Guidewire Software, Inc. (GWRE)

Investor Day 2021

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Sep 30, 2021

I'm going to speak to the whole team when I say we wish you could have done this presentation in person this year, but we are thrilled that you can join us at least virtually and that we're able to do it shortly after our fiscal year end and Q4 results where I think we've demonstrated real momentum with the Guidewire Cloud Platform. Today is going to be a chance to dive into that in a little more depth, and we've got a great lineup of speakers. Starting today will be Mike Rosenbaum, our Chief Executive Officer, who will give you a corporate overview and then talk about how we're powering CNC on the Guidewire Cloud Platform. Next will be Priscilla Hung, our President, who will talk about what we're seeing from customers as they move to the cloud and how we're driving adoption. Then Christina Colby, our Chief Customer Officer, will talk a bit about the customer success program we put in place and do a Q and A with a couple of customers to give you a chance to sort of hear from them directly and submit some of your own questions. So we're very excited that we're able to add that to this year's Analyst Day. We'll take a quick break. We'll come back. And then Diego Duvall, our Chief Product Development Officer, will, along with Roger Arnhemann, our General Manager of Analytics, give you an update on how we're executing on the Guidewire cloud platform. And then Jeff, our Chief Financial Officer, will finish on how we're executing into a cloud model. I'll finish today with a Q and A session with all of the execs that should last around forty five minutes. And the day should finish around 4PM Pacific Time or 7PM Eastern Time. So if you have any loved ones that are asking you when you're going to be able to leave the office and come out and play, that should give you an idea. Now before I hand it over to Mike, let me just say that this presentation does include forward looking statements and those are subject to risks and uncertainties. And I would invite you to read that at your own region. Hello, everybody. My name is Mike Rosenbaum. I'm the Chief Executive Officer here at Guidewire. And I, first of all, want to say thank you very much for joining us today and sharing some time with us, giving us an opportunity to talk to you about our company and how excited we are about the short and long term prospects for Guidewire. And I think in order to understand Guidewire, you really need to understand the property casualty insurance market. For our twenty year history, we have chosen to focus very specifically on serving this one individual industry. And so in order to understand us, you really need to understand property casualty insurance. The massive global market, it touches almost everything on earth and it provides a very unique role in providing protection from catastrophe driven loss. So here's our picture of the market, right? This is almost over a $2,000,000,000,000 a year industry spread across Americas, EMEA, Asia Pacific. And it's actually also a very concentrated industry. There's really only about 2,000 insurance companies in the world, very difficult to be an insurance company. And even within that, the market is very concentrated into the top 60 over $5,000,000,000 and over in the top 300 from $1,000,000,000 to $5,000,000,000 And that's where Guidewire traditionally has provided a very significant amount of focus is on this Tier one and Tier two insurance market, which covers the vast majority of this $2,000,000,000,000 2 point 5 trillion dollars in direct written premium written every year. The other thing about property casualty insurance is it plays this incredible role in our society and in our economy. If you think about almost every single person in the world touches in some way CNC insurance, whether through personal lines insurance that individuals and households have or commercial lines insurance that cover things that businesses need to operate. And this isn't something that we think about every day, but it really is very fundamental to the effective function of our society and the effective function of our economy. And doing property casualty insurance well helps facilitate all of these operations, all of these things work more effectively. The other thing that it does, which I think is very, very unique and very important, it provides protection against growing catastrophe risk and actually also growing cyber risk. And if you think about climate change having a bigger and bigger impact on catastrophes occurring, you think about the growing concerns about cyber and cyber related loss. The P and T industry actually has a very important role to play in connecting global wealth and finance to the risks associated with climate change and cyber. We think that there's a pretty significant disconnect between the amount of catastrophic loss every year and the amount of insurance that the industry is able to provide. But our expectation, I think the expectation of the industry is that innovation in the PMT industry that we're excited to be able to help foster can help close this divide and provide better coverage for these growing risks. So look, at Guidewire, we strive to execute a pretty simple mission every day, and that's to power insurance innovation by providing a cloud platform that the industry can trust to engage, innovate and grow more efficiently. This is what we do each and every day as we think about building a technology platform that the industry can use, that our customers can use to innovate and improve the state of P and C Insurance. And we've been very, very lucky to have the opportunity to serve our customers for over twenty years. We've been very successful. We have over four fifty insurance brands running on Guidewire right now and touch about 22% of profit casualty direct written premium in the world across America, across EMEA, across APAC. And we were just recently named the leader in the Gartner Magic Quadrant for P and C core platforms for the actually for the seventh consecutive year. But we're not resting. We're continuing to push. And I think in order to really have an appreciation for what we do, I wanted to spend a few minutes and talk to you about what we mean when we think about Guidewire as a platform for the P and T industry. So a modern core platform for a P and T insurer starts with this core system of record. And that core system of record is fundamentally what Guidewire provides to our customers. It supports underwriting processes, policy administration, claims management and billing processes that every P and T insurance company in the world needs. And the vast majority of these systems are still, even to this day, running on legacy name training technologies and they need to be modernized and they need to be brought forward into modern systems that enable our customers, that enable P and T insurance companies to engage, innovate and grow efficiently with their customers. Now, what's interesting to me about the P and T insurance technology challenge is that almost everything that we do that is interesting revolves around the core system, whether or not it is being able to digitally connect to their customers and to insurance agents with personalized products and omni channel experiences. These digital interfaces, these digital solutions, they need to connect in real time to the core system of record. And everyone's talking about in the world, the impact of analytics upon business process and business decisions. On the property casualty insurance industry, those analytics initiatives are dependent upon access to the core system of record. Modern analytics solutions with machine learning and artificial intelligence, it is absolutely necessary that they're connected in real time to the underwriting and claims business processes that end users are using to make these decisions. That is data, right? And the insurance industry has always leveraged significant amounts of data to better make decisions and better predict the future. But we think that's actually new and new universes of data that are collected in sort of math on behalf of the entire industry can provide better insights and allow these companies to make better, more informed decisions connected right back again into those core systems of record. And finally, these systems need to be pre configured for the specific lines of business and the specific regions and the specific regulatory requirements that every single P and C insurance company deals with. It's a very, very complicated and highly regulated industry. And so to the extent that these systems, these power systems can come with the pre based content that enables them to get to market and grow more effectively. That makes growth initiatives more effective. That makes these transitions, these transformations to modern systems faster and easier. And again, it's all dependent on the configuration of that core system. So that was my high level view of what Guidewire does. And here's a little bit more of the specifics around our cloud platform. We've spent the last couple of years completely transforming what we do at Guidewire to turn InsuranceNow, InsuranceSuite and our analytics offerings into cloud native, cloud ready services that our customers can access really at any point in any region in the world. We're built based on a very strong partnership with Amazon Web Services to provide regional support, backup data recovery. But then we've invested a very significant amount into the Guidewire cloud platform that takes these core systems and makes them available to our customers, updates them in real time, delivers the claims and billing and policy solutions, all with access to backwards compatible integration services and APIs and a modern digital experience that facilitates their ability to connect those business processes to really anybody in the world. It's all supported by a marketplace of applications and an ecosystem of systems integrators that facilitates our ability to do this unlike any other company in the world. I'm not going to talk too much more about the technology. You can hear more in the presentation from our Head of Development, Diego DiVale and our Head of our Analytics Business, Roger Arneman. And they're going to go into a lot more detail about all of this. I want to talk now about the opportunity that that technology platform presents us at Guidewire by expanding into more use cases and more customers. Guidewire right now is about $700,000,000 a year if you consider our fully ramped value of the contracts that we have signed. We're at a $700,000,000 a year ARR company. That's what you see in the bottom left blue box. And when we think about just our current customers, expanding the DWP or direct written premium that we touch with our core systems and expanding into a full suite of products that we can sell just to our existing four fifty customers, that turns into about a $3,000,000,000 ARR company. Then if you think about the new customers, adding new customers to our company's footprint, that adds an additional $10,000,000 of total addressable market. And then when you think about adding analytics and data offerings that can complement that core system, on top of that, you add about $8,000,000,000 When we look at this, you say, okay, we're about a $700,000,000 fully ramped ARR company. Do we have the potential to grow? I look at this slide and I think absolutely, yes, we have a very significant opportunity to grow with our current product footprint. I want to talk a little bit about cloud, cloud adoption and the potential that exists, dig a little bit deeper into the potential that exists just within our customer base. So if you look at these slides, we break it down for you by tiers, right? Tier one, tier two, tier three, the size of the insurance company that we're focused on. If you look at Guidewire Cloud, it's the dark blue wedge in these pie charts. That gray wedge is the self managed install base that we've been able to build over our twenty year history. Now we expect to convert over time 100% of that gray wedge, of that gray segment into cloud. And that creates an upsell opportunity because on average, we tend to gain ARR at about two to three x when we convert a self managed customer to a cloud customer. And that creates a growth opportunity for us. But as you can see here across all three of these tiers, there are very significant opportunities for us not just to expand our cloud offering to our existing customer base, but to also use that same platform and expand for the untapped potential the customers that have not yet modernized, the customers that are not yet leveraging Guidewire as a core system. This next slide typically gives you the same perspective, but it breaks it down by region. So as you can see very clearly, Guidewire Cloud has had its most success in The Americas. Not at all surprising, I think it's the first region to really adopt cloud, at least in the P and C insurance space. But we fully expect that those cloud wedges in EMEA, those cloud wedges in APAC will expand as we convert our self managed customers in EMEA and APAC. We will gain traction in the cloud in those other regions. We'll take the traction we already have and continue to expand. But then you can see that there's a very, very significant opportunity to modernize core systems to get a greater percentage of the DWP in the regions outside of Americas. But again, I'd say the fundamental takeaway of all of these slides is there's a very significant opportunity for us to continue to grow, continue to accelerate our ARR as we proceed to sort of steadily and in a determined way continue to modernize core systems and continue to move core systems to our cloud product offering. So we always get asked and I wanted to cover it just very briefly about competition. Guidewire is not the only company in the world that has recognized this opportunity, the value potential in modernizing core systems. We fiercely compete for every deal that we have. And these two charts, our goal is to show where do we fit in that competitive decision making process and what percentage of the competitive deals are we winning, either based just on decisions and count or based on DWP. As I told you before, we pay particular attention to a focus on the Tier one and the Tier two segments of the market because that's where the vast majority of the direct written premium is written in the industry. And so that for us is very important to sort of maintain our lead, maintain our focus and continue to win our fair share of these decisions. So the next section of this presentation, I want to talk to you about what I see as the sort of four key pillars that are necessary for us to execute on to take advantage of this opportunity. Number one, we need to just continue to grow cloud adoption and delivery. Number two, we need to focus on a repeatable product innovation cycle that proves the value that we're able to deliver to our customers in the cloud. And next, we need to be able to embed innovative data and analytics solutions to not only differentiate our core offering, but also to create the product footprint that's going to enable us to expand into that next layer of the market opportunity for Guidewire. And finally, we've continued to expand our partner ecosystem and marketplace. I'm going to go into each one of these three things. For the past three years, InsuranceSuite cloud sales really have grown, right? And this, I think, is the best indicator of how well we're doing transforming Guidewire as a self managed product into Guidewire as a cloud platform. You can see pretty great, great growth, basically doubled from fiscal year 'twenty to fiscal 'twenty one. And we layer on top of this the market presence and growth that we also have in our InsuranceNow suite. The combination of InsuranceNow and InsuranceSuite, we have almost 100 cloud customers now running the Guidewire cloud platform. And then you think about behind every single one of those sales, there is a really complicated implementation. There's a complicated upgrade, there's a complicated implementation, and then eventually, there's a production go live. And so the real true measure of our cloud success is how many production customers do we have running InsuranceSuite in the cloud. This is a major transformation that's been going on at Guidewire for the past three years. When you look at the slide, you can clearly see that momentum happening in fiscal 'twenty one getting to 16 production InsuranceSuite cloud customers is a phenomenal milestone for us and the growth rate that you can see here is really testament to the progress that we've made convincing customers, but also on the product side being able to support 15 production customers. Now based on how many we've sold last year, we expect this growth rate to continue and this chart will just keep on going up into the right as we move all of our customers to production on our cloud. Okay. So now I want to talk to you a little bit about the product. And I'm not going to spend too much time on it because like I said, we've got a whole section in the presentation on product. Probably