last couple of years.

Hi.

We haven't really industry focused CRM on our own was probably not a winning proposition.

That there was so much core system work still to do and the transition to the cloud that we were that was that seem to us inevitable.

That would have been the wrong decision to embark on a whole new.

A whole new functional domain.

Where there was already such a clear and identified and increasingly adopted leader in Salesforce and that part that I think strategic hypothesis has been proven out.

Over the last couple of years.

Marcus Ryu: If there is another domain that we are very interested in, that's very specific to insurance, it's advanced predictive and risk analytics. You know, really harnessing the power of data, for very insurance-specific use cases, in the definition, the pricing, and the underwriting of products in a way that looks fundamentally different than the way the industry has done things since time immemorial. That is the other kind of grand, you know, multi-year opportunity for the company that we have been investing in. That's the other skill set that is a bit lateral to what we've done traditionally, but that we will need to buttress in the years ahead.

If there is another domain that we are very interested in that very specific to insurance. It's.

Its advanced predictive and risk analytics up really harnessing the power of data.

For very insurance specific use cases.

In the definition, the pricing and the underwriting of products in a way that looks fundamentally different than the way the industry has done things since since time and memorial.

That is the other kind of grand multi year opportunity for the company that we have been investing in.

And that the other skill set that is a bit lateral to what weve done traditionally, but that we will need to to buttress in the years ahead.

Yes, let me let me answer the part of the question you directed to me I think.

Mike Rosenbaum: Yeah, let me answer the part of the question you directed to me. I think there's two things I think that I want to explain. One is that, and I guess maybe I said it a few minutes ago, but cloud platforms like AWS make it possible to effectively run a Guidewire cloud technology platform in a way that you couldn't probably 18 years ago. That fundamental change opens up a tremendous potential for this company and for our customers. I think once you see that, if I think, you know, once you imagine that outcome, then some of the things that I had firsthand experience with at Salesforce really start to become much more achievable, maybe even potentially obvious. I think Marcus mentioned, you know, data and analytics.

There's there's there's two things I think that I want to explain one is that I guess, maybe I said, a few minutes ago, but.

Cloud platforms like eight Ws make.

It possible to effectively run a guidewire cloud technology platform in a way that you could probably 18 years ago.

That fundamental change.

Opens up a tremendous potential for this company and for our customers and I think once you see that.

If I think once you imagine that outcome than some of the things that I had first hand experience with salesforce really start to become.

Much more achievable, maybe even potentially obviously I think Marcus mentioned data and analytics for you just see an opportunity to.

Mike Rosenbaum: You know, you just see an opportunity to create a larger ecosystem around the collection of Guidewire customers that's facilitated by a cloud delivery model in a way that other delivery models just make it so that it's not as feasible. I see a real parallelism between the evolution of Salesforce and the development of the ecosystem that we saw there, and the possibilities that I see here at Guidewire. I'm so excited about having the opportunity to go execute on that.

Create a larger ecosystem around.

The collection of Guidewire customers. This facilitated by cloud delivery model in a way that other delivery models, just make just make it so that is not as feasible.

And so I see a real.

Parallelism between the evolution of Salesforce in the development of the ecosystem that we saw there and the possibilities that I see here at Guidewire and I'm, all and I'm. So excited about having the opportunity to go execute on that.

Thank you.

Matt Van Vliet: Thank you.

Matt VanVliet: Thank you.

Our next question is a follow up from Ken Wong from Guggenheim Securities. Your line is now live.

Operator: Our next question is a follow-up from Ken Wong, from Guggenheim Securities. Your line is now live.

Hey, Megan guys.

Ken Wong: Hey, me again, guys. I know, I know you guys are focusing on just the transition. I was just wanted to double-check in terms of reaffirming the guide. Does that, does that also apply to the preliminary guide for next year?

I know you guys are focusing on just the the transition, but I was just wanted to double check in terms of reaffirming the guide does that.

Does that also apply to the preliminary guide for next year.

Great care and its Curtis you know as we noted in the call.

Curtis Smith: Hey, Ken, it's Curtis. You know, as we noted in the call, while we're, you know, very early in our Q4 and year-end close process, we are affirming our previously provided guidance for fiscal 19 total revenue. We are pleased to report that during the Q4, we signed the 6 new InsuranceSuite Cloud deals, for a total of 9 for the year. We look forward to sharing information about how our business performed in fiscal 19 and our fiscal 20 outlook at our earnings call in early September. You know, given we are still in the very early days, a couple of days into our close process, we can't comment further about the fiscal 19 results or the 20 outlook.

Well, we're very early in our quarter and year end close process. We are affirming our previously provided guidance for fiscal 19 total revenue.

And we are pleased to report that during the fourth quarter, we signed six new insurance, we cloud deals for a total of nine for the year.

We look forward to sharing information about our business performed in fiscal 19.

And our fiscal 20 outlook at our earnings call in early September .

But given we are.

Still in the in the very early days a couple of days into our close process. We can't comment further about the fiscal 19 results.

Or the 2020 outlook.

Got it fair enough I figured I'd give it a try thanks guys.

Ken Wong: Got it. Fair, fair enough. I figured I'd give it a try. Thanks, Curtis.

Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mr. Smith at this time for any further or closing comments.

Thank you Weve reached end of our question and answer session I'd like to turn the floor back over to Mr. Smith at this time for any further or closing comments.

Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mr. Smith at this time for any further or closing comments.

Thank you all for participating on our call.

Curtis Smith: Thank you all for participating on our call. Marcus, Mike, and I look forward to speaking with you when we report our Q4 results, as well as seeing those of you attending the DB conference that follows and our annual Investor Day at the end of September. Goodbye.

Marcus Mike and I look forward to speaking with you when we report our fourth quarter results as well as seeing those of you attending the DB conference that follows and our annual Investor day at the end of September .

Goodbye.

Thank you that does conclude today's teleconference. You may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.

Operator: Thank you. That does conclude today's teleconference. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

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