I think the most transformational thing that we've done at Guidewire, maybe not exactly just moving our solutions to cloud, It's actually instantiating a new cycle for product innovation and a new mechanism, a new philosophy about how we deliver that innovation to our customers, right? We shift from a two year product release cycle to a six month product release cycle. And at this point, as we stand sort of on the cusp of releasing Dobson, our fourth cloud release, I am very confident that this new approach, this new mind set in our organization is completely instantiated. Our ability to, number one, release new versions of the product every six months, but number two, instantiated a philosophy about backwards compatibility and making those updates, making those changes and delivering them in such a way as the customers can just immediately take advantage of them, that's a very fundamental shift that we've been able to make here at the company. And I think when we look back on it five or ten years from now, this will end up being so critically important to how we operate and the value that we're able to deliver to our customers. So I hope you're looking forward to hearing from Diego later on in the presentation about some of the exciting things we're delivering in adoption. Next, I want to talk to you about analytics, okay? So interesting perspective here is that we already have about 50% of the deals in our last fiscal year that attached at least one of our data or analytics products. Now it's a great number. It shows you that sort of about a half of the deals that we're doing are where we're thinking about a complete package that includes core and includes analytics. I'm personally not going to be satisfied. And so we drive that number higher, but I think that the potential obviously exists. What's so interesting to me about this slide and also the industry is just how vast the opportunity is for us to add value to core systems through data and analytics offerings. Whether or not we're helping S and P quantify cyber risk and building out a financial model based on our science product offering or whether or not we're working on pricing accuracy or better segmentation or better improving buying experiences. At every single company that we work with, at every single insurance company, there is an opportunity to leverage data and analytics across some aspects of their business process and enhance the value that they're able to deliver to their customers and improve the efficiency around which they're able to operate. I'm incredibly excited about where we are in the journey and how working together, cloud, advanced data with analytics, we're going to be able to do something, I think, very transformational for our industry. Let me talk a little bit about our ecosystem. Guidewire success is absolutely dependent on very, very close partnership with some of the leading systems integrators in the world. We have 66 consulting partners, over 13,000 Guidewire trained consultants. And the statistic that we're most proud of is 2,300 of those consultants are now certified on our cloud offering. That to me, the growth in that SI ecosystem and especially the growth in the cloud certified consultants, that really indicates how everyone in our ecosystem, all of our stakeholders really see that this cloud transformation is happening and that will basically create the horsepower we need in order to be able to do these modernizations, do these cloud upgrades and really take advantage of the potential that exists within the Guidewire product suite. So the other side of the partner equation is our marketplace, okay? And the Guidewire marketplace truly accelerates innovation and lowers the cost associated with implementing all of these solutions. Now very often a Guidewire core implementation will involve hundreds of different integration points. And by packaging those integrations, by packaging the connection between Guidewire and any one of these other services, we can basically make these sort of plug and play approaches to the implementation that significantly reduced the extent of the implementation and significantly enhanced the innovation that our customers are going to be able to deliver and extract from their investment in Guidewire. I'm personally very excited about this because I think that as we move our customer base to the cloud, those cloud customers get a much more robust and modern API framework in order to be able to integrate to other solutions. And when you think about the billions and billions of dollars that are being invested into the InsurTech landscape, all of those investments end up as potential partners for Guidewire. And to the extent that we can make those partnerships sort of plug and play integrations that you can download from the marketplace, this whole system is going to start to accelerate. And the value that each customer gets from the cloud is going to be significantly enhanced by the over seven thirty applications that are already on the marketplace. This is one of those things that I keep watching. I hope you all keep watching. As we evolve release after release, we just improve and improve and improve and the sort of collection of applications that our customers have to choose from advances right along with our cloud adoption. Okay, last slide for me before I turn it over to the rest of the team. I just wanted to focus you all in on this kind of one specific one number, one measure that I use to think about are we making progress? Is the company headed in the right direction? Are we really doing everything across all the facets, all the functions with Guidewire? And what's that one singular measure of whether or not we're successful. And for me, that's cloud ARR. You can see here for the past four years, cloud ARR has grown at about 64% each year. And we just had a phenomenal year in 2021. And as we make this transformation as a company to being a cloud company and as the industry takes advantage of the potential that our cloud offering presents, this number will just continue to grow and grow and grow. And soon, maybe the real milestone for me is when cloud ARR is no longer really distinct from regular ARR at Guidewire. But I wanted to share this with you. We're very proud of this measure of the ultimate view of our success and our ability to execute across all these dimensions. Okay. And so that is the end of my presentation. And now I'd like to turn it over to Priscilla Hung, our President and Chief Operating Officer, and she's going to talk to you about the programs and the approach that we're taking to driving cloud adoption in our customer base. So thanks very much, and I'll see you in the Q and A. Good morning. I'm Priscilla Hung, President and COO of Daiwa. As Mike showed earlier, Yawai Cloud is the only cloud platform in the P and C insurance market that spans all tiers and geographies. It scales from the small Tier four and five to the biggest Tier 1s, catering to regional players, national and global insurers alike. Allied Kyle also supports the need for both net new customers launching new line of business as well as in TileBase upgrade to the cloud. While the P and C global market is big at $2,500,000,000,000 a year, only 22% of the global DWI today is touched by a drywall core system. And remaining 78% not using drywall today, 50% of those are still using mainframes, which is constrained by inflexible old technology that poses challenges for carriers to respond to the rapidly changing market dynamics and also present obstacles for them to access innovation. While we have made tremendous progress so far in market adoption of Power BI Cloud with more than 50 insurance free cloud and more than 40 insurance cloud customers today, we're still early in the journey of cloud transition where roughly 15% of insurance suite installed base adopted insurance suite cloud. There are clearly tons of growth opportunities ahead for the IRR. With extensive coverage, we're the only cost solution in the market uniquely positioned to capture the lion's share of the available market in both installed base as well as legacy core transformation to the cloud. The value proposition of Gaibar is significantly improved by Gaibar Cloud. Galway Cloud transfers the risks and responsibilities of core application management from the customer to Guidewire in a utility like model. It operates on a purpose built, secure and scalable platform with our carriers in house operational overhead or capital expenses, which allows carriers to focus on business agility, a strategy that matters the most to the business. The salaries peak to market may to be launching a new product with expansions into new geography or market segments. YY Cloud is responsible for the underlying infrastructure and soft cadence updates, eliminated the need for carrier to execute resource intensive upgrades. Allied car platform also offer API framework with preview integrations, allows fast access to innovation and lower cost of ownership. Carriers can take advantage of the flexibility of the car platform to take the best path that fit their needs, risk appetite and speed. Huawei Cloud allows carriers to start small and grow big, as in the case of greenfield and test and learn initiatives, or adopt a safe approach to migrate an existing big book of business from self managed to the cloud. Carriers take advantage of the elasticity of the cloud to rapidly spin up prototype as in test and learn innovation lab projects or launch a greenfield line of business, making available new products to the market as fast as three months. We allow carriers to get familiarized with operating under car modality, identify organization gaps, change management, etcetera, as well as gaining experience before taking the existing large book of business to the cloud table. That side, we also have customers who are ready to move the existing book of business directly to the cloud immediately with the desire to take advantage of the benefit of DIY cloud without delay. We have the P and C insurance industry's largest partner ecosystem. Based on our experience, integration typically account for up to 60% of the total project cost. Solution partners accelerate value creation, lower cost of ownership and implementation via prebuilt integrations available for download in the marketplace today. We have 130 solution partners, a 43% increase in membership compared to over a year ago. Our customers' access to open, flexible plug ins allow them to access a wide range of innovation pre wired to Dialog cloud, which significantly reduce the complexity and cost of integration. On the system integration front, we also have the industry's largest SI ecosystem with over 2,300 cloud certified consultants, a more than 266% increase from a year ago. And over 13,000 consultants is in various data practice worldwide, more than 25% growth from a year ago as well. In addition to working alongside our customers and driver professional services to execute cloud upgrade and implementation projects, our SI partners act as valuable strategic advisor to help our joint customers define the broader cloud migration and enterprise data center strategy. They also provide expertise on organization change management, advisory, product audit work and how DynaWife fits into that larger context as well. While our target market is vast, it is inherently reverse, thoughtful and conservative. Customers' successful adoption of Gaara Cloud serves as a critical proof point for others in wait and see mode to gain confidence to follow suit. It looks like a well oiled flywheel, one that we have already seen spin faster and faster. Successful Gala Cargo lives in the last year have led to more market increase interest as well as customer adoption of GalaCloud, both in new and installed ways. Our job every day is to ensure every single customer project is successful. More successful car projects yield more proof points, which will then give us more credentials and in turn yield more customer adoption, ultimately driving more DWP through Yawai cloud. Adopting the cloud is a consequential decision for our customers. We've always leaned into customer success as our mantra since the founding of the company. Our approach with Jaguar customer success is very simple. Not only we actively manage each cloud project closely alongside with our customer and our partner, we provide daily attention and care that differentiate us between a technology vendor versus a strategic partner to our customers. We work in concert with customers to develop what success looks like to them and carefully and methodically ensure we aligned our technology roadmap and capabilities to prepare business aspirations and provide support our customers need to achieve their ultimate goals. With that said, Christine Colby, our Chief Customer Officer, will provide more details about our customer success program and our approach. Thank you very much. Thanks, Priscilla. Hi, folks. My name is Christina Colby. I'm Guidewire's Chief Customer Officer, and I'm thrilled today to be sharing a little bit more about our customer success program as well as to introduce you to a couple of our customers. So first, give me a moment and I will share a little bit about some of the things that we do within our customer success program. In particular, we've been very careful to be able to ensure that we're making the most of our customers' investments in Guidewire Cloud. And to do that, we've defined our path to success. Our path to success is oriented not only to help our customers to ensure that they are defining a plan that will help them to get the most out of their Guidewire investments from a technology standpoint, but of course in terms of the business outcomes that they want to achieve. But additionally, our path to success is very focused on getting them live in production and then really taking advantage of the roadmap that we offer, both allowing them to use the technology advancements and enhancements that are included, but also to really figure out how to unlock an additional level of business value. So not only is it something that we champion within our customer success organization, but it's something that we've been able to orient our entire organization around these key milestones for our customers. We do this really in a few different areas. And this is where the cloud model goes beyond just the technology true partnership with our customers. So there's a few different areas here that are highlighted that we think offer significant incremental value to our customers. In particular, we ensure that we have an executive sponsor assigned to each of our customers so that they have the right level of influence and leadership excuse me, influence and connection into our leadership team. We also assign a customer success manager who works in concert with our customers day in and day out, not only helping to define what they need to succeed in the program, but also to be able to capture a joint success plan that really looks at what the objectives are over multiple years, both from a technology and from a business standpoint. And ultimately helps to decipher what the roadmap means and brings that into our joint multiyear success plan. We also offer a significant amount of technical expertise. So that if one of our customers was to choose to do a Guidewire cloud program themselves, if they want to use Guidewire delivery services, if they choose to use one of our many systems integration partners for some combination therein, they have an opportunity to have a very strong amount of technical guidance to help them to make some most out of our cloud solutions. And finally, we give them the right to see guidance and focus that not only are they successful in their initial implementation, maybe in a couple of subsequent releases as they roll out their capabilities across their own organization and to their respective customers, but also to really ensure that they're making the most of the roadmap. I've mentioned that and that's something that is really a strong emphasis and area of focus for us. But I can continue to tell you about this. I think it really means so much more when you hear it from our customers. So I'm happy to be able to introduce two of our customers who are joining us here today. I'm thrilled that we have Raj Uvraja as well as Greg Flueger joining us. Raj is the Head of Omni Product Engineering from VoreMutual. And in fact, after unfortunately one of our other panelists fell ill this morning, Raj has actually stepped in today. So we are extremely grateful for his flexibility to be able to join us. And we have Greg Pfluger as well, who is the Head of Enterprise Systems Transformation at American Family, who's been a very long standing customer of ours. One of the things that I would welcome the audience to do, there is a Q and A as well as a chat panel down at the bottom. I'll keep an eye on those as we go through the course of conversation. We have a couple of prepared questions, but we would love to be be able to answer your questions live. So if you have any questions, please feel free to submit them throughout. Just as a matter of expediency at least in this portion, we won't be promoting you to a panelist, although of course we will be doing that later this afternoon when you want to keep those provider leadership. But for this portion, please feel free, raise your questions and I'll keep an eye on those and I'll ask them to Raj and to Greg on your behalf. So without further ado, I am very excited to be able to have these two folks with me today. Thank you so much for joining. It's great to see you both. How are you? Thank you, Christina. It's great to see you all too. Brett, I'm I'm doing well, given this change and working with everything for sure. I happen to be calling from an Airbnb in Northern Wisconsin because my son goes to a a boarding school for the arts, and it's funny. Well, it's it's a great connection with both of you, which I I love. And, and Greg, I see a splash of art in your background which, I guess, blends into to all the creativity you'll see this weekend. Excellent. Well, thank you so much for joining. I really appreciate it. So why don't we get started in the conversation. And just for the audience's awareness, you'll hear through the questions that we go through. This hopefully is a really ideal balance between customers that you'll be able to hear from. We have Core Mutual, who is a newer customer of Tidewater. They have an opportunity to experience our systems for the first time directly being a cloud customer, which is great. And then as a complement to that, as I mentioned, American Family has been a longstanding customer of ours. Greg has also had Guidewire experience even prior to his time at AmFam. And so we're able to really look at how Adware Cloud is now continuing the longstanding and terrific partnership that we have with American Family. So we're grateful to have both of those perspectives here today. And also they are both production customers, which is great. Gore is actually rolled out across their agents, which I'm sure you'll hear Raj talk about. And Greg will talk about the fact that they're just now starting their business rollout. So some very exciting time. So gentlemen, why don't we actually jump in and get started. Raj, if you don't mind, could you share for everyone a little bit about Four Mutual and your role with the organization? Thanks, Christina. Four Mutual is a 180 old agency insurance carrier in Canada. We operate from Ontario and from Cambridge, which is around a hundred kilometers off of Toronto. And this project, Kai Yui transformation project, is one of the largest transformation company in the IT organization in about one hundred and eighty years. In fact, Gold Mutual is the first insurance carrier in Canada that has successfully implemented quality center, billing center, and training center on wide wide cloud platform, and we went live in production in July. The business objectives that were set by our business partners have been met and the platform has been functioning very smoothly. That's great. Thank you so much for sharing that. Obviously, I'm familiar with it, but really appreciate you sharing it with the audience. Greg, would you mind telling everyone a little bit about Amtam the call? Sure. I guess American Family is practically a startup compared to Gore because we're only about 90 years old, not 180 years old. But I joined American Family about twelve years ago and was specifically hired to lead a transformation effort shortly after American Family signed their first contract with Guidewire. They had previously been Guidewire, I believe, the second policy customer and the first billing customer when I was the CIO at Century Insurance. And the American family that I joined was pretty sleepy regional carrier about 7,000,000,000 in size. And shortly after that, we got a new CEO who had some more ambitious plans for growth. So we've done a number of acquisitions to the year. And we're about double in size in demand joint, so about $14,000,000,000 carrier now. Almost all P and C, but we do a little bit of life as well. And for P and C, we both do personal lines and commercial, but mostly personal lines. Great. Thank you so much. I really appreciate it. So one of the things I'm sure the audience is quite interested to hear about is really sort of what made you select Guidewire Cloud. So Raj, maybe if you don't mind, I'll start with you. I know the selection process as you were looking at all of the possible solutions you could go to, that happened actually before you joined the organization. So if you wouldn't mind maybe just recounting a little bit about sort of what drove the selection process, maybe other companies that you looked at as well and just to give a sense of what that entails? Thank you, Christina. Yes, so when I joined, I reviewed the selection process that had happened to choose FireWire, and there were multiple selection criteria around flexibility with the platform, how it aligns with the product business strategy that we wanted to achieve. Speed to market was the criteria. And given that how the entire ecosystem is growing and it's getting direct to consumers along with the proven ecosystem, we wanted scalability and flexibility on the platform price. FireWire cloud classic was available at that time, so the organization has compared with FireWire cloud classic platform and we have plans to move to the FireWire cloud in future. That's right. Yes. I know the program is moving at such a speed as much as we wanted to get you on GWCC in the course of it. It was moving a lightning speed, which I know we will come back to that in just a moment. Greg, as you mentioned, American Family had made the selection of Guidewire a while ago. We've been working in that platform. We've been working together for quite a while. Could you talk a little bit about actually sort of your selection process and looking at Guidewire Cloud specifically? Yes. So we started looking at Guidewire Cloud up two years ago. And we first started looking for the one operating company, the traditional American Family brand that was already using Guidewire software across the suite. So altogether, we had about a quarter of our premium on policy and billing center and about half of our premium equivalent managed by training center. And two other operating companies also have selected Kamehameha Center through the years. So we had a variety of headwear experience. But across the enterprise, we have a half dozen other mostly Tier two practice solutions. And then we also entertained our next generation software being something we would build ourselves or we partner with a startup with and things like that. And with Guidewire, it was really about ensuring that Guidewire could really have the cloud commitment that we had. Because ultimately, the transformation we were doing is to consolidate redundant platforms we had across all those operating companies and redundant insurance companies in order to better share innovation and to drive a lot of costs out of the organization. And we definitely wanted a cloud platform to do that. As an example of hearing innovation, a real easy example of that is usage based insurance for the auto market. We have one of our operating companies that is on the fourth generation of UBI product. And then we have at least four other operating companies that sell some type of auto insurance that's given to UBI. We'll rather investing in UBI four different times. We would rather be on a common insurance product and common platform, so we invest in it once for our various distribution channels. And that type of consolidation was really as part of our decision both to move to a kind of platform and specifically to prefer a cloud based solution. And we made that decision about years ago and committed to Guidewire SD in that platform. That's fantastic. Thank you so much. I love thinking about it as sort of the technology as a catalyst for the business change that you're describing about because, of course the exciting work that you're doing across all the operating entities, it's definitely a significant undertaking. As an advocacy for that business driver like, honestly, we would probably be moving to cloud at a much slower pace because it would have been more as part of a technology upgrade cycle, which makes all the sense in the world. But you might do that every five years when you got to replace hardware or something. And so we really prefer to have things have a pure business forever like that, that we're actually moving the business forward and sharing innovation and sharing products across the enterprise. Which is great. So Greg, maybe building on that a little bit, could you elaborate about some of the specific components of the business space that really resonated with your business partners? Yes. It's always a challenge of what you say when you talk like hard measurable savings, benefits versus more speculative. So we have a pretty decent business case just on the high fee savings that you get by consolidating platforms and legacy retirement. Actually, recently, my job has changed specifically on that to make sure we actually get those benefits because there's plenty of companies that implement a new system and never retire the old. So those benefits were hard benefits that gave a business case but not a great business case by itself. And then on top of that, we looked at our cost to develop insurance products and where we have redundant costs. So across the enterprise, we have over 700 different programs, so combination of product and state combinations that we have today. So we want to be able to significantly reduce that. And then we looked at operational cost savings outside of IT, so where maybe older systems don't see the flexibility that a newer system would be. So there's a more manual process of that and where we can reduce those. And those are all different types of hard cost savings. And then more speculative is what we expect to get in new business class with or improve customer retention by doing better customer experiences, giving better product offerings like usage based insurance or on the home side, connecting with more IoT solutions. We have some homeowner innovation where we do faster homeowner quoting that we want to share across operating companies, things like that. And so those benefits are about new business lift or about their retention and a little bit harder to quantify. But it's really those that drive what we're doing more than anything else. That's fantastic. Thank you so much. You actually touched upon quite a bit of this as you were talking, but I do want to just ask you. There's a question that was made by one of the audience members, Jay Warner. And he asked, when you think about your move to the cloud, how much of the selection process depended on one, fearing the end of life for the on premise hardware solution for our self managed solution? Or two, how much better the software was in the cloud via real time updates versus the kind of things that you would have to do waiting for on premise updates that could take a while to install test and implement? So how much of that was, I guess, really kind of forward looking about what the cloud and the gold? Well, it certainly were a combination. So I wouldn't say we had any fear about supporting on prem version that Guidewire has made a real commitment that I'm sure it would be supported for three years or more. We also have a long experience finding Guidewire software now. So we can do it pretty cost effectively. And we knew we could run it in the cloud. We had done our own proof of concept of what it would take us to post it in the cloud. So there wasn't a fear factor of not being supported and needing to move to cloud. But there are a whole lot of things that we have to do, that we don't really like to do, That what we've added to ourselves, we have to do. So I prefer to focus on the applications and the value offering we can have, like running infrastructure and doing upgrades and stuff. Is something we have to do, but is no direct value. And honestly, it's not so exciting. And in particular, long Cup three products means a period where I have to tell my internal customer that we can't have new enhancements for a while. We have to schedule some out of sight for costs in order to do those things like that. So if I don't have to do that and I can just pay a Guidewire or you know, another cloud vendor in a in a different part of our applications back, that's a huge benefit. We have predictable cost, regular upgrade cycles and not have to be planning for those for multiple use. So it's really a combination of those things. We also find with mature cloud implementations, there are other ancillary benefits of just faster environment provisioning, increasing scale and capacity, particularly where we needed on dynamic positioning. That's outstanding. Thank you so much. Really appreciate that perspective. And it's also good to hear because those are some of the fundamentals of course that we underpin what we want to offer, allowing you to shift your focus towards those things that will enable more business value. So it's great to hear the first thing, Rilla. Thank you so much for sharing. Raj, would you mind sharing a little bit about yes, I was just going to ask, can you tell us a little bit about maybe some of the components of your business case as well? Exactly. So I mean, what makes us transition, we actually experience the flexibility of having the cloud platform available. Obviously, it's a different platform because we try to deliver the transformation process target on an expensive timeline. So it really helps us on the agility side to get new platforms up and running and have multiple parts working in parallel so that we can deliver on those business values faster. And having the technology expertise closer to what business is trying to achieve gives us more of a demand. Whereas on the other side, if you have technical security just for performing a case and all, you know, it doesn't drive through that. That is now offloaded to the side working or the cloud management side, where there's other team focuses on developing the product front. That's terrific. And so, Suraj, building on one of the things that you said there, you were talking about kind of that pace, right, and how quickly value can be unlocked. Could you tell us a little bit about the timeline of your implementation? It definitely had pace, which is excellent. Yes. I mean, it is actually a record breaking implementation. We implemented all three modules within one year of the very first stage to the goal ID. There was work done prior to the Sprint one which was getting the groundwork, understanding what areas we want to implement, what process we want to print in. But once the implementation started, the day one of the product development cycle before in production within one year. That's terrific. And one of the other things that I'd love to touch on actually with both of you is really understanding if you found an impact from the pandemic. Raj, I know I had a conversation with you and some of the other folks on your leadership team at the Gourmet School pretty early on in the pandemic, really encouraging us to keep moving and keep moving fast. Could you maybe talk a little bit about that? Exactly. So when the pandemic came, there were two types of organizations. Some organizations were bit slow whereas Goldman's around the other side accelerated on the enhanced portfolio transformation projects. So it worked out in our favor because there was resourcing available. We were able to ramp up and the operating model also worked out because we were able to hire resources across Canada and other job as well. And the project was put on fast pace along with the support that was provided by our implementation partner and the live wire team, I think the nominal during this phase. That's great. And I'm sure you mentioned there, I'm sure this is a question that many will ask. You mentioned an implementation partner. Would you like to share the implementation partner that you're working with? Yeah. So Gold Mutual worked with Deloitte and then our implementation partners. Deloitte had the project have been divided into much releases, but first release and then, introduction in July. We have the second release scheduled in November and third for commercial lines in 2022. Thank you so much. Greg, your organization, your team just have a tremendous amount of Guidewire expertise internal within your team. Did that help at all, do you think, with the pandemic? How did the pandemic impact your program? Certainly, the pandemic had an impact, because we had already started and had teams formed at the start of it. So it was pretty natural move, just everybody working from home. We probably had 10% of the team already remote in some sort of way. So, one of the real upsides of the pandemic was frequently those people where there's one or two people that are remote into a meeting where everybody else in the in the conference room, they felt kinda like second class citizens. And they said it was a task to much better experience. But also as part of this program, we were building these true enterprise teams. So even people that were attached to an office, frequently, it wasn't the same office. So once again, by moving virtual, those kind of barriers went away. It wasn't in conference rooms connecting together. It was a bunch of things on Zoom. And then, in particular, as we started hiring new talents, either in areas of growth or just normal turnover, we've recruited nationally. And so now about a third of our IT workforce is not in a commuting distance to one of our offices. And we never would have added staff at that pace away from offices if it weren't for the pandemic. I would say the biggest downside is when you truly need to collaborate in the design of completely new solutions. There's just something about being together and writing on a whiteboard and then going to dinner afterwards and coming back the next day, keep working on the problem that you just can't do that same kind of thing virtually. So we missed that. And then I think, long term, we're still concerned about what's it mean for the culture. Does culture change? Do we instill our values and our culture in the same way virtually or does it really take, getting to know people in person? Thanks. Those are great points. I know especially what you mean about that, that feeling of camaraderie that you want to have in the program. I would obviously much rather be on stage with the two of you and in front of a live audience. Those are things that we can all relate to. There's another great question that came in from the audience and I'll ask this to both of you. Maybe Greg to you first and this is a question from Ken Wong. He asked, my interactions suggest that the P and T industry is a very tight knit group. Have you seen an uptick in peers reaching out to you to understand your experience? Are there any consistent themes you've noticed in those conversations or a line of questioning and perhaps any changes in terms of what their cloud hesitancy might be? That's a good question. So I would agree with you. It's an Internet industry that you probably think. And that's certainly one of the things I miss in this pandemic time is that I would go to industry events not honestly caring too much about the content of the conference, but it's more about interacting with peers. I think that's that's part of it is just my personality that I spent ten years as a consultant, and I just naturally wanna know what's going on in the industry and and other businesses. So you learn a whole lot in that process as well. So I would say I actually have fewer people ask me about how things are going in the pandemic world because they have to make more active, you know, key to help me try to connect as opposed to, hey, Greg. I haven't seen you in six months. How's your implementation going? So there there are fewer casual kind of interactions. We definitely get a lot of more formal requests, people wanting to understand, you know, why we made certain decisions, things like that. One of the things that you guys are probably all curious on that I normally would know, but I just don't know because I don't interact with so many people, is how many people are slowing projects down because of the pandemic or delaying purchase decisions. We haven't done that. But knowing the culture of many insurance companies, I would think they probably would have slowed down some decisions or is probably an exception that decided to double down and move fast. But a year and a half of the pandemic, man, you can't wait any longer. They got to be the one thing that's slowed it down, technically, reversing about now because this is truly the new normal. Yeah. And what you just said, so of course, Gore, you know, pedal to the metal, doubled down and was really looking to use it actually the competitive advantage to leapfrog in the industry. But even from the numbers that Mike had showed earlier in the presentation, we've still seen a phenomenal push towards cloud. Maybe a little kind of hesitancy as people started to work remotely and things, but we definitely see a significant push to be taking on these programs. So that's definitely been quite heartening and something that we're excited about. Raj, how about you? I know across the Canadian carriers, there tends to be maybe a little bit more sort of conversation now and then. Have you had a lot of questions come your way? Yeah. Yeah. Exactly, Christina. Because, you know, we got formal request of how our experience has been and many reasons for that. One is, if part of our business is strongly regulated, so which means that all the carriers are impacted by that regulatory environment. Second, the customer behavior change is happening on the user experience side and how it has been accelerated due to pandemic and all. That is in everyone's mind. And essentially, what that does is driving more traffic to the online website, competitive website. The scalability and other aspects of the platform suddenly become more critical. And the ability of a carrier to enhance its product model, underwriting rules and all. You know? So we all face common challenges. And essentially, as a success story goes out on implementation along with, how the platform then all being stable, generally makes people curious because, as you know, that commission targets are not easy. I mean, there are tactical decisions, strategy decisions that have short term and long term impact on the operational environment. So that is there and we are being approached for what we have done over the past year. Okay. And obviously, we see a tremendous amount of momentum across the Canadian carriers, which is great. I get the sense that maybe there is almost a bit of sort of fear of missing out, which is great to see that there is so much innovation truly being driven across the Canadian market. And Greg, I promise it sounds like, you know, maybe you'd be getting more casual phone calls if I publish your cell phone that I don't have to do that. All right. Well, so one thing I do want to touch upon, so of course, as we've talked about a number of times, these programs are really they're quite complex. And so we've talked about some of the great things that you both achieved through the program, but I know it hasn't been without the complexity and challenge. So maybe Greg, if you want my doll, I'll start with you. What are some of the challenges or maybe lessons learned that you've taken from the work that your team has done thus far in Guidewire Cloud? Well, a few different lessons learned. I'll start with the one that we kind of brought on ourselves is that when building this platform of the future, it's not just Guidewire, but it's other components, some coming through Guidewire partnerships, other things we've implemented that are being Guidewire doesn't comply. A couple of things that we've chosen to kind of go our own way and not use Guidewire capabilities. So it's a massive integration out of just getting all of that standard into the new insurance platform. And then on top of that, we serve very distinct channels. That's really at the heart of our acquisition strategy was to buy our way into new markets and expertise there as opposed to just adding capacity. So, we the traditional American Family brand sells to exclusive agents. We did an acquisition that does the vast majority of their business direct. We've done two acquisitions that sell almost exclusively through large partnership relationships. And then we've done one that was technically a merger that we get into the independent agent market. So we are doing things in order to support that multi distribution channel where the experience of the agents of the service reps and, of course, the end customers all have to be different by channels. So that created some complexities. The other challenge that we knew getting into as a early Guidewire customer is, of course, there were some maturity aspects in being one of the first Guidewire cloud customers. The first is that we started our implementation actually on Guidewire Classic. So it's Guidewire hosting protection team on the cloud platform. And then when the cloud platform was released, we had to make the decision whether or not we moved to the cloud platform or stay on the classic hosting. And we chose to move to the cloud platform because we wanted to get on the latest and we didn't continue doing that move later. So that caused a little disruption during the time we made the move and there's still a couple of gaps that we're looking to close that we got used to in our old platform and Guidewire is still building our capabilities. So those have been kind of the two manager challenges other than just bringing five different organizations together to agree on it. There's a lot of business challenges as well. That sounds like a big family meeting of some sort, I guess. And in terms of what you mentioned also around some of the achievability in GWCP, your organization is so mature in certain areas around development life cycle and things. You've been very patient in terms of what we continue to bring in the roadmap. So we appreciate your partnership and guidance in a lot of that as well. It's very much appreciated. How about you, Raj, from your standpoint? So, I mean, we certainly overall journey has been very exciting, but tons of challenges also during during the journey. And flexibility and, obviously, the ability to break the problem into smaller modular problem at PNC. The approach that we are taking from day one is to decouple the challenges independent and build something greater, toggle features, and others so that the the rollout of the platform, is is gradual. And you would usually have on the glide Guidewire cloud platform. The architecture itself is there in a modular way, but we had we are on the Guidewire cloud platform. So provides a service of review, code reviews and all. So using that service, we make sure that the component that we had designed would be, flexible when we go for by wire cloud native. But, essentially, the key has been flexibility on the business side to find alternatives so that the problem sizes a bit smaller and then flexibility on the implementation partner side to bring on each integration gradually in the production environment. That's terrific. And actually what you were just describing in terms of like some of the code reviews and support that we offer there, that actually coincides really well to another passion that was asked by the audience. And this one comes from Chris Kelly. And so, Raj, I'll ask you first. Yes. How did you weigh the benefits of cloud versus loss of some customization from your on prem software? So did you find that any kind of systems memorization on cloud with a constraint or a meaningful pushback from the business folks? Yeah. So it's a tough balance, right, because we want to do customization, but the question is that are we doing customization just for the sake of the customization or what is the true business value that is gained? The driver being the standardized platform used across the industry partners. There are multiple ways to do the same business task. And if we do customization a lot, then we lose the ability to seamlessly take the future releases, you know, that type of come out of it. So essentially, the question is that are we doing something that would be encoded in future or are we able to adjust the business practices and bring it more closer to the industry standard practices, which is already available at the driver platforms most of the time out of the month. That's great. How about Greg from your standpoint, I imagine as you were mentioning across your operating unit, a few of them had experience with Guidewire. Do you think that they found that they've been constrained in terms of some of the standardization that's part of the cloud solution? Yes. I don't think we've encountered that. So I understand the nature of the question because, like, when we moved our HR and financials to Workday through the years, yeah, we definitely were moving to more consistent standardized models and not have customizations. And that was an advantage moving to cloud solutions. With Guidewire, you know, being on our own instance of managed by cloud and being on a highly flexible architecture, there is not any customization that we wanted to do that we couldn't do. The biggest change is, and it's a good one, is Guidewire gives much more specificity about how to do the change technically. So some of the customizations we did eight or ten years ago, like, in retrospect, we never would have done it. It was, you know, partly from lack of guidance, partly our lack of maturity in the solution. But there really isn't anything we've been told you just can't do. It's more, okay, if you're going to do that, this is how you should do it in order to be up to date in the future. Terrific. That's fantastic to hear. So the next thing that I'd love to touch upon and probably actually wrapping us up unless we get some more questions from the audience. I'd love to hear sort of what each of you are expecting in terms of what's next for you in your Galois cloud journey. I know there's more releases, but maybe additional business benefits or things that you expect. So Raj, let me start with you. Yeah. I mean, one thing that I really love about the GuideLab platform is the accelerator ecosystem available to us. So that accelerator ecosystem, once it speeds up the innovation and delivery of business value to our partners, And second, it opens up to the fin to ensure that research being done all across. One example that that we use is we're implementing the press machine learning, fraud detection algorithm. And it interfaces within the Guidewire UI. It uses the Guidewire data along with the other data that the organization has. And through that accelerator, the journey has been pretty pretty fast. If there was any solution which doesn't have such type of ecosystem, then the adoption to newer technology would be slow. So once the core release is in production, we're really excited about all the very tail benefits that we have now at Slicum that we want to bring over to our ecosystem. That's great to hear. We love you using our Insurtech partner. That's fantastic. Greg, how about you? What's next for, for GovWare Cloud? So for us, we got a long journey ahead of us. So we have our first release with our first operating company in a couple of weeks. And then it's really getting every operating company on the platform to new business across these different channels, getting to all states, migrating our legacy platform to Guidewire and repairing all of those. And then insurance cycles, like even if all the code was done, we'd still be talking a couple of years just to get through renewals and all that. So there's a lot there. We haven't really talked about claims at all. That's probably a little bit more interesting journey because you can move claims so much faster. With claims, our journey was a little bit different because three of the operating company already used, claim center. Another one had already selected it, but hadn't started implementing it. And another one was really a dying platform, which we needed that off quickly. So we actually moved all of our companies to pain center, and that process is complete. We have one of the legacy systems that still needs to be repaired, but that's the process. And then we're going to move all of that cloud likely next year. We have to save that in given the volume and stuff like that. But for claims, it's going to be a much faster path to be fully on the cloud. Okay. And of course, we look forward to figuring out how to bring in some of the roadmap releases, right, to take advantage of those timelines you're talking about too. There is one more question that came in and Greg I'm going to direct this one to you because I think you'll be the one with the best perspective of it. Having been able to compare self managed insurance fleet now with cloud. And so the question that comes in from Austin Boas is, in your opinion, what are the biggest hurdles for insurers using on premise insurance suite to adopt insurance suite cloud? Is there any guidance that you would offer there? Yes. I think it certainly varies a lot to my career, but what I hear from a lot of my peers is that they had to go to their senior executive team or go to the board and get the justification for the initial implementation. And now, moving to cloud is going to be another big investment, and they have to go back to the well for that backing of funding. And if it's a mature, stable implementation, I understand that as opposed to if you're adding new products or market expansion or something and you're doing the work as part of that. So that's our hurdle. The ones that have done significant customization or have not upgraded in a while, I hear them saying, well, there's just a lot of work we need to do to get rid of non compliant customizations or we need to upgrade on a newer version even before we do that. Some of what Guidewire has announced recently has eased some of that. I believe there's an option to move from Version eight directly to cloud now, for example. So I haven't talked to a lot of these people in person in more than a year. So I'm sure they're relieved to give that. Some of the kind of tooling will help. But it's really upgrade cycle, investment and amount of customizations that would be the barriers. Absolutely. And as you mentioned, so CloudDirect is something that we offer now, which allows customers to move from version eight or version nine directly into the GWCP and we've found definitely a lot of momentum from that, which is terrific. Well, thank you both so much for joining today. I apologize that we're not in together in person so that we could thank you at dinner afterwards, but really grateful to at least be able to see you two virtually. Hope to see you in person sometime soon. And thank you so much also to the audience for all the fantastic questions. Very much appreciated. We're actually going to now take a fifteen minute hike. So thank you all for tuning in and we will be back in about fifteen minutes with the next session. Thanks so much everyone. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. Hello, and welcome. My name is Diego de Valle. And at Guidewire, I'm responsible for product, engineering and cloud operations. It's an honor for me to be here today and give you an update on the last year. We've made tremendous progress, transforming the Guidewire platform into a cloud service, providing a new foundation for innovation by both customer and ourselves. Our vision from the beginning was to build a cloud platform optimized for P and C insurance on top of AWS, leverage the InsuranceSuite core to serve as a transactional system of record, componentize and expand that core with cloud native application and digital service, all included a robust data platform to deliver rich data and analytics capability whenever we need it. I recall three years ago, the first meeting I had with all of you here in this building in the cafeteria. Back then, we laid out this plan, the finding which the first release was upcoming six months later called ASCEND. And since then, we have been releasing every six months, basically executing the plan that we laid down back then and has been tremendously successful. With the launch of Dobson, we made great progress orchestrating all the different components of the platform. We now have more developer tooling and API that could be leveraged in the new integration framework to quickly create new integration. And those integrations build in this new way will be upgrade free going forward. The stream API can be used as a starting point for our Jutro web application framework to create an array of new digital experience faster than ever before. InsuranceSuite, InsuranceNow as well as data platform now run on top of GWCP infrastructure. Going forward, all the progress we made around automation, configuration and observability are enabling us to spend even more time on customer innovation. Couple of years ago, I mentioned that for the engineering team, our transformation was a big opportunity, not only to increase the release frequency, but also to accelerate innovation that we could deliver to our customer. Two years later, I can confidently say it is happening. We continue to strength, expand and scale GWTP with every release. So now it is available in regions all over the world. But our scaling is not only limited to region. BWCP continued to mature. Customer confidence and adoption of BWCP continued to grow. And as the number here clearly show, you can see that we went from one region to seven region around the world. But more interesting, in the span of fifteen to twenty months, we went from two customers to 46. This has been tremendously satisfying and rewarding for the entire engineering team. What is also very exciting is that we have reduced the cycle between the engineering team and the customer adoption. This makes the entire workload more exciting for the entire team. When you can build a feature, release it and see immediate adoption, that creates a feedback loop that it was not exactly possible in the previous world of self managed release. But while Jaguar InsuranceSuite has been designed from the ground up to support the largest insurance in the world, when we started GWTP, we had the same goal. We must support the concurrent workload of the largest insurance in the world on top of the platform. Company like State Farm and USAA, policies in the tens of millions, transaction in the hundreds of millions and user in the tens of thousands. Our approach to preserve our DNA, while at the same time take full advantage of the cloud transformation opportunity is what we call hybrid cloud. BWCP hybrid cloud or hybrid tenancy model introduced last year could be summarizing core statements per bullet. First, one single tenant IS Score per customer. Gradually, that IS Score is going to increase the level of complementization. Number three, we are augmenting by multi tenant cloud service shared across multiple customers. In engineering, we call this setup left brain and right brain. And so on top of those brain, we share a common cloud infrastructure, service and developer tooling. Our tenancy strategy is designed to maximize value to our customer. Single tenancy for our core give us data isolation, security and differentiation at the domain level, but also allow our customer to preserve and leverage their multiyear investment in InsuranceSuite, while at the same time have an opportunity to adopt innovation at their preferred pace. Like contrast, with us, hybrid tenancy model enable high degree of cost efficiency as well, thanks to containerized workloads and orchestrated by Kubernetes. This approach enabled us to balance speed of adoption, performance, operability and cost. And if you look at the adoption today, our approach has been going on. But GWCP is more than that. Guidewire always had the vision and ambition to transform insurance suites by accessing and leveraging data. The cloud transformation has been critical to transforming this vision into reality. We first delivered CDP in VANF release nearly a year ago. From that moment on, we had the capability to stream all the data, all the transaction from our core into what we call a data lake. And later on, with Data Studio releasing Container, we enabled an epic app easier than ever, allow quick access to pre curated data sets, but most important, allow business and IT user to manipulate, create their own data set. This is going to be critical for our customer, but it's going to be critical also for ourselves. Because it's going to enable a separate solution that we could build going in the future. If you think about CDP as an infrastructure that has a potential to be a game changer, a good analogy could be the introduction of Wi Fi. When Wi Fi was introduced at the beginning, it was simply infrastructure. I don't think that most of the people back then had the vision to understand that ten years later, pretty much everything inside the home is connected to a Wi Fi network. This is the change. I think that CDP and the availability of every transaction data into a data lake is going to be used by an array of new upcoming applications. And to deep dive a little bit more into this, I want to pass the ball to Roger that is going to come here and give you a deep dive on analytics solution that we're working on. Roger, back to you. Thank you, Diego. The Guidewire data platform is crucial to deliver Smart Loop analytics to the P and C industry. We've been busy progressing the SmartLoop since we spoke last year, and we focused on solving business problems. First, we leverage more data. We collect and create the maximum amount of data that we can. We also reduce the challenge to use that data. Second, we embed intelligence with our underwriting and claims decisions at the edge, not in the back office. And third, we learn continuously and complete the loop with monitoring and learning. We help you answer the question, how do I maximize value for my analytic investments? Let's dive deeper. We're helping our customers to solve problems with our analytics in the market right now. On the goal is leveraging science for small business data in our pricing and selection model. S and P Global Ratings is expanding its Guidewire Science partnership to its new cyber credit lending solution that will better inform investors to the creditworthiness of businesses. GM Reinsurance is collaborating with Guidewire Science to help cyber insurers manage their risk capital management and reinsurance placement. Seasley is using Guidewire Science to identify risks that they should keep and risks they should non renew to increase profitability. Sompo is leveraging Guidewire Creative Analytics in their underwriting automation initiative to provide a scoring model to triage incoming risks and increase their quote to buying ratio. Leverage more data to drive granular risk insights. Unlock your insurance suite data through the Guidewire data platform and data studio that helps you access and stream your own data. Incorporate curated external data with science data listening engine will gather predictive data, including behavioral data, and we turn that into solutions by line of business, including cyber, workers' comp, GL, EPL and work's timing lines of business as we go. Reference anonymized peer data measure your market performance against your peers and our compare products, which we'll talk about a little more. We're excited about our acquisition of HazardHub, which complement our science for small business casualty offline by putting property or the P in P and C data. And we welcome 110 new customers to Bagwire. HazardHub helps customers make informed individual decisions, first starting with scores on relevant perils, including tornado, hail, flood, earthquake, fire and wildfire. So not only do we provide scores, we also provide more than 1,000 variables that contribute up into those scores, including distance to fire hydrant, distance to historic fires, faults, floods, frozen pipe. And you can use this information to microsegment, to write more properly and to manage the risk in your portfolio. What we're looking at is an example of the Caldor fire that continues to burn in parts like Tahoe and California. The yellow dot is a risk compression. The red dots are fire stations. And that red line is the perimeter of the fire. So as an underwriter looks at an individual risk, they can understand the context of what's around it, and you can see the individual variables that we collect in this case. You can see that for wildfire, this location receives an F score, which is the worst score. We can also assess portfolios to answer questions like, what percent of my portfolio is more than 1,000 feet from a fire hydrant? Or what percent of my portfolio is inside or near the footprint of a historic wildfire? We can get valuable risk insights and settings through the API. Embedded intelligence to sharpen decisions at the edge. This is an example of claims severity or liability property damage. I like to think of this as a Toyota Camry hitting and company given that we have a 200,000 Toyota limit. And as we embed these analytics, it warns us that this individual claim is within the top 10% of claim severity in our portfolio and includes the predictive factors that are underlying that recommendation. Our predictive analytics product is what drove these recommendations, and it allows you to leverage a catalog of prebuilt models and datasets or build your own models and bring those models with you through open source integrations. You can embed insights into PolicyCenter and the ClaimCenter workflows to really bring analytics to the edge. And you can deploy models in days, not months. Our customer, Mika, uses predictive analytics product to assess clean severity and assign a job case. Learn continuously to improve outcomes. With our Explore products, you can measure performance against your own internal targets. With our Compare products, you can measure performance against your peers and compile information daily and allow granular filtering. In this example, we're looking at the claims closure rate. We have a cohort of claims, and we're looking to see how many claims are still open after a six month period. For our own portfolio, we've closed 72% of those, but our peers have closed 94%. This means there may be increased expense and potential for claims growth. To improve, we can conduct AB testing to figure out the best approaches to improve our close rate. We can also monitor our predictive models to detect early drift to understand whether we've selected the right variables and also to consider micro segmentation. Cyber attacks are increasing in both frequency and severity. Dollars 20,000,000,000 in global costs have come from ransomware in 2020. There's been a 600% increase in cybercrime since COVID began, and sixty six percent of small businesses had a cyberattack in 2019. The average payouts are increasing, with more than $1,000,000 is the average payout for large businesses. Our response to the cyber threat is our science product, which is also an example of a smart loop in action. We start with data listening to capture and curate the information that most remain to cyber. We then calculate exposure signals to actually answer individual business questions. And then we model that risk at an individual level to generate a technical point. We can then model the entire portfolio of risk and do massive event modeling, so you can understand your aggregate exposure across your entire portfolio. We're excited about the value that we are delivering to customers through all of our solutions and through the smart loop. And even more capability is going to be announced in our November Connections event. Diego, back to you. Thanks, Roger. Indeed, we have a very strong roadmap ahead. First and foremost, continuing to scale GWTP. On top of that, we want to provide cloud dashboard to increase visibility to operational and business DTI. Standing Jutro into a complete web application framework to enable digital agility. We're producing a free package insurance LOB under the Guidewire Go brand. All that while continuing delivering out of the box business solution, including user based insurance UBI or small commercial insurance. Last but not least, we will continue to expand our multi tenant cloud native service. So let me double click a little bit on that. We talked a little bit about cloud native service during this presentation. Here you see some of the cloud services that are key parts of our hybrid tenancy architecture. Some are what we call common cloud service, like authentication or access control. Other are more business oriented like rule engine, rating or claim automation service. And today, I want to focus in a new submission OCR service that we will be launching with Dobson. This service enable automated capture and recognition of Accords application form for different types of insurance. In Dobson, we now integrated this into PolicyCenter to automate and streamline the submission process. This service highlights how we can leverage the power of the cloud, while at the same time streamlining the user experience. To see how it works, I will run a quick demo. I promise to do a quick demo. Dragging and dropping in a code form into a policy center, That will expire on the back end, it's going to fire OCR service to recognize the phone information and it's going to trigger automated mapping of information into policy center. So with that, Fred, let me actually kick off the demo. Everything starts by drag and dropping an Accord form to upload the submission of our service. After a few seconds and when ready, the user will be presented with a document review screen. As you can see here, there is on one side the form and on the other side, you can see that there are some error. On this demo, we have modified those error, make quick change and completed the review. Upon completing the review, all the data are set automatically mapped and basically ready for submission. And in the next screen, we are back to the policy center where all the info are automatically translated and made available in our system. This was a quick example. Now Guidewire Cloud accelerates customer efficiency, allow customer to go faster with automation and capacity on demand. Our overall goal has been from the get go, build and launch new LOB products faster, expand scale and market reach, change with ease. We really want to have our customer capable to make changes and in a continuous loop, launch a product, expand our sales, make some changes, push a new version of the product. And all that while from our side, we're going to continuously and rapidly add more capability to the platform. So this has been the goal and this has been what has been happening in the last couple of years for our early adopter. But while on from one side, this accelerate customer efficiency, how about Guidewire efficiency? Last year, we introduced this slide to talk a little bit about our efficiency. We talked a little bit of how the introduction of GWCP will increase our efficiency and will increase our, the number of customer that we can support by the same amount of people. And so now we are like close to our fourth release. And I can tell you that everything that we've been building has been predominantly focused on efficiency. And everything is panning out. I want to close the presentation with a give you a transparency vision on the number of customers that we're now running on GWCT and the acceleration of that. This acceleration will have not been possible without all the efficiency that we introduced in the system and across the last two years. As you can see, a year ago, we had 10 customers in development and one live. For those 10 customers, we were managing and supporting 99 non production environment. Fast forward a year later, this picture has been taken at July 31, at the end of our fiscal year. We are now fully fixed customer on JWCP and we're managing two zero three non production environment and six of them are live. All that has been possible pretty much at the same team. My team has been pretty much the same size. And all that has been possible because of all the dedication that we gained with GWTP. And with that, thank you. And I'm going to wait for questions in the Q and A. Thank you. Good afternoon. My name is Jeff Cooper and I'm the CFO at Guidewire. I joined Guidewire almost four years ago and I'm thrilled and honored to lead the finance organization. It is certainly an exciting time here at Guidewire. As you have heard today, we have a huge opportunity in front of us and we've done a ton of hard work to position ourselves well to capitalize on that opportunity as we execute and deliver on our cloud problem. And it's important to reflect on the fact that we are already a cloud first organization. We have discussed today how we orient our product development efforts and really all facets of Guidewire on being cloud first. When you look at our new sales, you can see that over 80% of our new sales in fiscal 'twenty one came from our cloud products. In Q4, which is always our largest quarter, almost 90% of new sales came from cloud. And we certainly expect this to continue. This shift to the cloud is a significant change in how we engage with customers, and this change offers benefits to the industry, to our customers and to our investors. Most importantly, the cloud enables us to best service this industry. Emotional is that we are changing the relationship we have with our customers by expanding beyond just being a software vendor and building a new division of labor with our customers. We can take on more and allow our customers to focus on what truly differentiates them. As a software vendor, we captured a relatively small piece of the overall pie with respect to the spend that insurers make on core systems. As a cloud vendor, delivering a core system as a service, we can meaningfully expand on this relationship and as a result expand our overall TAM. As we expand the relationship with our customers, we benefit from occupying very strategic real estate within an insurer's IT framework. Our service is absolutely central to our customers' business operations. It's a responsibility we take very seriously and we are investing to ensure all our customers achieve successful outcomes. We sell our service in a recurring subscription model and expect to have long term customer relationships with an attractive customer lifetime value. And finally, as we move to the cloud, we believe scale matters more. It is a very consequential decision to entrust a vendor to not only provide mission critical software, but to then run that software on their behalf and deliver it as a service. Market leadership and a track record of tackling the largest and most difficult projects will accrue to our benefit as the TMC industry adopts cloud based core systems. Additionally, within a vertical market, there is an opportunity to build meaningful market share and create compelling avenues for future modernization. Over the last twenty years, we have earned our reputation as the market leader and we are investing today to solidify that reputation and capitalize on this exciting and large market opportunity in front of us. We are excited to see our business gain momentum as the model starts to play out largely consistent with accelerating and we expect this growth to be very durable. Additionally, we will start to see subscription margins expand this year as we start to march towards the long term targets outlined at last year's Analyst Day. I wanted to take a quick step back to discuss why we are focused on ARR as opposed to our reported revenue. Over the last couple of years, we have focused 100% of internal Guidewire on executing through our ARR targets. We also think about expense ratios as compared with ARR. This is critical to drive the right business outcomes for Guidewire. The adoption of ASC six zero six, which materially changed the revenue patterns for term license revenue, combined with the increased cloud sales and the resulting ratable revenue recognition means we have a variety of revenue recognition patterns. While the revenue patterns may vary wildly, the cash collection cycle is very consistent. Generally, our customers adjust annually upfront. Let me walk through the different revenue patterns quickly. For subscription and support revenue, which includes cloud revenue and support revenue attached to self managed customers, we recognize revenue ratably over the committed term. For cloud, we start the call from revenue recognition on provisioning of the software, which for InsuranceSuite cloud has historically been around thirty days, although we are getting more efficient here. For license revenue, once we have delivered the software, ASC six zero six requires us to recognize revenue upfront for the committed term as opposed to recognizing revenue in line with annual invoicing as we did under ASC six zero five. Given the duration of many term license arrangements, this has resulted in lumpier term license revenue. Our standard term license contracts are two year initial terms followed by annual renewals. However, in some instances, we will see deal durations that are longer than our standard terms and it is possible to see shorter deal durations as well. I will also note the big opportunity in front of us continues to be the opportunity to migrate existing term license customers to our cloud products. This creates additional income statement complexity because in the migration, the customer continues to use their on premise software for a transition period. As a result, when we sell the cloud deal, some of the software revenue will be recognized to license and some will be allocated to subscription, which can be a bit counterintuitive. Internally, we focus on ARR as a measure that normalizes for all of these different revenue patterns and all the associated complexity. Our definition of ARR largely aligns to annual invoicing activity for our software. The chart on the right hand side of the page shows ARR growth compared with total software revenue growth. Prior to ASC six zero six and the shift in the cloud, our software revenue in a given year was a very good approximation for ARR and those growth rates were generally aligned. As we have worked through this transition, however, we do expect to see deltas between these measures. In fiscal 'nineteen and 'twenty, reported software revenue growth was higher than ARR as we saw more multiyear term license revenue and benefited reported revenues due to ASC six zero six. In fiscal 'twenty one and fiscal 'twenty two, that multiyear activity that was sold previously creates a headwind to reported revenue. But ARR normalizes for all of this, which is why we continue to emphasize it as the right metric to think about Guidewire, especially when you think about organic growth rates. And when we look at ARR, our growth is now being driven by our success in the cloud. We are still in the very early stages of this industry shift to cloud based core systems. But this significant shift is starting to accelerate and will power our ARR growth as we move forward. This next slide drills down into our recent ARR results. Our ability to win and grow in the cloud is critical as we work to continue to penetrate our TAM. While we are in the early stages of the cloud core system demand curve, we are seeing strong momentum with our cloud products. This is a view of our ARR by total cloud ARR and InsuranceSuite cloud ARR. The chart on the left shows the ARR of all of our cloud products, including Cyence, InsuranceNow, cloud delivered data products and InsuranceSuite. And the chart on the right isolates ARR coming from InsuranceSuite cloud customers only. We are thrilled with this momentum as this represents an important view into how we think about future growth. Another metric we have discussed during this transition is our fully ramped ARR. Given the strategic and long term nature of our customer relationships, it's common for large cloud projects to have a multiyear ARR ramp embedded into the customer agreement. As a result, our reported ARR from a new cloud customer is often significantly larger in year five than in year one. As of the end of our fiscal year, we had over $690,000,000 in fully ramped ARR. The chart on the lower right hand side of the page is a visualization of all of our Insurance Suite cloud wins aggregated into a single cohort to give you a view into the average ramp schedule and what that ramp looks like. As we add new cloud customers and layer on new cohorts, we expect this to create a tailwind to future ARR growth and this will help with overall visibility into ARR. I wanted to repeat this next slide that Diego previously presented because it is very important. We have been investing on the product to drive longer term cloud operations efficiencies. The Seaspoke releases on top of Guidewire Cloud Platform are creating a more efficient cloud native offering. We believe our platform is uniquely positioned to meet the needs of the industry and we have started to work to bring customers to Guidewire Cloud Platform as Diego highlighted. Last year, we noted that as we exit fiscal 'twenty one, we expect to require less headcount ads going forward and that will allow for some gross margin expansion in fiscal 'twenty two and beyond. We are in fact seeing this play out and the investments in the product to support this profitable growth has been and will continue to be a key part of our approach and we are seeing that in our subscription gross margin starting in fiscal 'twenty two. Now, I would like to turn to our long term model framework. This slide shows some key metrics as of the end of fiscal 'twenty one and fiscal 'twenty two, are the midpoint of the outlook provided on our Q4 earnings call. We then show what the business could look like at $1,000,000,000 of ARR and $1,500,000,000 of ARR. At $1,000,000,000 we expect over 75% of our ARR to come from our cloud products. Given our results in fiscal twenty twenty one, we do feel confident providing a bit more precision on when we expect to cross $1,000,000,000 in ARR. We expect to achieve that milestone in fiscal twenty twenty five. This is a bit earlier than our model assumed last year. Our execution gives us increased confidence in our long term targets as we start to see the market evolve in line with our expectations and as stock investments translate into operating efficiencies from Guidewire. As a result, we have not made any changes to our long term margin targets. The near term targets have been updated a bit with minor changes to our gross margin. We have adjusted the midpoint of the range down by one percentage point. And this is a result of us getting to $1,000,000,000 in ARR a bit earlier than our prior expectations. In fiscal 'twenty five and 'twenty six, we expect to see meaningful scaling benefits and the margin target in fiscal 'twenty five is just a step along the way. And we would expect to see meaningful expansion in fiscal 'twenty six as this model continues to play out. Overall, we are pleased that our model continues to evolve consistent with the expectations that we laid out last year. My next two slides will expand a bit on the margin expansion opportunity in front of us. First, let me touch on our progression towards our near term subscription gross margin targets, which meaningfully drive our overall subscription and support gross margins. This slide looks at progression on a gross margin basis and on a gross profit basis. Obviously, a key part of the story is our durable subscription revenue growth that we expect to maintain. Then as we look at the cost, you can see here that today, the majority of our costs to support our cloud business are headcount driven. This is a function of our investments in cloud operations to support our early cloud customers. We feel confident in our product investments to allow for a much more scalable post production runtime efficiency that will allow us to taper these investments significantly. As you look to the out years, non headcount costs will continue to grow as we add cloud customers, but we do not expect to grow headcount costs nearly as fast. As a result, by fiscal 'twenty five, headcount costs and non headcount costs will be closer to fiftyfifty versus where they are today, which is predominantly dominated by headcount costs. Interesting, it's interesting if you look back fiscal twenty nineteen, our margins were higher due to the fact that most of our cloud revenue at that point was from InsuranceNow and Science. And we were just starting our investment cycle to prepare for the InsuranceSuite cloud opportunity. This next slide looks at our investments and operating expenses to support our business and to continue our market leadership. By operating expenses, we mean our investments in sales and marketing, research and development and G and A. Internally, we look at how we are investing here and compare that growth in spend to our overall ARR growth. We have continued through this recent investment period to grow ARR faster than operating expenses, but that spread has narrowed. As we look ahead, we do expect to bring our investments in operating expenses back to more normalized levels and feel that market tailwinds once we see this industry start to adopt cloud based core systems scale will allow for sustainable long term ARR growth. These dynamics will drive margin expansion and is how we have thought through our midterm targets. So I hope this is helpful commentary to provide some insights into how we at Guidewire see the model playing out. And finally, I wanted to finish on this slide, which I already discussed at the start of my presentation. But we feel very good about the momentum we are seeing at the moment. It is the result of years of hard work to put us in this position. We are eager to keep this momentum going as we execute towards our model targets. Finally, there is GAAP to non GAAP reconciliations in the appendix and these slides should be available on our website by the end of the day today. So with that, I thank you all so much for participating in our Analyst Day And we'll hear quickly move to Q and A. Thanks so much. All right, great. Thanks, Jeff and team. We'll now move to the Q and A portion of the day. And if you want to ask a question, just put it in the Q and A button at the bottom. And if you'd like to ask that question live, just type the little live foot, I'll bring you up into the panel and now you can ask the team your questions. And now, while we're gathering, we're playing unmuting into the conference room. I'm assuming the audio sounds okay coming from the conference room. Okay, good. This question is not live, but I'll read it. It's for Tyler, right at Kincaid Group. Historically, application companies have struggled to see meaningful adoption of native analytics solutions such as Workday or Salesforce. How would you give you the confidence perhaps to fit in for Guidewire versus other application peers? I'll take a shot and then I'll hand it over to Roger to get his perspective. I think the insurance situation is pretty unique. And I was trying to explain this a bit in the diagram that I put up there about how connected core business systems and processes are to the analytics challenge. So, the way I think about it is that data needs to be sort of structured in such a way as it can be analyzed and then the model, the prediction needs to be pushed back into that system in order for it to provide benefit to underwriters, claims, adjusters, routing, you heard lots of use cases. Now that, for us to be able to deliver a complete system, a complete sort of smart that enables that process to be sort of easily implemented by an insurance company, I think will cause the adoption of that approach to increase. And I think I want to be kind of clear here. I don't think of it as wide wire replacing 100% of the analytics that exist as an insurance company. That is not the idea. The idea is that we will augment every business process that's running on our core platform with analytics and with external data to improve those processes with those matching techniques. And so from that perspective, my perspective is we will see more and more adoption of these solutions in our customer base. So that's my take and I'd love to give Roger a chance to take his perspective. Yes. Thanks, Mike. I absolutely agree. And it's a statistic that Mike shared earlier that approximately 60% of our FY 'twenty one deals include at least one pay down list for it is a testament to that. And it's a really exciting time for us, not only are we keeping relationships with existing customers, we're actually selling more analytics to existing customers. And ultimately, I think analytics multiply the value of a customer's investment in pad of our software. Okay, great. And then we just had a follow-up from Tyler. It says, how have your assumptions changed now versus a year ago in terms of the contribution of Tier one insurers versus Tier two and four and then maybe in the long term, where are our targets? Hey, it's a good question in terms of change. I'm trying to think about, I would, at a high level, I would say they haven't. I think we obviously look at the actual deals that we've closed and how those segments cross the tiers. But I've been very happy with the uptake on cloud and both migration and net new sales across segment. And that bears out in terms of the actual deals that we closed and announced, but it also that confidence, I would say, across peers is also based on the pipeline that we see and the quality of the engagement that we are seeing with customers who are doing these evaluations. And so certainly, there's going to be a distribution of the tiers as it rolls into the actual cloud ARR and total ARR of the company. But in terms of our sort of confidence in the long term outcome of this and moving all of our customers to cloud eventually, that hasn't really changed. I agree. I mean, as we thought about how we model this business, I think one of the key takeaways from this year is it played out largely in line with our expectations, which was very good to see. We always are looking at some of these tier worms and when they might eventually go cloud. We weren't necessarily expecting any of those events this year. As we think about the typical 25 chart, we certainly would expect a small number of those to move in a more meaningful way. Okay, great. I know Ken Wong wants to ask questions. So, Rory, can you bring him up? So, promoting Ken to panelists currently. Ken, if you can just press and unmute your turn and let him join us. Hey, can you guys hear me okay? Sure, Ken. Okay, great. So the first question, I guess you could go ahead Diego or Jeff, but you guys touched on how you are driving more efficiencies with PWGP. I think Diego, you highlighted how there was 10 going to 46 I think customer fund GWTP. Can you rough sense how the headcount relative to those ten and forty six looked a year ago and today? And I think, Jeff, you already somewhat commented on headcount going forward. But to the extent you guys can maybe quantify that a little bit, that would be fantastic. Sure. You want to take a first half? Sure. I'll start and then Julie, if you will have to play that. I think one of the key takeaways is we used to going back twelve months, eighteen months ago, we used to think about the business in a way of, hey, we have a cloud customer that we're going to add, how many headcount do we need to support that customer? We no longer think about it that way, right? So we now have a cloud operations team that is delivered, that has pods, so pods have capacity to handle certain amounts of customers. And so it's no longer an input in how I model thinking about, okay, how many headcounts do I need to add, this number of cloud customers. Our perspective is that we've invested a lot and we've talked a bit about how we've probably invested a little bit more than we needed to earlier than we needed to just to make sure that we have the team in place to handle these early cohorts. We don't really think about it that way anymore. I think that the investment we've made, we expect that we can leverage quite significantly as we look at adding customers over the next twelve to eighteen months. Jacob, appreciate that. Yes, I'll add a couple of things. There is always an asset that is the asset, 20 fourseven coverage. And so that was part of the initial investment. You need to have people around the world to cover for customer and for issue. And that core. At the beginning, we invested in a way that gave us that coverage. And of course, that coverage with little number of customer was less disproportionate. By the time you get more customers, you start to get some efficiency. But from a technical perspective, at the platform level, what is super, super interesting for us is that we move from a world into which infrastructure of every customer was kind of dedicated to a world into which at the platform level, the infrastructure is common across all the customers. So that is the biggest change that we've been able to sort of evolve during this year. If you think about the sort of situation to which you upgrade, let's say, the Google Gmail infrastructure and all the users that are in one specific cluster get the latest version of the platform at the same time, moving from a world into which there was like a dedicated instance of that Gmail example for customer A and customer C. So to be specific on your question, at the engineering level, besides the team from the platform, couple of years ago, we set our plan and we didn't move much. I mean, so we didn't see much difference to what the original plan. Got it. And how automated is that move to the new integration from Athens, to Cortina to Josten as customers are in or as you guys release, do you guys they get you guys all get the benefits of efficiency? Yes. So it's a combination of two things. First of all, contractually, with the customer, we go to an approval process and approval stage to make sure that they are all on the same page and we're going to move them forward and so on. But just for example, to give a sense from Aspen, moving from Aspen compared to moving from Cortina to Dobson, we have improved like 50% in improvement from a timeline perspective, right? So there is an aspect of approval that Cristina kind of manage all those aspects with the negotiation and alignment with the customer. But then there is an efficiency from our side. So I think we went give or take 2x and it's just with the game. There is a lot of things that we're doing in our infrastructure to enable us to do that move even more efficiently. If I could sneak in just one more, Mike, Jeff, either of you guys, it might make sense. But as you think about the medium to long term, is anything from a trend perspective or just how you think about that customer conversion pipeline that would suggest maybe the CAGR might be sell from the mid teens that we're seeing from last year to fiscal 'twenty five? Well, we feel good about the guidance. We feel good about the update to the midterm plan that we provided here. Everything that we're seeing, the quality of the discussions, the way that the system is being adopted by the customers that have already purchased and we're already partnering with gives us confidence. So, I think the simple answer is no. We feel good about the guidance and the guide. And if I could add one more thing, Ken, just in terms of helping you understand where we are with respect to the question you asked Diego. The most important thing we've established is the learning cycle. That learning cycle at Guidewire and with our customers and with our cloud customers is instantiated now. And that automatically just makes us more efficient, a little bit better, a little bit more efficient, a little bit better. It helps us sell. And so that factors into why I think we're confident about the future. And the one thing I want to add, Ken, is FY 'twenty five target is not $1,000,000,000 It's probably cost $1,000,000,000 threshold, right? And so as you think about acres, it's important to keep that in mind. We've obviously given guidance a couple of point two. Last year, we noted that we felt very good about getting back to the mid to upper teens that it would take a couple of years to take care. And that's still very much where we are at. And so that's how we're thinking about the CAGR for both the midterm and then even really the longer term targets. Our next question is going to come from Josh Nader. Hi, Craig. Thanks, guys. So first one is for you, Mike. There weren't the Tier one activity in terms of new deal signings in the cloud in fiscal 'twenty one wasn't what we've seen in the past. I'm just curious, what happens when a Tier one insurer is a Guidewire on premise customer looking to migrate to the cloud. Do they say, you know what, we're gonna do this and we're gonna go our fee and we're gonna do go out and source as many vendors as we possibly can. What does that process actually look like when a tier one in turn decides to move to cloud? I would say, I'll give you my perspective of how it goes in a perfect kind of sense is we're constantly communicating with these customers about where we are on the product roadmap, where we are on the capabilities, where we are with our existing customers. Now, the degree to which those customers can engage with us on live, hands on, cruise of concepts about how the system works, how the platform works, that is what I mean when I say that the confidence level here increases because then we start to get real tangible feedback from them. But the system works that way. Is this on the roadmap? Is that on the roadmap? We work with them to define our roadmap for our follow on releases. And as we build the confidence in that integration cycle, you can start to have a lot more confidence about saying, hey, this list of things that you've described as must have requirements, we feel very good about that being in release X, release Y. That ends up being aligned with their program priorities. And so, the other thing you should be very aware of is that these implementations that our customers are in a state of change at all times, right? They've got initiatives, hey, we're rolling out this new line of business, we're rolling out these other states, we're adding this functionality to the on prem managed instance of Guidewire. We want to get those things done before we make the decision to move to cloud. That is not an external evaluation if that's what you were hinting at. That is a discussion with Guidewire about when it makes sense to make that move. So that's, I would say, actually the pattern that is going on with all of our Tier one customers. Great. That's awesome. And then a quick follow-up for Jeff or I guess for you, Mike, doesn't matter. The medium term and long term financial targets, Last year, I didn't necessarily get the sense that there were actual timelines associated with the mid and long term and start to hear that FY 'twenty five is kind of a concrete medium term target. I'm just curious relative to your expectations or your previous expectations, how much was this brought forward? And then the implication here is that ARR growth should accelerate. And I'm just curious what years you expect to see the biggest acceleration? Should it be a hockey stick or what does that kind of look like to bring on there? Let me take it quickly and then I'll let Jeff jump in because he really was the detail here. There absolutely is a timeline associated with this. I mean, as you stretch out into the future, you introduce risk. And so, there's we have to be careful about sort of ascribing a certain timeline to this. But, what I try to continue to repeat is that this is going according to plan, it's even slightly ahead of plan. Both on the how much of this can we sell and is it really working and are we really making customers happy with it and are we then delivering the efficiencies we need in order to deliver the margin, right? That is going according to plan. So, last year to this year, I'd say we're right on track to ahead of schedule. And Jeff can give you a perspective about the other characteristics of your question. My general take is we had a good five year plan. We executed on it very well last year. And so that's what gives us the confidence to give you a little bit more specificity about when we get to that medium term target. Yes. I think what this is largely played out, again, as I said before, in line with how we'd expect it. When we put that framework in place last year, our intention there was to help folks understand what this business would look like at certain milestones, understanding that this is a business that moves at its own pace, this is an industry that moves at its own pace and it can be sometimes difficult to nail down specific timelines. Our intent when we put that framework into this a year ago was hopefully a year later, we would things would play out and we would have a bit more data that would give us that confidence and put a marker out there, which we did. And if you go back and compare to the model we had a year ago, it pulls it forward a little bit, right? I mean, a year ago, we were at the cost of when we hit $1,050,000,000 or would it fall in $26,000,000,000 And it was I think there was you've had the probability weighted. We felt like it was certainly a possibility to get it to net $4,250,000,000 but more necessarily, really, you put that number out there. And this year, that model was much, much clearer for us. So it did pull forward with revenue. And then that did have a little bit of an impact on margins because it's such a critical point in the scaling of the company that as we start to add those cloud customers, leverage, you mentioned incubating our platform and realize the margin improvements as we become at scale is such a critical part of that overall, how the model would play out. And then the kind of growth acceleration implied there, what should we be expecting in the next couple of years? Yes. I mean, it's very consistent with how we talked about before. Last year, we said we expect to get back into the mid to upper teens. It's going to be a couple of years to get there and that continues to be playing out at this point of time. Thanks, guys. Thank you. Thanks, Jackson. Our next question comes from Dylan Becker at William Blair. Hey, guys. I appreciate all the color today. Kind of like initially, I think we heard talking about the value of the content and kind of the underlying infrastructure to GWCT. So maybe wanted to dig in around the importance of maybe some partnerships, some integrations to help kind of fuel that content engine as you're building out that infrastructure layer. How does this help scale kind of certain segments and allows you to be more competitive in certain areas as well in driving kind of that value and ease of use for your customer base? Yes. It's a great question. And I think, one of the things we learned over the course of the past couple of years is how important integration flexibility and repeatability really is to the overall expense of running Guidewire, and it's actually caused us to pivot some of the product investment. You'll see us GA and integration framework and then the banking model that's in the core of InsuranceSuite here in an upcoming release. And we're very excited about that just because it's going to unlock a much easier and cheaper way to integrate Guidewire Cloud for InsurTechs and for applications that are external to Guidewire. You see that in the growth rate on the applications that are described on the marketplace. I think it was Raj described it as accelerators that they're looking forward to take advantage of. We see it with two really popular or two popular companies and one very popular use case is fraud, and now in detection fraud and there's two great partners in our ecosystem, one's Shift and one's Chris. And I think Chris was actually mentioned in one of the answers on the Q and A today. The use cases here abound and I think as we're able to deliver an integration framework that's cheaper and easier to use, you're going to just see more and more adoption of this going forward. So, I don't know, Christina, you own the Terri, the business only to give you a chance to speak on it, if you have any other thoughts. Sure. Thanks. So building on what Mike said, we've continued to do more and more, not only to make a variety of different solutions available through marketplace, but we've also made an investment in the past year and some fixed fee integrations and things that are very easily deployable and repeatable for customers. And intriguingly those aren't the ones that you think of with sort of the exciting and unique use cases. They're the ones that are probably some of the most just kind of straightforward in terms of being able to do vehicle lookups, certain supplier fulfillment and whatnot in the claims space. And so we think that that's a really good balance, right? In marketplace, we provide not only the opportunity to do more of the cutting edge and more innovative things, but also to be able to hopefully take some of the burden off of just some of the more basic and core integrations that our customers need to be able to do. We want to be certain to be able to satisfy both sides of this going forward. Awesome. That's super helpful. Maybe one more for Jeff as well. As we think about the dynamics with kind of ARR, fully ramp ARR, that acceleration, migration versus new, I think there are a lot of components to kind of digest here. Is there an easy way to or how should we be thinking about the contribution from kind of prior year ramps layering into maybe the current kind of ARR guide, how that layers in over the coming years. And then as you sell more of these kind of cloud or these migration opportunities, is there a point where the ramp structure becomes less steep, right, as you guys have kind of standardized across those products, maybe where that comes in and can become successful in the past year over the past year over the past year? Yes. So, in terms of helping people understand how wholly ramped ARR will then translate into the ARR number, we did into the ARR number, we did give a little bit of a chart to help folks understand what a typical ramp looks like. Some of the disclosures that we provided in the past is that in fiscal 'twenty one, we expected around 50% of our gross new ARR to come from ramp activity and the other 50% from new sales activity. We're always refreshing the stuff that goes into ARR by selling new deals with ramps that come up. And we've said that as we look ahead, the impact of the ramps, we would expect to see that tick up a little bit, so maybe a little bit more than 50% of those ARR. At some point in time that will normalize. On your second question, the ramps decreasing, that is not something we've modeled or considered at this point. It's certainly possible. As we move through the migrations, we have different ramp assumptions for different price deals and migration arrangements because the way we think about Ramp is it's incremental ARR that's being delivered and the existing ARR that they already have is more captured in renewal or authority in the number. And so the additional ARR that gets added to Guidewire, it appears to have the way the map works, which is a pretty steep ramp. So as we work through migrations and become and see more of our deal activity modernization that may minimize some of the impact over time. But in general, I think the cleanest way to think about it is that we have not made any assumptions that our overall ramp schedules would change. And we're close to 50%, fifty % today in terms of coming from ramp activity, we're coming from new sales activity. And I would expect the ramp contribution to grow a little bit, but I don't expect it to get to 60% or 70%. Our next question comes from Michael Turrin at Wells Fargo. I guess just one for Jeff. And it sounds like you're kind of hitting on it throughout some of the questions too. But if I just take the $1,000,000,000 simply on ARR and look at the payers, what's implied in those two numbers, you look pretty safe with one another. I know if we look back historically a couple of years or even if we look at the 2022 guys, see our growth number is meaningfully ahead. And so should we think about the shape of this revenue and effectively outpace AR in the out years as we get closer to the mid term model? Or maybe you can just help on that to the dynamics if AR is growing faster than the year. So first of all, as I said previously, the putting dollars is not the target in fiscal 'twenty five that is when we cross that threshold. So you should consider that when you think about coding and models in terms. But the other topic that you touched on that I think is important, and I touched on this in my slides of how software revenue growth compares to ARR growth. And we saw a couple of years as we transition into ASC six zero six where there was an impact of multiyear activity that was beneficial to software revenue and software revenue growth rates. And that has created what we're seeing now more of a headwind, so software revenue is below overall ARR growth. I do expect as we've modeled this out for software revenue to kind of reaccelerate even potentially go above ARR. And then over the longer term as the model becomes more stable, those two will normalize in a much more elegant way. I do expect to see that phenomenon occur as we start modeling the outages. Okay. That's helpful. Thank you. I'll take a minute to read a couple of current live here. Rachel came in at PTIG working with Matt Vanbouet. How much impact is the Guideline market is having on the model today? Do you see this playing an equal revenue margin contribute over time? The strategy with the marketplace is not to generate revenue directly. It's much, much more about providing value to our customers through the overall platform. I look at it as a mechanism to enhance the sort of model that a customer builds to justify the investment in Guidewire as a platform and Guidewire as a cloud service. And so monetizing it directly is not in any way factored into the plan in any meaningful way. I think we've gotten these questions before and certainly there's other technology vendors who do monetize their marketplace, I think that that potential exists in our future. That possibility, I guess, exists for us. At this time, we're just completely focused on filling that marketplace up with as many great applications, great integrations, innovative sort of solutions as we possibly can, just because I think it significantly enhances the value of the underlying platform and helps sell more. And then Parker Lane asked that if the 78% of GDP we don't touch today, if half of that is on mainframes and COVID and working on other than enough to bring one over to the cloud or the BioCloud? What will be the catalyst? I think there's a couple of catalysts that aren't really acute, but really are chronic, but they're inevitable. I think that the first is, you can call it digital transformation, but it is your ability to instantiate a digital interface that enables you to connect to customers and agents more effectively. And I wanted to touch on something that Raj said in the Q and A. I've made a note of it that I thought was quite interesting is, I think sometimes people think about the digital implementation of web interface to your insurance company as a project, and you build it and then you roll it out and then you're successful. But then what Raj said, which I thought was really interesting was, well, the very next step is to measure how it's doing, is to measure what people are cooking on and what folks are people really creating and where are they getting through the process and how much are you really converting from that interface. And executing on all the changes necessary to continue to enhance that experience requires agility in the core system. It requires an innovative organization that is running that core system to be adapting to what you're seeing through that digital interface. And so I think those kinds of things really are just much, much more possible on a cloud platform like Guidewire. So that's number one. Number two is making better decisions with analytics, using analytics and using data and injecting those those more informed recommendations back to the end users that are using your system. Those things are going to drive insurance companies to realize that modernizing is necessary. And I do think we've talked about this before. I think when you have an industry that goes through a pretty significant change from this pattern of we've got a proven deployable self managed or on prem implementation to wait a minute, the whole industry is shifting to cloud service. That does cause one to say, well, let's wait and see how that plays out. I think as we see the cloud solutions from Guidewire and others start to be more proven that you will see those legacy transformations, those modernizations of the core systems coming back to market. That's my take and those are the drivers. I would add a kind of a note to what Mike just said is, I think technology advancement aside, I think we'll all be facing in the next couple of years the practical reality of the last one called programmer in China. And there will be a day that there will be no more people who know how to maintain these membrane systems. So, there is a more practical matter that needs to be at home to exit from those arcade systems. Okay, great. And then we'll ask one more question from the chat. Brad Silves with Bank of America asked that with ramp ARR mix increasing in the next We've actually got hardwired. Do. All right, are you there? Sorry, didn't interrupt you, Al. I'm sure he'd like to speak for himself. He's stuck in the Internet somewhere. Sorry about that. I guess, the it's not there. Please proceed. Sorry. I can't crack away. As I was saying, with our AMP ARR mix increasing in the coming one to two years, how should we think about ARR growth acceleration? Can this return to the 20% to 25% growth level that term license growth was prior to the CloudSign vision? Yes. I think we touched on this a bunch in the past there. Certainly, we've modeled the business in a variety of different ways. There are certainly scenarios in how we think through this opportunity and how this opportunity might play out where we could return to those levels. I think to get to that with organic product sets and thinking through the opportunity the way we've thought through it historically, you would have to see a much more condensed migration period. So a wave of large insurers realizing that this is the right time to go cloud. I don't want to wait. I don't want to get this 10 down the road any further. And so if you start to see those types of activities contrasting, it's certainly just back into the 20% range. That is not how we modeled it, but those opportunities are out there for sure. Okay, great. And I think Jack Nader wants to ask another question, Lars. Can you hand him back upward? Yes. Moving him now. Hey, guys. Hello, again. Just a quick question on the TAM slide and just the opportunity to make your data analytics. You think about the core, having I think it was $13,000,000,000 or so, $3,000,000,000 from existing, another $10,000,000,000 in customers and then an $8,000,000,000 avenue in data analytics. So if I just think about $13 and $8 you know, we call it $0.75 or so for a dollar spent on the core and then $0.75 coming from my data and analytics. Is that currently what you're seeing from customers that have adopted whether it's in the cloud or not? InsuranceSuite and also your full product type in data and analytics, is that accurate at 1.75 That's not the way that the model was built. I understand your question and I suppose in a perfect scenario, we could establish a pattern like that that would enable us to build the model bottoms up the way you described. The way that that eight is established is really looking at the product set that we have and the potential for us to sell it across the customer base, if not based on an example of a customer that's already running that way. It's also I think we need to be a little bit more careful about estimating that. But I think that's the one part of the plan where I think, honestly, depending on how much efficiency you can deliver to an insurance company through analytics and automation, that number could be even bigger, right, because then you're really enabling them to have meaningful impacts on the cost of operating their company. And so, the value of those kinds of solutions is pretty significant. So, there's a lot of potential I think that the intention there is to say that there's a lot of potential in the product suite that we have sold into our base, but it's not really a bottoms up replicate this customer times four fifty. Okay. That was the only follow-up I had. Thank you. Thanks, Jackson. I know Matt Van Boer had a question. I'll read it. He said you talked about two to three times less than pricing for cloud. And what would cost us maybe closer to three times versus two times? And how is that managing? So I think that the variability in that depends a bit about what they're how they're using, what they're using from Guidewire right now, when they bought, how many years have they been running Guidewire, sort of how long does the relationship last, what's the size of the company. It was interesting that you were listening to you were listening to Greg talk about AmSam and the journey that they were on and how not just the core system implementation that Guidewire was going on, but there was also some significant inorganic growth that was going on at AmSam. And so, factors like that all play into this and we negotiate the best situation that we can. I think there's also different circumstances of different companies about the cost that they're currently that they are currently incurring with running Guidewire and how much value there is in transferring that over to our cloud platform. And so, all of those things factor in to the conversation about the ultimate price and that's what drives that ratio. Great. And then I think Ken Wong wants to ask the question again a lot. No? Anybody else from the panel, Lori? It just takes a second for me to sign in the first and foremost. Ken, are you awake? I wasn't actually intending to ask a question, but you guys are going back on. So I have several ways and opportunity in front of the dozen Guidewire executives. This one again for you, Jeff. You guys kicked down the gross margin number. I just wanted to make sure we understood fully what caused that. I would think that if you got to that $1,000,000,000 plus, do you guys could still see comparable gross margins? Is it just that you guys are earlier in that whole CWCT migration process? Or what causes that? Yes. It is as we've gotten there a little bit earlier, it's also how the revenue gets recognized, right? So the margin targets are very revenue driven. And so that plays into it. And just the extra year to leverage the investments that we've been made. And so when we looked at the model last year, and I thought someone else had a question in the comments around making sure this is clear that as we looked at the model last year, we did not our internal model was close to not quite $2,000,000,000 in fiscal 'twenty five. And so when we look to the fiscal 'twenty six number, we benefited from a year of more margin expansion. And as we pulled that into fiscal 'twenty five, that put a little bit of compression on the overall margin target. It's really the I mean, the key takeaway, and I don't want that small move to cause complexity in the mess. But the key takeaway is this is playing out very consistent with how we thought it would be. We are seeing $1,000,000,000 a little bit earlier than what we were expecting last year. As a result, the kind of as we are setting that as our proxy for when we get to the certain along the way, We thought it was prudent to give you our best view, which is a small downward on the gross margin side and then continue to that we feel very confident in the long term targets that we set. Okay, perfect. Thanks for speaking back on. Great. I think that's a wrap. I think we've answered all the questions. Is that right, Rory? How about one more from Chris Kelly? Do you see it, Alex? I don't see it. Go ahead. I'll answer it because it's a good question and I'll answer it. Chris asked, what trends are you seeing with cloud customers moving from single products to the suite and does cloud migration catalyze suite selling? And I think the answer is absolutely yes. And it was one of the things that we highlighted in the Q4 call about one of the patterns that we're seeing and very happy about, which is that just the process of getting engaged with a insurance company to really talk about their needs, their core system moving into the cloud, it gives us an opportunity to take a shot at asking about what's the rest of the landscape looks like. And to the extent that we can prove that this is a viable platform and that there is a significant benefit in running a consistent platform across claims, policy and billing gives us an opportunity to sort of take that whole suite. And AAA Southern California is a great example of where that dynamic took out. It's a great partnership for a long time with Guidewire, and we were able to use the sort of cycle that we established in order to expand the footprint there. And so, yes, that's what we're seeing. And just like any, I think, enterprise software company in the world, opportunities to engage and opportunities to really assess where we can provide value and what the overall strategy is for our company that plays to our benefit and helps us make a convincing case that we can do more for our customers. And so, yes, I appreciate the question because it is a pattern that we're seeing and we're pretty excited about. All right. Well, that's Okay. There you go, Alex. That's great. Well, actually, right on the money, that's a trick with the team. So would it be any closing remarks from you, Mike or Jeff? I'll just say, I appreciate everybody sticking around. It's always fun when you do these Zoom calls to see how many people are on the call. And I do really appreciate everybody spending the time with us and hearing our story. We're incredibly excited about the transformation that's going on here at Guidewire and the progress that we've made. And we like just determined and steady progress is the way that I think about it. And it's going really, really well. So anything to add, Jeff? Well, yes, we appreciate everybody joining us. So thank you so much. Next year, we'll be in person. How about that? Okay. We'll end on that. All right. Thank you all.

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